As your partner of choice we want to help you to prepare for and navigate through tough times, plan for an uncertain future and come out successfully at the other end.
What’s in store?
Covid pandemic, looting and unrest, service disruptions political upheavals, fiscal mismanagement – the aftershocks are looming. Recovery will be slow, hugely expensive with storms and uncertainty as global and local economies move to unchartered territory. Business owners are wondering - how and when to move from survival strategy? What is needed to ensure success? How have markets changed and what impacts they will feel? How to find the right balance between work and life? When to spend vs. when to save?
Ian Scott, Senior Partner at BDO, gives insights into planning a successful future for privately owned businesses through both good times and bad.
“Owner Managed Businesses constitute a huge percentage of the SA business economy and are represented across multiple sectors. We have a very large owner managed client base, it’s still a core part of our business and continues to be a major focus for us at BDO.”
“We have learned what private owners want and need to succeed. We have geared our services to be able to provide rapid, short-term actions and tactics in survival mode, while advising and delivering longer term strategies and plans that prepare them for future uncertainty.
Working closely with our clients, sharing and applying expertise we can help them survive and perform better than most to make it through extra-tough times.”
10 survival tips (part of the business growth programme) BDO recommends for business owners to help mitigate risk when there’s an uncertain future:
Tip 1 – analyse and prioritise risks that could affect them. Start with the most likely and document various mitigation options. This should be updated at least annually with key staff participation. Use scenario modelling to test plans and establish if they are robust enough or may need restructuring.
Tip 2 – develop contingency plans should they find themselves unable to trade. Prioritise immediate costs they would cut and how they would deal with commitments and contracts, and in what order e.g. A Business Continuity Plan (BCP) for continuing operations through an unplanned event, defines the essential functions of the business, identifies which systems and processes must be sustained, and details how to maintain them.
Tip 3 – make sure they fully understand their supply chain, how to maintain continuity by managing or keeping sufficient stock of vulnerable components.
Tip 4 – identify non-critical processes and functions that can be postponed.
Tip 5 – train staff to multi-task and be competent to step-in and perform functions over and above their basic job description.
Tip 6 – document asset values, quantify realistic amounts that can be realized from surplus or non-core assets, identify where and how they will be disposed of.
Tip 7 – list sources of finance, and develop strategies for cash conservation, savings through cash-flow management, debtor attention and creditor deferment, and other potential actions to implement whilst restructuring is underway.
Tip 8 – build cash reserves to cover a couple of months overheads will buy important time while new strategies are implemented.
Tip 9 – finalise digital transformation and the ability to work remotely. Ensure the business has sufficient IT capacity and online presence to enable a shift to different work and workforce models, off-site operations and business continuation with least disruption.
Tip 10 – ensure succession plans are in place for continuity and guidance from the owner to the trusted circle of staff and advisers. Communicate and educate management, staff and family.
“We’ve been helping clients to optimise business and financial performance through good and bad times since BDO’s earliest days in SA,” says Ian. “Now more than ever our clients need us to help them manage their routines and deal with risks and issues. It’s what we do for them so they can find and retain the work/life balance they look for as owners and managers of their own private businesses.”
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