Businesses have suffered massive disruptions during the COVID-19 pandemic. But smart businesses can turn that into a positive — and prepare for future disruptions — by taking a number of steps, says Tom Wolf, CPA, director, Brady Ware & Co.
“No one was prepared for what happened, economically or socially,” says Wolf. “A lot of businesses are still doing well, but a lot aren’t. And even if you’re doing well now, that could change.”
Smart Business spoke with Wolf about how to emerge stronger from this downturn and how to prepare for the next one
How can companies begin to plan for a recovery from the impact of COVID-19?
First, assess where you are. Look at the last six months and determine what went well and what didn’t. For the things that didn’t, look at whether you can make adjustments, and have a plan B and C.
For the things that went well, how can you capitalize? Consider how you can take advantage of those things, but don’t get complacent. Things can change on a dime, so don’t think that because things are going well you can rest easy.
Also look at suppliers and customers. Create a backup plan so you can accomplish what you need to. And think about whether things will return to normal, or whether this is the new normal, and adjust accordingly.
How should companies be reimagining a new business environment and culture?
Review your risk model and technology platforms to ensure you can pivot as needed. Consider the way employees work and how expectations have changed. Be flexible with your workforce and how work gets done.
The pandemic has had a significant impact on commercial real estate as companies realize they don’t need all the space they have. Many are finding they just need a central location, and not everyone needs to be in the office.
In addition, businesses that laid off employees may find they are getting the same amount of productivity with fewer people. If they continue to do well, that will also reduce the need for office space and help improve efficiencies and control costs.
What do business leaders need to understand about their financials?
When a major disruption occurs, the strength of your balance sheet determines how well you can withstand it and for how long. It should let you take advantage of opportunities and be on the offensive. With companies struggling, there may be ways to expand. Income, revenue and expenses are important, but if you lose sight of your balance sheet, you may miss an opportunity.
How can your financial partners help?
Access to financing could become more challenging, and your banker, accountant and attorney can help you model out loan covenants and modifications as needed.
They can also look at cash flow and future profitability and help you be conservatively realistic about what you can do. If you are in a position to be cautiously aggressive, your strategic partners can help guide you, because if an opportunity presents itself, you don’t want to miss it. Shore up your financial situation, work with your financial partners to project out into the future and address potential speed bumps as quickly as possible.
How can companies reinvent their marketing and sales plans?
The way we connect with people has changed. We have to find new ways to connect and adjust how we think about making connections. If you’re not in a client’s business, how do you market to them and make yourself valuable? You need to make every interaction count.
Continue to adapt every day as the world changes and the way we’ve done business no longer exists. Focus on opportunities for margin and align marketing and sales in terms of goals, revenue and process.
People became complacent and didn’t realize the magnitude of what could happen. How are you going to be prepared for next big change, whatever it is?
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