It’s mixed fortunes for Food & Drink businesses as the fall out from Coronavirus continues. With grocery sales surging to their highest levels in more than a decade some businesses are experiencing peaks in demand usually seen only at Christmas where as those in the hospitality trade have seen sales drop off a cliff. Only those with the agility to move their customer base direct to consumer or retail will be able to survive without significant bailouts.
What is clear is that working capital is absolutely key to the survival of all these business and for many will be needed immediately. Never has a business’ cash position and cashflow been as important as it is now, regardless of the issues it faces.
So what can businesses do in the short term to preserve cash and maintain working capital balances:
Accurate cashflow forecasting is vital in these uncertain times to identify your key cash pinch points. Without it, any contingency plans put in place might not be as effective as they could be. Reviewing your potential workflow over the next few weeks or months will identify where you might need to negotiate staff pay and/or hours to match your output.
There are also opportunities out there for additional revenue sources. Many businesses now have spare assets and resource that could be hired out to those businesses who need that helping hand to meet demand. Working together, acting quickly and being adaptable will help your cash position.
Further details on all the above points are on our Coronavirus Knowledge Hub. If you need any further help, please contact any of our Food and Drink Team.