In an enlightening session, Andy Carruthers, a seasoned business advisor at Findex, shares a comprehensive guide for small and medium-sized businesses grappling with the upheavals of recent global events. His expert advice, rooted in extensive experience with businesses across New Zealand and Australia, offers a roadmap for not just surviving but thriving in the uncertain times ahead.
At the heart of any business’s survival strategy lies the management of its cash flow. Carruthers stresses the importance of having a clear view of a business’s cash position in the short to medium term. This clarity is not just about weathering the storm but preparing to emerge on the other side with a viable business model.
The conversation around wage subsidies reveals a nuanced view. While these subsidies serve as a lifeline for many, they fall short for businesses with higher wage bills. Carruthers’s insights prompt businesses to look beyond immediate relief, planning for the eventual tapering off of these supports.
Expense management, particularly renegotiating fixed costs like commercial leases, is highlighted as a crucial survival tactic. The ability to reduce operational costs can provide much-needed breathing room for businesses under pressure.
The discussion moves towards the delicate balance of managing workforce costs while maintaining the integrity and future viability of the business. Carruthers advocates for making tough, yet thoughtful decisions regarding layoffs and wage adjustments, underscoring the ultimate goal of business continuity.
A proactive approach towards negotiating with creditors and leveraging relief measures from the Inland Revenue Department (IRD) is advised. These actions are essential steps in ensuring that businesses remain afloat and in good standing.
Carruthers recommends utilising digital tools like Xero and Spotlight Forecasting for creating conservative financial forecasts. These tools can help businesses plan for scenarios that include a drop in income and slow-paying customers.
An often-overlooked aspect of business planning is the personal financial health of the business owner. Carruthers emphasises the importance of this aspect in making informed decisions about the level of personal investment in the business.
Effective communication and negotiation with landlords, creditors, and the IRD can lead to significant relief for stressed businesses. Carruthers encourages open dialogues to renegotiate terms and secure arrangements that support business sustainability.
For those considering government-backed loans, Carruthers advises treating these options with the same caution and diligence as any other financial commitment, with a clear repayment plan.
Findex’s COVID response plan, backed by government funding, is a resource for businesses seeking to navigate the lockdown and post-lockdown landscape successfully. This plan is designed to provide actionable strategies for business recovery and growth.
Andy Carruthers’s session is a masterclass in navigating the treacherous waters businesses find themselves in today. His emphasis on proactive financial management, strategic foresight, and maintaining open lines of communication offers a pragmatic yet hopeful perspective for businesses aiming to thrive in the new normal.
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Brent is the Director of Norling Law. He has a wealth of experience in the District Court, High Court, Court of Appeal and Supreme Court. Brent is passionate about negotiating favourable outcomes for his clients and able to implement this in his daily negotiations.
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