What Makes A Business Resilient In A Crisis?

By: Kirsty Godfrey-Billy.

While the unfortunate reality is that some businesses will not survive Covid-19, there are many others that will weather the storm by quickly adapting their offerings and operations. In my experience as CFO of a global software as a service company, I see three key commonalities among the businesses that are actively moving into business recovery.

Strong Business Fundamentals

For business leaders, the current climate is something of a balancing act. On one hand, they need to maintain strong connections between the core pillars of finance, risk, people, strategy and operations. On the other hand, they need to ensure they are not missing an opportunity to drive their business forward.

To maintain this balance, it is vital that the business is grounded in strong fundamentals. This includes a strong, flexible balance sheet and secure access to clear capital so the business can operate under a worst-case revenue environment. A good understanding of your business’ revenue channels and cost models is also imperative, with projections of multiple revenue scenarios.

This may involve identifying lead and lag indicators for insight on how the business is tracking, as well as understanding contractual commitments and crucial costs for the business and how they contribute to the cost base. These revenue and cost models will provide an agile perspective on the returns of any investment made in the business moving forward.

Source: Forbes (2020)

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