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Building our Business Forcefield

Part II – The Next Wave

We have just emerged from what many will hope was the last lockdown we ever experience.  If the last four weeks have taught us anything at all, it is to expect and be prepared for the totally unexpected.  The speed and velocity at which Covid-19 impacted our lives was enough to make your head spin. 

The rate at which we were all able to settle our minds and focus on the important decisions varied across the business community.  Some took immediate steps such as applying for the wage subsidy and getting on to their cashflow forecasts.  Others used the stillness to take a step back and spend precious time with their loved ones and are now turning their minds to the outlook for their businesses.  

Without a doubt there is huge uncertainty – the predictions for how long it will take for businesses to get back to pre-Covid 19 levels differ wildly while others say that things simply won’t be the same.  The reality is there are more questions than answers and so the best thing to do is to focus on the things you can control and build uncertainty into your planning.

So, at a practical level what does that look like?

  1. If you haven’t already done so, check your eligibility for the Wage Subsidy Scheme and apply if you fit the criteria.
  2. Review your sources and uses of cash upon which you can base your short term (12-week) and long term (6-12 month) forecasts.
  3. If you have debt, talk to your bank and other lenders to renegotiate repayments terms. They will require a copy of your cashflow forecast.
  4. If your balance sheet is strong and your long-term projections are positive, consider taking on more debt to provide the working capital to cover the short term.
  5. If you are renting commercial premises, talk with your landlord about temporary reductions in rent.
  6. Reduce non-critical expenditure and delay any investments that can be pushed back.
  7. Monitor the government mechanisms such as the Business Finance Guarantee Scheme and the Small Business Loan Scheme
  8. Stay in close contact with your business advisor(s). This is the time you need them by your side, and you may qualify for Regional Business Partner funding to cover their fees.

Recent surveys conducted by multiple parties have very similar findings.  There has been strong uptake of the wage subsidies, but a very low proportion of businesses have taken some of the steps mentioned above.  These are critical steps if you are to give your business any chance to get through the turbulence.

In all of this, the cashflow forecast will be an important tool that is used in your discussions to negotiate funding lines and more favourable payment terms, so we encourage you to focus on that first and foremost.

Riria Te Kanawa
National Māori Sector Lead
KPMG in New Zealand

About our guest contributor

Riria Te Kanawa joined KPMG in June 2015 and is a Director in the Performance Consulting team. Riria drives KPMG’s work with Māori organisations and businesses and she ensures that clients can access the right expertise within KPMG that is matched to their needs.

She has 19 years’ experience as a chartered accountant and as a former business owner has extensive experience in advising clients in financial management, strategy design and execution and business planning. She helps client challenge and test the status quo and has an active interest in helping clients apply human centred design principles to design organisational strategy, improve operational performance and identify and pursue growth opportunities. Riria is the lead author of the Maui Rau report series that looks at how Maori might take advantage of the shifts in the world to advance prosperity for their people.

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