The COVID-19 pandemic has wreaked havoc around the globe, leaving national economies struggling in its wake. It has taken months of business closures, setbacks, layoffs and financial hurdles to get to where we are today.
Over an extended period of time, we will see the full effect and aftermath of this global pandemic. At present, the upheaval in the economy is still in its infancy and Australian businesses have only just begun to navigate the pandemic.
As we’ve only just begun to settle into new business structures and optimise working from home, we’re now slowly attempting to resume business as usual and steer through an uncertain post-COVID world.
For many companies, planning new business objectives seems somewhat redundant when we cannot predict how the global economy and Australian markets will look in three months, let alone a number of years. However, it is the businesses that are employing new strategies regardless that will come out on top and prosper post-COVID.
COVID-19 has been an imperative time for businesses to form new proposals and to take stock around where they’re going and what they want to be as life slowly resumes. Businesses need to use this time to assess whether they have the right capital allocation to survive through this economic cycle and thrive during the next.
During the pandemic, we’ve seen a significant downturn in business production in efforts to cut costs and secure chances of survival. In attempts to reduce costs, many companies have minimised services and maintenance. Yet without sustaining these functions, businesses have a significantly decreased chance of performing to standards post-pandemic.
Unfortunately, many businesses do not have the luxury to do a great deal during the current climate. Nonetheless, the divide between businesses that thrive and those that merely persevere will come from companies that use this time to allocate resources and put strategies in place.
First and foremost organisations need to value and assess what their assets are worth. Turning to asset advisories and financial consultants is a safe way to optimise spending, even when income is limited. Additionally, the ability to scale your business or downsize where necessary will ultimately reduce drawbacks in the long run.
Relying on banks during times of crisis such as the global pandemic can often do more harm than good for a business. Banks tend to look at a business from a credit perspective, rather than through the lens of an asset or piece of inventory. Turning to financial advisors allows for a better overall business evaluation which can prevent loss and reduce the extent of a company’s downsizing.
During this time, companies need to assess what their customers want from them and evaluate the necessary capital needed to provide for customer interests during and post-COVID. Organisations that are required to resize can utilise used equipment to cut costs and raise capital where necessary to ensure that business remodels and resizing are profitable.
Asset-rich businesses and those that are sitting on aged inventory and surplus assets should use this time to draw on any equity that they have in order to create cash.
The best thing businesses can do is use this time to strategise and implement downsizes in order to thrive in years to come. To prosper in the post-COVID economy, businesses need to envision where they will be within the next few years, and enact changes accordingly, even if for now they’re only just surviving.
Matt Aubrey, Managing Director, Gordon Brothers Australia