Ok, I’ve stopped panicking, what should I do next?
Ask yourself, do you really know your own business situation? Take a holistic honest look at your company. Bring key senior staff together and carry out a quick but effective business diagnostic review. You need to react quickly to events. In times of crisis businesses are forced to restructure or die. Devise a strategy, compiling a survival road map will help. Review the warning signs (i.e. cash flow difficulties; customers/sales; suppliers/purchases; technological/operations; organisational; and legal issues). Decide on action and if your business is solvent then aim for crisis stabilisation and put together a short term action plan followed by a recovery plan and share this with stakeholders. Also think about what government help is available, how you can work with your bank, and whether you can avoid redundancies by reducing working hours. This will help retain talent and boost morale by avoiding job losses. You should also ask yourself if you need external help. If your business is insolvent then seek professional insolvency advice. Either the business will go into liquidation and be wound-up or you can weather the storm by going into receivership and finding a new buyer for the company, which could lead to it becoming a sustainable business again.
Right, I’ve stopped panicking, I’ve devised a recession coping strategy, what else can I do?
Let’s consider the solutions and options. You can either (1) fix the business for success; (2) fix and then sell the business; (3) sell the business, or (4) close the down the business. It is crucial that you accept the reality of the situation whether good or bad. You need to act decisively, focus on what is important for survival by managing cash flow addressing your cost base, and lowering your breakeven point and improving gross margins. You must have reliable management and financial information and involve and motivate the whole workforce. Your survival strategy must have buy-in from all stakeholders and remember to capitalise on opportunities the recession may have created for your business. Where appropriate seek outside help. Early intervention is critical and company directors must be the ones to initiate the turnaround process, which involves: (1) crisis stabilisation; (2) leadership; (3) stakeholder management; (4) strategic focus; (5) process improvements; (6) organisational change; and (7) financial restructuring. This is just a brief overview but I hope it illustrates that no matter what your situation there are strategies, solutions and options available. Don’t panic be positive and take control!
