Your Finances

There can be no doubt that the first thing you need to do is assess the financial condition of your business. Depending on whether you are still operating and the condition of the business prior to the disaster, you will be able to assess whether you should actually re-open the business, how quickly you should re-open it, and whether the business will need to be changed in order to survive.

Ask yourself:

• Have you spoken with your accountant? Your accountant is the most important resource you have right now to help you through the process of determining whether your business has a future.
• Has your accountant been proactive in providing you information and guidance through this difficult time?
• Do you know your break even point moving forward? This is critical to set a bare minimum target to keep your business alive.
• Do you have a Cash flow forecast that identifies any periods of concern in the next 30 days and of course beyond that?
• Do you have any cash reserves available at this time?
• Are you eligible for any Government assistance and have you applied for it?
• Have you reviewed any current debt financing arrangements?
• Do you have access to other sources of funding?
• Have you reviewed / reset a budget for the next 6 and 12 months?
• Can you afford to fund a recovery plan (assuming you have one)?
• Have you reviewed your profit & loss and balance sheet up to the time of the disaster so that it can be used in your decision-making process about re-opening?
• Have you run some “what if” scenarios with your numbers? Sensitivity analysis is essential to determine the impact of the worst, likely, and best case scenarios.
• Have you spoken with your bank about how they might be able to assist you in re-opening your business?
• Have you spoken with your legal team to ensure you are adequately covered for any matters that may threaten your business as it starts to recover?

Your Motivation

It is very normal to have thoughts floating around in your mind about what to do and where to start after a disaster. It’s important to have the right thoughts and the right questions to think about.

Ask yourself:

• How passionate are you about your business? Without the passion and drive, the re-opening process will be a struggle.
• Are you / were you happy running your business?
• Was it profitable?
• Are you prepared for what might be required to re-open and recover your business?
• How will your working arrangements change with your staff? For example, the “working from home” revolution has well and truly happened. People have been forced to work from home for a while and many like it. Does this represent an opportunity or a challenge for your business?
• What lessons have you learned from running your business before the disaster?
• Are you prepared to make necessary changes to your business?
• Have you reset your goals both personal and financial?
• Have you considered any other options?
• Have you considered exiting the business?

Your Recovery Plans

Many businesses did not and do not have a Business Continuity Plan or any adequate Disaster recovery plans. One thing this pandemic has certainly done is expose the vulnerability of the entire global economy and every business operating within it. You need to plan for the likelihood of something like this happening again. This is where the business continuity planning process becomes critical. You need a plan for every critical function within your business. Consider:

• Funding Requirements
• New operating requirements
• Your People and the impact on them
• Location
• Market changes
• Equipment
• Inventory
• Marketing
• Pricing

With so much to consider, it is not as simple as opening the doors and hoping for the best. I learned many years ago when it comes to business success “hope is not a strategy”!

The post Should You Re-open Your Business? Assess Your Options appeared first on Growth Generation Commercial Group Business Broking.

The utter devastation to the global economy, national economy, state economies, and local economies is unfathomable. Industries shut down overnight. People out of work overnight. Basic liberties taken for granted restricted overnight. The impact is profound and the ripple effects are going to be felt for a very long time.

It’s fair to say that much of what is happening is a first for most of us. Unfortunately, it is unlikely to be the last. In fact you can count on it happening again. We now have a new scenario that threatens our livelihoods and lives that we must add to our existing business continuity plans if we have them. If not, it’s a scenario we now need to treat with the utmost priority.

We need to take a good hard look at how to create a plan for any eventuality that may impact the critical functions of our businesses and indeed our lives. Business continuity planning is not just for large organisations. It is something every business owner needs to put at the forefront of their planning for now and the future, post Covid-19.

What is a Business Continuity Plan (BCP)?

A Business Continuity Plan (BCP) is exactly that! It’s a plan of action to keep the business going and to recover after an incident or disaster has impacted your business. It is a collection of Disaster Recovery Plans (DRPs) or response plans outlining the steps and information to be followed to get the business back on its feet as quickly as possible and to restore the critical activities to get the wheels turning again. It typically covers (but is not limited to) the following (in no particular order):

• An assessment on whether to reopen after a critical event
• The financials of the business and rebuilding them if necessary
• The critical functions and processes of the business
• The risks associated with those critical functions
• The mitigating / minimising actions to limit the impact of those risks
• The critical contact information for the business and team members
• Actions to take with customers
• Actions to take with suppliers
• Actions to take with your insurers
• Actions to restore telecommunications and IT
• Actions to take regarding stock and damaged items (if applicable)
• Infrastructure actions like electricity, gas, and water (where affected)
• Logistical considerations
• Security protocols
• Repairs and cleaning
• Procedures to resume office operations
• A list of Government and other contacts to provide additional assistance and advisory services
• Policies and procedures to effect in the event of a critical incident

You can see, it’s not a small plan and can take some time to put together, but if you need it in a hurry, the information within it can be business, and indeed, life saving!

What is a Disaster Recovery Plan (DRP)?

A well-known DRP is the IT plan. Your IT system is a critical function within your business and the risks to that system need to be addressed. A n IT DRP outlines all the critical steps to recover IT services and restore lost / damaged information and infrastructure so that the business IT functions get back online as quickly as possible. Your IT system is the heartbeat of your business and without it you will likely suffer catastrophic results if it’s offline for too long.

So, looking at your business now. I’m sure you can appreciate the benefit of having a BCP in place. I am offering free support to COVID-19 affected businesses to assess the damage done and determine the viability and possibility of getting back to business. There is a wealth of information available out there to help you in this space, some of which I have used over many years to protect my clients and their businesses. My approach is practical and I’ve done the hard yards to help you create a plan that protects your business and livelihood. I will be sharing more over the coming weeks.

If you need help or know someone who could use it, please contact me at www.igeneration.com.au and I will arrange an initial discussion to assess the best next steps. If you are interested in developing a BCP for your business don’t delay!  As a I said in my article almost a decade ago, “Nature can take a swipe at any time! And, it will again!”

Stay safe!

The post Business Continuity Planning and COVID-19 appeared first on Growth Generation Commercial Group Business Broking.