After the first wave of COVID-19 hit Australia, the country outperformed most of the worst-case scenarios authorities predicted.
This perhaps resulted in a false confidence and pressure from numerous sectors across various markets to wind back restrictions. What few predicted, though, was what has unfolded in Melbourne with a surge of COVID-19 cases.
This has led to New South Wales announcing new restrictions for pubs and clubs and Queensland has again closed its borders to New South Wales. The increased restrictions not only impact business due to reduced revenue, but it also erodes the confidence of customers to attend venues. Coupled with job losses, is the discretionary spend for customers going to reduce?
It seems inevitable that authorities will be more cautious as to when restrictions will be removed. While some economists predict the economy will bounce back quickly, as is reported to have occurred after other global events, who knows when this will be and how much the economy will bounce back with so many job losses.
What does all of this mean for owners? BRI Ferrier, business restructuring specialists, recommend that businesses need to adjust and adapt as to what is in front of them right now. They need to learn to survive in the current market.
How does a business survive in these times?
- It needs to engage in regular, strong and honest communication with key stakeholders including financiers, creditors, landlord, employees and customers. If everyone knows where the business is heading and what the goals are, the more willing stakeholders are to participate in that process and those goals may become shared.
- The business needs to understand the cost of doing business. You need to develop a robust cash flow and test that cash flow against actual results achieved. In this market, it may involve streamlining certain aspects or even restructuring.
- If it becomes evident the business is struggling or cannot operate in the current market, it needs to seek assistance early. With early assistance, there are many more options to enable a business to survive. This may be from an informal arrangement with stakeholders or more formal arrangements. Either way, early assistance provide the best chance of survival.
BRI Ferrier are business recovery specialists. We provide practical advice, innovative solutions for clients in times of distress, such as those created by this COVID-19 pandemic.
Visit briferrier.com.au to see how your local BRI expert can assist your business navigate these challenging times.
