Many businesses will feel exposed during this Lockdown. Revenue may have dried up, there is much uncertainty as to how long this will last, and whilst appreciated the Government schemes and funding may be nowhere near your aspirations for a growing business
It is vital that you use this down-time effectively and seriously plan for growth, expansion and resurrection once this unprecedented time is over, ready to hit the ground running in any given scenario.
Our opinion is that scenario planning is key here. Analyse all possible outcomes over a broad range of time. Evaluate, develop and refine each, further developing those that look more likely as time goes on.
It is also looking more likely that as the overall economic situation worsens and as uncertainty grows daily that a solution for many businesses may be an equity raise.
So, what should you be thinking about now?
It is unlikely that any businesses will have planned a contingency for a situation as critical as this. If Governments, banks and “Blue Chip” companies haven’t included catastrophic global events in their contingency planning, it’s more than a little unlikely that you will have considered such in your risk matrix and continuity planning.
Unfortunately, as we are already seeing, there will be many businesses who do not survive this period. However, there is consensus that those who do survive, and are positioned correctly in the post lockdown period have a once in a lifetime opportunity to thrive beyond maybe even their own pre-Coronavirus ambitions.
The key to success here is to be ahead of the competition and be agile with your solutions, so that you can organise and implement quickly.
The first stage is to take this time in order to honestly and objectively appraise each area of your business. Is each department running efficiently and maximising potential? Where can cost savings be made? Where can revenue be maximised? Which revenue streams are likely to recover strongest and fastest, which should be the focus? Is my organisation currently setup to succeed in this new world? The time is now to evaluate and if necessary to restructure and strategize.
Once this is established, it could then be the ideal time to look at raising capital. Traditional banks may be nervous and tightening lending in the short term, with a focus on government backed schemes. The key difference between this and previous financial crises however is that the private lenders, family offices, private equity investors and such like have funds to invest, and most importantly need to invest these funds in order to generate revenue. This means that for the right companies, who are correctly setup and can coherently show their plan to success, the funds to achieve this growth are waiting for them.
This is the time to prepare, strategize, and get ready to leap out of lockdown and into a brave new world.
Pat McCreesh, Partner, Vantage Corporate