There’s Light at the End of the Tunnel for Pandemic-Stricken Businesses

To find out how the pandemic has affected Canadian companies and how they can weather this storm, Mediaplanet spoke with Yohaan Thommy, Consulting Partner with MNP’s Consulting Services team who leads the firm’s performance improvement practice.

What’s the current state of Canada’s business environment?

The pandemic has caused a lot of disruption. Many small- and medium-sized businesses don’t have access to financial relief, so they’ll have to plan to run their operations with less cash and more inventory as supply chains move from “just in time” to “just in case.”

How should businesses react in general?

A lot of owners are worried about being resilient in the short term — they’re focused on gross margins, but they would be better served by focusing on other issues, such as return on investment in terms of cost and time commitment.

What are a few of the specific steps a small business should take to adapt?

First, companies should get employees back to work. A majority of companies will experience a significant change, so they should look at ways to adjust their business models and sales channels. Some customers who were historically uncomfortable operating in a digital world may be changing their preferences. This is creating new business dynamics going forward.

Companies should prepare weekly cash flow forecasts for at least the next three to eight months to understand your cash flow needs and to determine how long your business can continue without burning through your working capital.

Small businesses should also identify all their critical accounts. Reach out to all the customers who represent critical accounts to understand how their needs have shifted and how to best meet those needs.

Another step is to manage your payables carefully. Prioritize important vendors when timing payments. For other vendors, discuss flexible or extended payment options.

Also, building many relationships and partnerships is a key aspect of resilience. If you’re a business owner who’s been relying on one supplier, change that.

What lies ahead?

We’ve yet to see the full economic impact of the pandemic. It will affect every aspect of industry, including supply chains. Companies will have to invest in risk management planning to identify the challenges and employ solutions to meet them. All this can prove costly, so smaller companies will go out of business unless their value propositions aren’t based on price.

However, this disruption is also creating new opportunities. Successful companies will adapt to the change.

Small- and medium-sized businesses and entrepreneurs are encouraged to make MNP, a leading chartered accountancy and business advisory firm, their partner in business recovery.

This disruption is also creating new opportunities. Successful companies will adapt to the change.

Yohaan Thommy Consulting Partner, MNP