Max Thorne of the MRP Group looks at the effects of the coronavirus pandemic and offers some suggestions for mitigating its impact.
I have experienced and navigated through several global economic, political and natural catastrophic events. These include the dot com bubble, 9/11, SARS, Ebola and the 2007-09 Global Financial Crisis.
With extensive experience in dealing with the impact on operational businesses, especially hospitality, I would say the two key areas that need focus are maximising revenue drivers and cost control. Both are essential to keeping businesses liquid.
Unfortunately, for many hospitality operators, this will be one of the most turbulent periods for the sector and wider economy. The virus is already having a substantial bearing on revenue, especially occuring as it has around crucial periods such as St Patrick’s Day, Easter and numerous sporting events around the corner.
I have shortlisted some of the major impacts on operators below and stress it is imperative for operators and boards to be planning for the next six to nine months. There has already been a significant impact on cash flows, caused by disruption to revenue streams, difficulties in supplying goods and maintaining services and postponements in accounts receivables being settled.
The UK is currently lagging Europe in the virus’ effects on the economy and the population. However, it is crucial to use this time to plan for what is coming and what is being seen in other countries.
There are several other important items and perspectives that need to be considered to minimise the impact of Covid-19 on businesses. Consideration needs to be given to key items such as:
- Revenue by analysing geography, consumer segments and diversification
- Cost analysis including identification and reduction of the primary cost centres
- Review of operating and overhead costs
- Scenario Analysis
The MRP Group and Max Thorne have been through several global crises, and has experience in managing severe cost control requirements and ensuring businesses stay liquid. Given the Covid19 scenario, it is offering free initial consultations to assist anyone who requires guidance or a sounding board to use.
