As our Government urges all to return to work and restart the economy, I keep hearing the opening riff of this Rolling Stones classic. That Richards’ riff, Watt’s beat and Wyman’s bass give the song a raw driving energy we could all do with now!
For most of us transitioning from WFH to BTO is going to be a psychological challenge. Whatever your home office arrangements, broadband speed and mastery of zoom/teams, I am sure deep down we all crave a return to normality.
In her excellent blog “What will September bring?”, business psychologist Caroline Gourlay explores five things we all need to consider as we prepare for “la rentrée”.
There is no doubt that business life for the foreseeable future has changed. Some sectors have continued working but for most of the wider economy, the beat has slowed.
The working sectors – essential retail, NHS, social care, essential manufacturing – have all found ways of working to observe social distancing guidelines to keep their employees and us safe.
But besides maintaining distancing guidance and employee workplace safety, SMEs face a multitude of challenges as they open up:
Debt
For many SMEs March 2021 represents M13 when they have to begin repaying emergency Covid related loans. But few will by then are likely to have the cashflows to support debt service let alone begin debt repayment.
The City UK Recapitalisation Group estimate that businesses will have c£100bn of CBILS, BBLS and deferred tax (VAT, PAYE, CT) liabilities by March 2021. Much of the emergency lending to SMEs (c50%) is unsustainable (not serviceable from cash flows or likely to be repaid).
Demand
Predicting customer demand is a basic task routinely carried out in many businesses. Whatever your demand forecast process, it is the foundation to good operational and cash flow planning.
Supply chain industries are driven by OEM schedules. But these in the current environment have been slashed. When will we fly or buy a new car again?
The only way forward is scenario planning. Management teams need to model best, worst and most likely demand scenarios looking forward one to two years.
STCF
In the present environment a rolling 14 week STCF is essential.
However, SME businesses need to extend this out in monthly buckets looking ahead for a rolling 12 months. There is a lot of debt to repay and it helps managements keep focus on the road ahead.
And there is always that audit “going concern” question and Bank facilities review to address.
Strategy
Now is the time to review your strategy. Whatever that winning play pre-covid, it is almost certain that it is less attractive in the new world.
Strategy is fundamentally about what the business is going to do in order to shape the future to its advantage. Well the future has changed. So, you had better go figure.
Stakeholders
The world has changed. We are all nervous about the future. Management teams need to make communication a core objective.
It not just your employees but customers, suppliers and your Bank will need regular reassurance and updates.
Support
Leadership and ownership are lonely places at any time in most businesses. Now, more so than ever.
It takes courage to ask an outsider for help and advice. But now is the time to do so. Whilst there is still time ahead to work the problem.
Engaging an experienced transformation director will provide invaluable help and support to you and your Board as you map the future.
Rolling Stones aficionados will tell you that Start Me Up stems from a 1977 recording session and originally had a reggae beat. But in the middle of the session Watts and Richards hit a rock and roll version in a take which lay forgotten until rediscovered in 1981. The final track was laid down in 6 hours!
It took 4 years for this classic track to find its true beat and make its undeniable mark on all our lives.
I just hope the economy finds its post Covid beat quicker!
Picture credit: EVAN AGOSTINI/INVISION/AP/SHUTTERSTOCK