Business rescue has returned to the forefront in Ireland as a result of the economic impact of Covid-19 across the globe. Here, we highlight Managing Partner Neil Hughes’ ‘Seven Cs of Business Recovery.’ As businesses face extreme challenges, it’s important to adopt the appropriate measures; Now, for tomorrow.
Following Ireland’s financial crash of 2008/09, I wanted to help Irish business owners realise that despite the bleak economic forecast, there was a straightforward way of navigating the obstacles presented.
And so, drawing on my experience of crisis management – working with and advising Irish businesses in the area of corporate and business recovery – I developed the Seven Cs of Business Recovery framework in 2010.
At the time, I had no idea that the topics discussed would become so relevant again, so suddenly, a decade later. Irish businesses are currently facing exceptional challenges as they grapple with the fallout of the ongoing COVID-19 crisis.
The Government and the Revenue Commissioners have introduced immediate short-term reliefs for organisations who face cash flow difficulties in the weeks ahead.
The pandemic has rapidly transformed our economic and employment landscape and our traditional economic outlook is simply no longer viable. However, I believe the principles set out in the Seven Cs can help position businesses on the road to recovery.
Chapter 1: Counsel
The Seven Cs of Business Recovery start with taking advice to establish where your business is now, how certain challenges have impacted your business, and most importantly taking Counsel about where your business is going.
Leading your business through extreme challenges means taking advice from a select group of professionals who will help ensure the proper choices are made to deal with the current situation.
Uncertainty and increasing pressures can make it difficult for business owners to identify the correct strategies, which is why taking counsel at an early stage is so important.
Three advisors to seek guidance from:
Typically bringing strong numerical and analytical skills to the table, your business projections for the post COVID-19 landscape will require insights from your accountant into statistics that measure the performance of your business.
An accountant will look at specific areas that need to be improved and will help you make difficult, but necessary decisions. More often than not, it is the advice of the accountant of the business that can lead to its survival.
Trained in reasoning and structured problem-solving, a solicitor can be of great benefit to your business in good times and in bad but especially when there are difficult conversations to be had with employees, landlords, creditors and other key stakeholders. There may be legal remedies available to you in relation to the issues you face that you are unaware of. It is important to take legal advice early and avoid taking a ‘do it yourself’ approach to researching the law.
Historically, this might have been your bank manager; now many businesses have alternative debt providers, equity players, angel investors etc. A major source of advice and often a voice of experience, your funder should be one of the first people that you touch base with; communicating your situation so that solutions can emerge which will keep the wheels of your business well lubricated. A lack of profitability can be temporary, but it is always a lack of cash that accelerates business failure.
The importance of being selective
In most of the recovery cases I have been involved in, a common error of the business owner in crisis was not taking advice which could have ultimately led to the right decisions being made and the business protected or preserved.
An even more dangerous phenomenon I have witnessed has been advice sought from too many ill-informed sources, or indeed from unqualified social media posts. Be selective in who you retain in your tight group of advisors; listen carefully to their counsel and then move swiftly to the next stage of your recovery plan.
For more detail on how to get your business positioned on the road to recovery, ‘Beating the Recession: The Seven Cs of Business Recovery’ is available to buy here.
The current crisis has led to an urgent requirement for the preservation, rescue and restructuring of viable Irish businesses. Baker Tilly are market leaders in the Examinership sector, having acted in over 250 cases. Learn more about the examinership process and how we can help here.