11/10/2020 by MNV Associates
Business Recovery in the UAE Post Covid-19
The COVID-19 pandemic has rattled the global trading infrastructure's very foundations. At least 21,000 more firms have collapsed this year than last March, and many are on the brink of bankruptcy. Today, in the trade market, the main challenge is how to launch business improvement in the midst of the pandemic. Business is not only selling the goods, but also ensuring that, regardless of the conditions that may arise from economic instability, the company retains its current concern.
Covid-19 Company Recovery Report
Depending on the business form and the factors that can affect it, the severity of the effects of the pandemic can differ from company to company. What is essential, regardless of the business structure, is getting an effective business recovery plan in place to challenge such volatile circumstances? A strategy that will enable them effectively to restart their functions once the situation gets under control.
Corporate analysts say that, following a crisis, firms with an exit plan in place are far more likely to be able to cope better. There are also other choices for companies struggling to return from the economic effect Covid-19 has had on them, such as Business Support Networks, Loan Programs, Government Return to Business Support initiatives, etc.
Company Outcomes of COVID?
At the end of 2019, the Covid-19 infection was first reported in Wuhan. The transmission of the disease was so fast that its scope could be expanded to more than 200 countries worldwide. Unlike ever before in the last 100 years, the COVID pandemic has adversely affected global economic development. Research from the Congressional Research Service suggests that in 2020, the current pandemic could slash global economic growth by 3-6%. Only if there are no more waves of infection could there be indications of a partial recovery in the year 2021.
The economic implications of the worldwide lockdown have raised the risk of another global economic crisis with disastrous consequences.Some estimated that, based on the severity and scale of the global economic downturn, international trade would decline by 13 percent to 32 percent. Per the latest analysis of the World Merchandise Exchange, trade-based economies are far more likely to suffer from this pandemic compared to agricultural economies. In the second half of 2020, there was a record decline in world merchandise trade.
In the third quarter, the additional reading suggested slow recovery and performance, but the power of such upticks remains highly unpredictable.
Assess the financial losses
When planning on a recovery plan for company, there are some aspects to bear in mind. It is wise to begin the creation of the plan by evaluating the sum of COVID-19 's effect on your business. By contrasting their current balance with the pre-crisis balance, such as the past year or quarter, you can start by examining the most relevant accounts, such as revenue, earnings, and cash flow. This helps you recognize your business's most weak roles and allows you to prepare appropriately.
There is a very small fraction of companies that profit from the Covid-19 pandemic, some reports say. For instance, no negative effect of the pandemic was seen by the pharmaceutical industry, but it is depending upon the nature of the industry.If you also focused past profit and loss to determine the effect, such as logistics, HR, market competitiveness, and others, it would be best. For example, if you plan to cut your business team short, then you'll need to include this in your business reconstruction plan. Similarly, if you intend to slash your marketing or logistics budget costs, then you need to weigh these variables. When working on a reconstruction plan, you can do all this. These factors allow you to look at your financial capacity to rebuild the organization.
Even if you're not sure how to determine the financial effect of different factors on your company's recovery, you should try to talk to an experienced business accountant who ought to be ready to assist you correctly evaluate the financial harm caused by the pandemic of Covid-19.
Revisit your business plan for the rapid recovery of corporations
Your organization may be based on an ideal company model and may have done extremely well before the crisis. However, when met with a crisis, the optimal business model increases the effectiveness. So, to change it accordingly, you can review your current strategy.
When changing the current business plan, there is a lot to consider. Finding a response to how you can adapt your organization to the new normal must be prioritized.For example, if your company depended on consumers from the vicinity of your brick and mortar shop, you would want to take a digital strategy to extend your range and anticipate more customers to buy your goods from home.
A comprehensive examination of how your business has been impacted by the pandemic or self-isolation of Covid-19 is recommended. When you look at your industry and how your rivals are reacting to the crisis, you could end up discovering growth avenues and trends to pursue.
You should aim to talk to an experienced business accountant who should have been able to help you properly assess the financial damage caused by the Covid-19 pandemic if you are not sure how to determine the financial effect of various factors on the recovery of your business.
Accounting early on for potential finances
Until the crisis is defused, you could be forced to allocate more capital into your company to gain more capital. For example, if you intend to take on new workers or approach those you laid off during the recession, then you need to spend extra money on training and recruiting them. In order to satisfy the increasing business needs after the pandemic is over, you would have to spend more money to buy additional inventory. Also, to enjoy a fresh start in the industry, you will be expected to inject more into your marketing ventures.
If you have planned for situations that are most likely to cost you a fortune earlier than planned, your recovery plan will prove to be far more efficient. Your goal should be to get rid of fiscal waste and to operate on a leaner operating budget than before. By saving once a lucrative growth opportunity appears, you can then take full advantage.
Design a timeframe for business recovery
Patience, efficient decision-making, and continuity are all about running a business. Soon after the aversion of the crisis, you may have a list of things you need or want to do in mind, but you'll have to be careful as recovery time will take longer than anticipated. You can start working on a schedule to adopt instead of waiting for things to get right, which lets you recognize the most important aspects of your company and focus on working on them appropriately.
Your most significant short-term objective, for example, is to get enough money to help you cover your regular costs of doing business. You may then set a timetable for training, recruiting, or rehiring workers once you receive the funding. Additionally, if your business has not been permitted to function as a result of the crisis, you can set a timetable for restocking inventory and also the reopening of your company.
A long and challenging path is the road to recovery, and you'll need to take one step at a time. As you step along, don't forget to chart company's performance. You would be able to prevent your company from participating in low-return investment activities by keeping track of the changes, especially when you have achieved the required level of funding.
Getting the guidance of an accountant
When on the path to recovery post-COVID-19, the chances are that your business expenses will increase. After the crisis is defused, you could come across a new set of problems and might ask for more attention to them. But because one of the most important aspects of your company is the financial element, you must leave it at the behest of a financial specialist such as an accountant.
Recovery Experts will help you get on top of your finances from the best accounting firm near you. They can do so by helping you manage your financial reports, update the account of your organization, file precise tax returns, and avoid penalties and fines. In order to help you save some extra money, they will also help you recognize future tax relief.
In addition, during tough times, you need an expert to direct you, and someone always ready to provide you with infinite solutions to any issue your company faces. You save more time by recruiting a competent financial advisor to concentrate on the company's other value-adding tasks.