Now more than ever, good treasury strategy with emergency funds for companies and individuals will show its magnitude.
We never stress this enough but having emergency funds both as individuals and as companies is crucial.
For SME (small &/or medium-sized enterprises) we recommend having enough to pay salaries without any income for at least 6 months and outstanding bills for the next 3 months, but that is not the only factor to consider. Some companies have high rents, mortgage or other fixed costs.
Those who are in this situation should consider the strategy for growth and treasury strategy.
Now is the time to sit down and brainstorm. What could have gone better for your business? What can I do for the future, when another crisis hits my business, how can I react and what emergency funds can I create?
Can I adapt my business to a more technical embodiment? Some companies have found new ways to service their clients without any physical interaction, home delivery being one of them, put the business more online or serve clients in space suits!
It is important to look at every obstacle as an opportunity. Viruses heavily hitting the entire world is something companies cannot foresee, but we can expect some kind of crises to hit our businesses every 10-20 years. How we prepare is important. For the travel industry it is exceptionally challenging this time, and for some companies it is inevitable to close until the worst is over.
For other financially healthy companies, they can look at this as an opportunity not only to grow in the future but also help the current situation. You see, investing at times like this can be beneficial for the company, profitable, the economical situations, and for the seller. Doing nothing at all is risky at a crisis as this one, competitors might innovate and adapt to the current situation leaving your company at great risk or worse a economy collapse.
Investing in local companies, entities or real estate will benefit Iceland’s economy. Let’s focus on supporting local companies, local products, local manufacturers and let’s help each other to get through this crisis. Both as business owners, individuals and the government. Keep buying products and investing.
Strategy and opportunities during this crisis
Invest in other companies, business entities or even real estates
Develop growth strategy
Take the next step in technological & digital development both for a leaner workflow but also to meet current customer demands
Analyzing the gross margin and cost of goods sold, any improvements possible?
Refinancing, The Central Bank in Iceland recently lowered their bank interest rates to 1,75%
Other focus groups to reach? Untapped market spaces?
Save 15% of your income to an emergency account, until you have reached at least 6 months of the employment salaries
Negotiate with creditors
Negotiate with suppliers
Use of working capital
Estimate your inventory turnover and possible inventory improvements
Crisis force us to think outside the box, breaking societal practices, habits or customs in order to survive.
At times like this it is important to take care of each other, and our families, and stand together to find better solutions and ways to get through this.
Business might not be the sexiest profession, but it is crucial for families to earn their living. Some businesses can also look in to whether there is something they can do to help society get through this, with charity and support.
What can you or your company do to help?
We are all in this together!