The effects of COVID-19 on the health of individuals and society is profound and unnerving due, in part, to the speed of its impact. Similarly, the sheer magnitude of COVID-19 as a change agent will likely be unmatched for the foreseeable future.
For business, including private enterprises, COVID-19 has emerged as a profound disruptor, requiring business leaders across the country to take unprecedented steps to sustain the health of their businesses and, in many cases, the well-being of their employees.
New challenges have continued to evolve and emerge with the spread of the virus, and our Government and other state agencies are providing a number of supports and assistance. In the midst of this turbulent environment, we see many practical solutions coming from a host of private enterprises both here in Ireland and around the world as they tackle these challenges.
Discussions have shifted quickly from a primary focus on growth to one of business sustainability and escalating concerns related to cash flow management and forecasting; business continuity; optimisation of working capital; supply chain disruption; and the risks associated with losing employees and customers. As the Government, its agencies and other key stakeholders such as banks introduce supports and other economic relief measures, navigating the opportunities to access these support mechanisms has become a complex task in its own right.
However, in the process of addressing these challenges, our conversations with many entrepreneurs, founders, family businesses and other private enterprise business leaders are beginning to change, as they turn toward the exploration of new opportunities that could be seized in dislocated markets. Potential acquisitions, business restructuring, and product innovations are all being considered.
In general, we see successful private enterprises focusing on five critical areas to strengthen their businesses during this period of accelerated change, while also preparing the path forward.
This includes a close examination of the immediate and longer-term financial, operational, supply chain, legal, and governance models, as well as an assessment of competitive risks and the potential customer and employee-retention concerns.
Detailed analyses of current and future working capital and cash-flow requirements are being conducted along with consideration of how to optimise the availability of tax incentives; identification of alternative financing sources; ensuring access to all available Government incentives and reliefs; and recognising expense-reduction opportunities.
Following a customer risk assessment, businesses are developing strategies to enhance customer retention and identify new customer segments. New product developments are being explored to attract new customers along with potential acquisitions for growing the customer base or adding new customer types.
Given the potentially volatile working environment, strategies are being developed to enhance employee engagement and retention. These can include the consideration of flexible work policies, updated reward programmes and employee retraining.
Internal efficiencies are examined with the goal of identifying improved processes and procedures that could translate into improved customer and employee experiences. This includes the potential for streamlining or restructuring business operations; introducing innovative cost-control approaches; identifying flexible, supply-chain alternatives; allocating resources more efficiently; and enhancing data collection processes to inform strategic business decisions.
These focus areas reflect the pragmatic business approach, combined with agility and resilience, of entrepreneurs and other private enterprise leaders who are successfully making adjustments to their businesses to sustain their success. Perhaps we’re watching the next generation of great private enterprises emerging among companies that have the foresight and agility to uncover new opportunities.
We at KPMG Private Enterprise understand the potential consequences of the current global health situation for businesses like yours. Watch for our regular updates to stay informed about the business impact of COVID-19 and gain fresh insights for sustaining your business health.