Moving Forward from Covid

The Covid-19's impact in 2020 has been obvious and continues to be unpredictable. In this post, we highlighted 3 pointers to move forward and further protect your business's financials:

Continuity Plans

We have all been caught off-guard by the impact of Covid on our businesses and the circumstance has highlighted the importance of business continuity planning. We may often assume we can react accordingly to various adversities but it is time like this when we need to react fast that we would appreciate if we have planned for various scenarios. SMEs owners are often so pre-occupied with daily tasks of business that planning for various scenarios and reactions are often neglected. Covid may be one of the situations but a lesson to be highlighted is that there could be even more other scenarios (pessimism, I know) like PR disaster, warehouse fire and so on. It will surely be good to take some time to visit the dark side to prepare action plans and continue to test them out.

Cash is King

As cliche as this is but it is in situation like this where even great companies can go bust plainly because of insufficient cash. We can have a solid business, great deals for cost of sale or amazing accounts prepared. However, all these are futile if customers do not pay up, we pay suppliers according to our mood and no one to use the accounts to really strategize the way the cash are managed and stick to the idea of cash being king. This cash management surely requires time to work out especially when it should begin from the very beginning of when customers are assessed and does not just work overnight. Therefore, the importance of good cash management to tide us through difficult time has been emphasized more than enough in our face during this crisis and companies should definitely further highlight importance of this going forward.

Enforcing Resilience

Strengthening the company's resilience is arguably easier for SMEs, given owners usually can have direct quick change in process but often neglect this process. A conscientious effort is definitely required to ensure this exercise is carried out on areas like waste eliminations, building flexibility in both workforce and keeping fixed costs to a minimum. These strategic reinventions of the manner our businesses are carried out during this period is certainly necessary to bolster a company's resilience.

Surely this drastic condition has caused a lot of uncertainties about the future. However, it has also reinforced a mindset of a new normal of being a little bit uncomfortable, yet pushes a lot of us to ensure we are well-prepared and rethink some of our goals and processes for our stakeholders.

Nevertheless, the reality is that other than the technical knowledge necessary, not all owners have the time resources to transform their companies for this new normal. Hiring a CFO could be an option but usually beyond a SME / start-up's budget and further, you may not really expect one to be 'fully utilised' 8 hour a day. Yet, you should never be alone and a part-time CFO can be a valuable partner. Have a chat with us on how we can tailor a suitable solution for your business, at fraction of cost.