By now, nearly every business or organisation has taken action to navigate ‘the new normal’. That said, the operational impact is different for all of them. Many organisations are swinging between hope and fear. While the hospitality industry is still in survival mode, in the public sector, crisis management is slowly making way for business as usual in ‘the new normal’ and sectors that were less severely affected are venturing a tentative look to the future – with good hope for recovery. One thing is clear: these times call for a broad rethinking of your licence to operate and the future of your organisation.
New issues
The coronavirus pandemic is forcing businesses and organisations to be agile. For a change towards becoming agile to succeed, they need to know exactly what forces are at play at what particular time and what the obstacles and pitfalls are. BDO can help by offering a clear understanding of your potential challenges and business priorities. We have defined three phases that apply in these times of crisis: react, resilience and realise.
REACT: speed up, pause or stop?
In times of crisis, such as the outbreak of the COVID-19 pandemic, quick thinking is key. How do you safeguard the continuity of your organisation? How do you absorb the biggest blows, or worse, how do you prevent your business from failing? Alternatively, a crisis may offer opportunities that will help you attain your growth ambitions faster.
In the first stage of a crisis, you need to be able to stabilise and buy time, so that you create a calm environment in which to consider your options. Rather than sitting back and waiting, you should carefully analyse your cash flow and financial forecasts. And, where needed, it is obviously a good idea to apply for the government support packages that are available to you, such as relief programmes to defer tax remittances.
RESILIENCE: back to the drawing board
Resilience is all about the agility to change course when economic conditions dictate, so you can continue your business. As a result, you may have to go back to the drawing board to redefine your strategy and business model. This will include rethinking your long-term strategy, market differentiation, new business and staffing model, and focusing on improving your customer satisfaction. It is important in this context that you align your processes, organisational set-up and cost structure to the choices you have made in your business model, whether your ambition is to scale up or down.
While continuously facing liquidity challenges and compliance issues, you will of course want to keep your total tax liability to a minimum. A transaction such as a merger, acquisition or reorganisation calls for professional expertise, in tax and other fields. The multitude of strategic choices can get overwhelming if you cannot rely on the support of qualified professionals. BDO can help you with scenario planning and redefining your strategy as a (family)business owner.
REALISE: revamping your business model
A robust strategy that embraces innovations makes organisations more successful. The success of its implementation is contingent on clearly defined goals and actions, a project-based approach and the right management information, making allowance for an organisation’s capacity for change. Is your organisation resilient and agile enough to redefine your business strategy, so that you emerge from the coronavirus crisis stronger? If it is, you are ready to shape the future of your organisation. In the coming period, businesses and organisations will be focusing on improving their returns, developing and implementing innovations, financing growth and boosting their resilience. And perhaps also on tax and legal planning and restructuring. Please feel free to contact one of our specialists if you want to find out more about the strategic and tax solutions we offer to resolve all your organisational issues.
Stakeholder management
It is essential that you communicate regularly with all employees, key customers and other stakeholders all the time. The main objective of crisis management and stakeholder management is to limit loss of income. You need to remember that this is not about months of analysis; rather, it is about understanding and embracing your opportunities and threats quickly. This applies in particular to the provision of information to other relevant parties, such as banks and other lenders, suppliers, vendors, your shareholders and the tax authorities.
BDO can help you identify your organisation’s principal stakeholders, and communicating with them. Our specialists have built long-standing trusted relationships with some of your stakeholders. It is important that you communicate with your key stakeholders on a regularly basis and stay on top of your business performance.
Impact on your business
Please contact one of our specialists if you want to learn more about the impact of the coronavirus pandemic on your operations and gain a better grasp of your situation, so that you eventually emerge from the crisis stronger.