Finance Director: 5 Tips to manage your SME out of lockdown

Finance Director

Covid-19 has fundamentally reshaped the UK’s economic landscape and there have been many casualties along the way. But now that the initial reaction phase is over, getting back to some sort of ‘business as usual’ offers a new set of challenges.

How can the Finance Director support the SME to get back on its feet?

  1. Flexibility planning

The budget is out of the window, now is the time to focus on scenarios, what happens if sales half…or double? Understanding your new market place, competitors and consumers is key to the actions that follow on. Then depending on the outcome, look at restructure, operational efficiencies and overhead reductions accordingly. An article I wrote on forecasting could help:

  1. Improve liquidity

Based on the scenarios look at cashflow requirements. Ensure credit control is functioning effectively, purchase efficiently and work with suppliers to agree terms. The Government is offering a variety of loans, grants and benefits and reliefs, can these be utilised? Revisit financing arrangements, can further cash be drawn down? Or a low interest loan be utilised? I refer to an article I wrote on improving working capital here:

  1. Managing the Team

With children at home for the next few months, there is likely to be a period of hybrid working with some in the office and some working from home. Ensuring that the teams are working effectively and productively in the period is paramount. Keeping on top of the reporting requirements is essential as is ensuring the health and wellbeing of the team. I wrote an article on ways to avoid zoom fatigue that may help:

  1. Stakeholder Communication

Ensuring that the wider business has the right information at the right time to make decisions. Ensuring that investors and lenders are kept in the loop about the business as they may be able to help. Ensure that employees are kept informed to ensure they still feel part of the team even when working remotely. Keep the lines of communication open with the supply chain to anticipate problems in supply, price changes or when customers change their orders.

  1. Manage risk and build resilience

Revisit your risk model and update with new knowledge as it arises. Your competitors may have adjusted to Covid-19 well and what can you learn from how they have adapted? Look to build resilience into the business, alternative suppliers, new sales channels such as E-Commerce and building an agile workforce. Many businesses have shown great innovation over this period, especially with their use of IT, and this could be the source of differentiation going forward.

Putting these steps in place will not only help you recover and survive from lockdown, but to potentially thrive. As Benjamin Franklin said “Out of adversity comes opportunity.”

If you need help putting any of these in place then why not get in touch? A portfolio FD can give you agile assistance that can be turned on and off when you need it.

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