Outside of the dreadful human cost, COVID-19 has brought immediate, dramatic and unprecedented challenges to the activity and outlook of the region’s businesses. Initial focus has rightly been crisis management, people and cost management, as well accessing central government support however there has been a discernible change in tone in recent weeks as to when and where the recovery will come.
Only this week Morgan Stanley reiterated their confidence in a V-Shaped Recovery as global economies ease their way out of lockdown, however, their update arrives at the point when we are hearing of stark contractions in UK GDP and a reinvigoration of The Bank of Englands’s Quantitative Easing program.
Macro information will for some time yet provide confusion and contradict, the interpretation of Big Data and understanding the impact at a micro level is as ever far from clear. However, what is apparent is that business has developed a new operating rhythm and there is cautious optimism from what we can feel and touch. The roads are busier, more shops are open(ing) and schools are engaging in a conversation of what the future might look like.
Whilst by default rather than by design there are a number of key truths that have appeared throughout this crisis:
Whilst sentiment is encouraging, there exists substantial unpredictability as to how we will navigate the exit of this crisis given the number of variables there are to play through. The simple truth is that whilst central Government support has largely sheltered the cash impact of the crisis these measures are a combination of temporary arrangements and deferral of a problem. Whilst far from an exhaustive list the below provides context as to the immediate and medium-term challenges ahead:
Whilst market outlook is uncertain it is apparent that owners will need to remain hands on with a clear prioritisation of cash management, with a level of control likely not evident prior to the crisis. Business models will need to evolve.
Stakeholder management will be key to success whether staff, customers or suppliers. Engagement with funders will be a fundamental part of this process and ensuring that the funder is fully aware of the challenges and outlook as well as alignment of strategy should be a core part of this process.
For better or worse, the one thing we can be certain of is that the reality will deviate from the expectation in both the short and medium term. The challenge as ever in these scenarios is to be suitably informed and aware of the situation as well as have a clear understanding of the options available. As part of our ongoing business support strategy at Pierce we are delighted to support clients through these uncharted times, through a combination of:
Whilst there are a myriad of statistics relating to the relative success or otherwise from the various funders out there. There is quite simply a linear function between the quality of solution provided and the quality of the interactions and supporting packs provided to the funder.
As part of any stakeholder process early engagement with funders, with a no surprises approach, and a clear articulation of the requirement and proposal as well as a controlled cash position will ensure the best chance of success in achieving the best solution for your business.