Survive the Downturn - Manage Risk and Uncertainty

Extract from ICAEW report: 8 Ways To Survive The Downturn

Find out how identifying and managing risks to your business can help you survive the downturn.

Business risks have changed dramatically as companies of all sizes find themselves caught in supply chains facing global market volatility and uncertainty over the availability of finance.


Undertake a rigorous and honest appraisal

Now is the time to undertake a rigorous and honest appraisal of the risks facing your business and ensure your risk management systems and controls are up to scratch.

* What are the main risks facing your business now and in the future? How have these changed?
* What is the impact of these risks on your plans to grow and finance the business?
* Is your business sensitive to currency fluctuations?
* What is the impact of loss of turnover? Is the business showing signs of under-performance?
* If borrowing becomes more difficult or more expensive, how will this affect your finances?
* How will you maintain the confidence of your key stakeholders – investors, shareholders, customers and staff?
* Have your or your suppliers’ credit ratings been affected?
* Can your business meet its pension fund obligations?
* Are you exposed to any bad debts?


Maintain the confidence of your key stakeholders

It’s important at this time to maintain the confidence of your key stakeholders, whether they are major customers, suppliers, the banks, audit committees or shareholders.

Managing information during this period will be critical to maintain confidence and avoid nasty surprises – remember the internet can undo good news in seconds.

Be aware that shareholders’ expectations may have changed or may change during a period of uncertainty. They will want to know that you have challenged your assumptions, have confidence in your forecasts and have plans in place to respond and adapt quickly to unexpected changes in the market.

Audit committees and shareholders will want to be confident that you have financial and risk management systems in place to manage through the recession.

Source ICAEW - full report can be downloaded by clicking here.