Businesses need a plan for survival in tough times

MEDIA RELEASE
24 February, 2009

Current Economic Environment Not All Doom And Gloom For Savvy Companies

Businesses need to format a plan for survival in tough times

Businesses which have a pragmatic approach and adapt to the changing circumstances will prosper regardless of the economic cycle, according to accountancy firm Staples Rodway.

Colin Theyers, Director of Staples Rodway Limited and a senior member of the corporate advisory team, has experience spanning over 25 years in the corporate and professional sector managing and restructuring non performing businesses.

He says the current environment could well produce opportunities for business.

“A company’s competitors and suppliers may be willing to embark on co-ventures that would not have been on the table in more prosperous times. Market consolidation may enable businesses to expand with the acquisition or merger with a competitor’s businesses. The additional revenue and margin can be utilised to cover fixed costs and a properly implemented acquisition should enable companies to benefit from synergistic savings,” says Mr Theyers.

He says rising unemployment both in New Zealand and overseas may result in easier recruitment of skilled employees.

“The time may be opportune to hire returning expats or migrants looking to escape the relatively worse situation overseas.”

Mr Theyers says attitudes are paramount in the current climate, with a positive but realistic outlook essential for survival.

“Slow sales, fluctuating exchange rates, rising unemployment and widespread uncertainty are resulting in a potential minefield for businesses looking to make it through the year ahead. Business owners can’t simply hope for the best at the moment.

“Doing nothing means losing control of the outcome and the result is highly likely to be disappointing or even disastrous.”

Mr Theyers advises companies to start by conducting a thorough business review, determine the shape of their business and format a plan to achieve survival.

“Companies should be looking at what’s happening in their market and how pricing structures, demand and supply have been affected. They need to look at the whole spectrum including customers, competitors and suppliers and ascertain how their actions or inactions are affecting their business.

“But having a plan is not enough. It is the successful implementation of that plan which will enable businesses to achieve their objectives. Staff need the skills to execute the actions required in challenging times. Many restructures fail to realise the perceived benefits, as the skill set and approach to execute a change process is different to managing a business in more stable operating conditions.

Mr Theyers advises companies to use their advisory team to provide an independent perspective on the key issues.

“Companies may need to restructure for a more effective operation and be proactive in reorganising for optimal performance in the hard times ahead. In these market conditions few businesses have the luxury of doing nothing.”

ENDS

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