Our country is in the grip of COVID-19. The virus is affecting some Dutch people more than others, both physically and mentally. One thing is certain, however: the Dutch business community is a high-risk group.
Flexibility
Reports are emerging of companies that have managed to temporarily adapt their business model to COVID-19 and manage to keep their businesses afloat by focusing on areas of the supply chain or product stocks that are under strain (disinfectant, ventilators, etc.). For a large proportion of businesses, this flexibility is not an option. There are numerous companies that are facing months of severe financial hardship. Some of them will not survive, despite the support measures made available by our government.
It is therefore crucial that every SME owner understands their financial situation. After all, what is the impact of lower productivity amongst your staff? What is the fixed cost structure you will have to bear over the coming months? Where is the break-even point, and is it still achievable?
In the coming months
We have extensive experience in the field of performance pathways. During a performance improvement programme, we begin with a baseline assessment in which we clearly map out the company’s revenue model, capacity and cost structure. This enables us to quickly and reliably calculate the impact of measures on the bottom line, particularly in these times.
In the current situation, it is particularly important for SME owners, in the short term, to understand how any coronavirus-related measures they take will affect their liquidity. For example, they may need to draw on a larger overdraft facility with their bank, or apply for an extension of the BMKB(-C) makes this possible under certain conditions. To gain an understanding of liquidity, it is crucial, first and foremost, to have up-to-date accounts, a clearly defined accounts receivable and payable policy, and to identify feasible measures.
The financial specialists at VWG can help you determine your initial financial position based on various scenarios. In doing so, we combine principles from our return pathways with an accurate calculation of your liquidity requirements.