It’s time for businesses to work out their own plan

The covid-19 exit strategy – what’s your plan - Image by PublicDomainPictures from PixabayPost the Prime Minister’s conditional plan to move out of the present Coronavirus enforced situation, businesses should now be planning their exit from the lockdown.

Businesses will be getting used to their own ‘Real-Time Contingency Planning’ (active for a few weeks now). This has undoubtedly made businesses much more agile in decision-making and will now fall into the category of the new normal. This enables businesses to become better prepared for all eventualities, bolstered by guidance on how their workplaces can become “COVID secure”.

Directors and owners will be in a particularly difficult position as they now must create a safe environment. This will involve time, a decision on financial investment vs the cost of remaining closed plus an assessment of the threat/risk to their staff of not having a safe place to work. See our Business Support hub for practical guidance. All the more reason for all businesses to plan ahead and to consider this exit strategy checklist.

Your exit strategy checklist

To date, the UK government’s help has been much appreciated. However, every business needs to have their own detailed, robust and well-considered strategy in place. This will encompass the lessons learnt through tackling the onset of the crisis, surviving the duration and ultimately emerging well prepared to face the other side. Watch our recent webinar on the Priorities for the New Normal for practical support.

Menzies post-lockdown business checklist

  1. Cash flow forecast – Be sure to have a detailed cash flow forecast and if possible, a joined-up profit and loss and balance sheet (interactive with cash flow). This is often referred to as a three-way forecast and should focus on the medium-term timeline. This enables businesses to really understand the impact of decisions made right now on future cash flow. Businesses have been deferring a lot of liabilities and they need to understand what this means in the medium term, particularly if they’re trying to work out whether to borrow additional funds. How much do they need? Can they afford to repay it?
  2. Quality management information – Be in possession of good management information. This will be crucial to making good, strategic and agile business decisions as well as giving you visibility over deferred liabilities and those new due dates. The data may also highlight any additional funding requirements, whilst allowing you to effectively stress test and fine-tune your exit strategy.
  3. Understand your pipeline – Spend time interrogating your pipeline including any transactional work that dropped off at the end of March and other opportunities arising. This will help you to assess the level of activity and the likelihood of these coming on stream. Be aware that where business diversification has taken place, this may have changed.
  4. Understand your supply-chain – Carry out a forensic review of your supply chain e.g. components or staff, linking back to your pipeline and/or order backlog.
  5. Do you have the right staffing levels – Continue to analyse your staffing levels within your return to work plan being sure to measure both positive and negative capacity issues. For a departmental or diversified business, this will involve analysing each team, production area or service line as they will all come back online at different speeds.
  6. Stay close to existing and previous customers/clients -Do this by email, social media or, most effectively by phone/conferencing facilities. Your clients will feel valued and looked after which in the long run may help you build your trusted advisor/partner/key supplier status. Your aim should be to feed the pipeline by re-confirming (or re-engaging entirely) in order to add certainty to a period which could be very difficult to predict.
  7. Identify any competitive advantages – Are there some weaknesses in your direct/indirect competitors or even gaps in the marketplace that you can seize upon?
  8. Invest in your ongoing internal communication strategy – This will be critical to ensure that everyone within the business knows what is expected and any appropriate parameters to work within. This is especially important in relation to pricing and all client/customer-facing personnel need to have a full grasp of the current pricing model. This ensures that value is clearly articulated and where possible margins understood and protected.
  9. Retain cash for contingencies – Review your current retention model and consider whether instead of extracting all profits you should set a new benchmark so that the business can retain cash and reserves for contingencies.

Need help with your coronavirus exit and business response plan?

These are difficult times for business owners and planning ahead can make all the difference to your future success. Whether you’re unclear about your next steps or simply want a second pair of eyes to review your plan, get in touch with one of our team.

*lockdown measures for the devolved nations (Scotland, Wales and Northern Ireland) may differ.

This article was previously published as part of a page on the Menzies site

Menzies LogoMenzies is a top 20 leading firm of accountants, finance and business advisors that operate out of a network of offices across Surrey, Hampshire and London, providing our clients with easy access and local knowledge. Described as the ‘best performing firm outside of the top 10’ by Accountancy Magazine, Menzies has over 400 employees and an annual turnover of more than £40m.


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