Covid has shaken up ‘standard’ business processes forever.
How can you turn the crisis to a positive?
Restructuring specialist Joph Young from Leonard Curtis explains
“I have a passion for helping people and their businesses and, as an insolvency practitioner with 20 years’ experience, I am always focussed on the insolvency avoidance options, where possible.
“Where these can be successfully implemented, jobs are saved, creditors do not lose out and shareholder value is preserved.
“It is a myth that calling in an insolvency practitioner is the death knell for the business. It often isn’t. Instead it’s a chance to have a really good look and offer a pragmatic and objective assessment of the issues.
“We know that the Government is committed to providing businesses with much-needed additional breathing space as we continue to navigate our way through Covid. These include extending furlough, giving access to further grants and ongoing measures, all designed to relieve pressure.
“And we are seeing many good businesses across the Midlands trying to manage unprecedented issues triggered by the pandemic. For others, the problems may have been more systemic.
“Under normal pre-Covid circumstances, I would be looking to rapidly assess the financial position of the business, advise on the potential options available and liaise with key stakeholders.
“Whilst the advice part remains critical, the current support measures and absence of creditor pressure provide businesses with a truly unique opportunity to plan their recovery for the short to medium-term.
“There is no magic formula, but in any financial crisis, cash has always been king and a key area for owners to focus on is robust cashflow forecasting. Care should be taken not to over-engineer this, with the key point being to make it fit for purpose and relevant to the size of the business.
“Perhaps a positive consequence from Covid is the effect it has had on shaking up ‘standard’ processes. Everything is under scrutiny now and I have been assisting businesses in assessing their forecasting and challenging previously held assumptions.
“I encourage business owners to regularly review and challenge their forecasts. This should assist in identifying any funding requirements at an early stage and afford owners the time and opportunity to try and address these. Where I am introduced at an early stage, the range of potential rescue options is usually increased. However, the options typically reduce as cashflow pressures become more unmanageable.
“Crucially, if a business is experiencing financial distress, we do encourage business owners to act now, and not be afraid of the insolvency practitioner. Rescue is always the priority.
“I have seen a huge amount of resilience in people and businesses impacted by Covid and incredible strides being made in many sectors. The speed at which businesses have been able to pivot, adapt and transform operations to fit in with a new way of working has been truly impressive. Transformations that would have previously taken years to implement, if they had been considered at all.
“I have seen this agility first hand in my dealings with local business owners who have found ways to adapt and deliver their product or service. I have been supporting them with practical advice, Time to Pay arrangements with HMRC and alternative funding solutions as they look to get back to some sort of normality.
It is encouraging to see businesses making proactive decisions and building resilience into their forecasting to try and build back stronger than before. There may not always be a positive solution, but it remains critical to seek advice at the earliest opportunity.
To find out more about how we could help contact us on https://www.leonardcurtis.co.uk/locations/worcester/
Leonard Curtis Business Solutions Group deliver practical, straightforward advice to business owners and their advisers across restructuring, finance and law. Our expert team of specialists operate from 18 locations across the UK – solving problems and resolving issues.