What is the impact of Covid-19 on the digital industry? Is it shaken? How is it being impacted? Wich consequences will a company in this industry suffer in terms of its stability and financial situation?
Here are some tips to help you and your company.
When we talk about 2020, “uncertainty” is the main keyword. Covid-19 thrives inside and outside Europe, from smaller industries and businesses to larger and well-capitalized ones.
The truth is that this austere pandemic will have immense repercussions on the global economy and probably foment a new World recession.
People, organizations, and industries are being strongly affected, and we are now seeing huge decreases in the stock exchanges values.
Businesses, schools, and museums closed to decrease disease dissemination, employers had to switch to remote work, resort to government support like lay-off, and many were forced to close doors.
If remote work was a doubt before, today it’s a certainty.
According to the Global Financial Stability Report, the financial system is experiencing a significant impact with repercussions not only in the short term but in the medium and long term as well, affecting the entire World’s economy.
Situations such as the increase in the risk premium, credit access conditions, disruption in the payment system, a sharp decrease in employment rates profitability, an extension of consumption and investment decisions, and also a decrease in liquidity capacity. These are just some examples of our economic and financial reality.
It seems like the ideal time for companies to reinvent themselves, and the digital industry is no exception.
Do you want to know how to “save” your business and industry? How can the economic effects of this pandemic be minimized and what measures should be taken to fight it?
Here are some of our secrets:
- Our main concern has undoubtedly been to guarantee and prioritize short term cash flow while looking for possible changes in payment and receipt terms;
- Look for additional sources of capital, incentives and government support to internationalization;
- Conceive and review all operations and cash flow forecasts, foresee a pessimistic scenario, and ensure the maximum possible cash flow. Of course, an extra push will be essential at this point, nobody said it would be easy;
- Review all types of obligations and documentation, from margins to possible flexibility in financial trading. At this point it is important to increase the company’s liquidity, however, it is also a great time for processes optimization;
- Safeguard and establish relationships with companies in the same industry and other possible interested entities. Being attentive, understanding your needs and interests, as well as boasting a strong position in the market, are some key attitudes capable of sustaining the relationship, increasing trust and enhancing a feeling of security for all involved.
Everything possible right? Our aim is that our businesses remain healthy, evolve and that we grow with it.
In this context, a healthy financial situation is a way of reducing the uncertainty that erupted with Covid-19. It should not only be seen in a negative way but as something that promotes the growth and development of new ways of thinking, acting, and facing the reality that until then was linear.
This is, therefore, a good time to guarantee and prioritize short-term cash flow, explore alternative sources of capital, forecast cash flow scenarios and inflows, review obligations, optimize old processes and establish new contacts and relationships.
In this sense, the keys to success are to anticipate, act, and believe!