Preparing for the ‘New Normal’ in Business

These have been horrendous couple of months as Covid-19 caused heartbreak and tragedy across the world. The Pandemic has done its best to destroy businesses as well, but now it looks like it’s time for businesses to start the fight back. You may have seen/heard Business Minister Heather Humphreys giving due recognition to hardware stores as being a form of essential service.

At JPA Brenson Lawlor we are advising clients to plan for recovery now, not later. Below we have set out our Top Ten Tips for HAI members that you should act on now.

Throughout the Covid crisis, we have looked  internationally to understand what is coming down the track in terms of infection and lock-down. The same approach should be for business. We have now seen the phased reopening of hardware, garden centres and retail businesses throughout Europe starting with Austria leading the charge. Business owners need to begin to put plans in place for the recovery, it may be slow, but it will happen.

Our Top Ten Tips are:

1. Plan for the safety and wellbeing of staff and customers

Keep talking to your staff and giving them the reassurance that they need. Some of your staff may be on reduced hours or on furlough. There are pressures on us all, keep talking to them, be honest and transparent. They will reward you when you need them back when we are out of this.

Prepare for the safety measures that need to be put in place for your customers. This is likely to include physical distancing, reduced access to stores and even something as simple as doing business while talking through face masks. Make sure you identify and implement your physical safeguarding measures and discuss these with your staff before re-opening begins, so now is the time to be doing that.

2. Prepare for increased demand

Hardware businesses have suffered a shocking fall-off in business and all stores have had to make cuts. But do not cut back so far that when reopening you cannot deal increased demand. This is important. Watch your stock and use your years of experience to get the balance right.

3. Communicate with your suppliers

Be open and frank with suppliers. We are all in this together. Those suppliers most likely also owe money and in the main they should be understanding. Agree payment arrangements and terms for stock that you have not yet paid for, ask what is fair for your business and theirs alike. Successful business relationships are based on trust. You may need more stock and support from your suppliers to meet a potential surge in demand, so you need your suppliers to have trust in you and support you. Talk is the first thing to do.

4. Understand new supply channels

Consumer behaviours and habits have changed forever. We never thought we would be buying so many bulk products on-line. There is no reason why this is going to change. Review your on-line presence, how can you make this better and benefit from the new consumer buying patterns. Dark clouds can have silver linings. This may be the push you needed to finally get your business online. You should know that Local Enterprise Offices have generous grants to help certain businesses to gain an online presence.

5. Assess your financial and operational risk

Your business has been through a massive financial shock.

This is the time you need to complete a full financial assessment of the business taking into account;

• Preparing detailed financial and cash flow projections
• Understanding stock levels, re-order requirements and working capital
• Monitoring cost escalation as you return to business
• Understanding contracts and completing contract renegotiation
• Supplier assessment
• Covenant testing on your loan facilities

What has occurred should be a lesson for all of us. We should continuously update a business continuity plan to ensure that any business is on sound financial footing in advance of the next downturn. You may well need to talk to your financial advisers about this but it’s something well worth doing.

6. Benefit from Government Supports

JPA Brenson Lawlor has prepared a comprehensive list of the various Government supports available to HAI members. Make sure you are availing of all supports you are entitled to. Even the smallest things can make a difference. For example, Revenue has recently introduced temporary changes to the Small Gifts Exemption whereby the annual tax free gift of €500 can be split, whereas previously it was one gift only per annum, this is to facilitate employers to reward staff now in a tax efficient manner.

7. Build resilience and prepare for the ‘new normal’

We are accountants so we can’t predict the future but using common sense it looks like businesses will have to adapt to what is being called the ‘new normal’. So, be prepared to challenge yourself, your business and your staff. What was in the past doesn’t have to be in the future. Challenge the status quo and use this time and opportunity to implement change for the better of your business. The issue we will be emphasising over and over to clients is the online opportunity, for example.

8. Talk to Revenue

It hasn’t gone away you know. Many businesses have deferred PAYE and VAT payments for a number of months. These amounts add up. If you are not an SME you need to formally apply to the Revenue to advise them of non-payment of taxes. These monies will need to be paid over eventually, make sure you put robust plans in place to deal with this. Again, take advice.

9. One BIG positive

Some economists are hoping for a sharp V shaped recovery. Others are talking about a slower U shape pick up. But all economists are saying that there will be a recovery, fast or slow. The country still needs a massive infrastructure build and HAI members are frontline in helping that happen. If you can remain resilient for the next short few months the turn will be worth waiting for.

10. Your own mental health

Like anyone in business you have been to hell and back in just a matter of weeks. This is definitely not good for any of us. If you find the strain too much make sure to talk to someone. Talking, sharing, does help. Fantastic organisations like The Samaritans and others are on call 24/7. Talk to a friend. Talk to a spouse. But do talk.