No one likes to leave life to chance. Most of us prefer to plan than experience a last-minute panic. Build a list of opportunities rather than have limited options.
However, the ongoing pandemic, Brexit and the current economic downturn are giving us plenty to contend with. Businesses across all sectors are having to adapt fast to a new set of challenges and constraints on financial planning and forecasting.
The recent lockdown restrictions are curtailing any chance of a speedy recovery in the first half of 2021. Unemployment is predicted to spiral with the end of the furlough scheme. The Resolution Foundation think tank predicts that ongoing restrictions could mean the economy is 6% smaller than previously forecast, cutting 2021 growth to 4.3%.[1] Consequently, most businesses will need to adapt to the ever-changing and increasing uncertainty, with few assurances of what the future might hold.
Winners and losers
It might be said that luck and providence have played a part, to some degree, with the pandemic. There have been both predictable and unlikely winners, along with a high number of businesses who have experienced financial losses. Currently, Manufacturing, Travel and Transportation, Hospitality and Retail have all reported the worst overall impacts.[2] Even within specific sectors, prospects vary. Retail as a whole is up by 30%, with a rise in demand at supermarkets and pharmacies and a significant spike in online sales. However, bricks and mortar stores have seen a huge drop in demand. Similarly, within Hospitality (a sector directly impacted by the current challenges), trade has been affected by the fortunes of location and season.
However the dice falls, what is certain is that to survive, every business must respond with a robust recovery plan – to proactively manage change with financial management decisions that are based on intelligent, robust insights and information.
Forecasting future demand
We appreciate predicting the unpredictable is difficult. From the impossibility of forecasting future demand and revenue based on historical data to second-guessing changes to government legislation. But there are financial management performance tools that can directly assist with the specific range of issues and challenges facing individual industries. The key is to match solutions to specific sector challenges with robust, agile financial planning and management. To prepare your business for the range of immediate uncertainties you may face, you’ll need to equip your office of finance to robustly manage change, and increase resilience.
What if? Test the future rather guess its impact
With so many other aspects of life beyond our control, isn’t it better to test the future rather than guess its impact? Scenario planning is a valuable tool to assess the impact of critical uncertainties, new organisational initiatives, and fresh market opportunities. Ultimately, it enables you to manage uncertainty with confidence by providing answers you can trust to the ‘What ifs?’
Axiom’s modelling functionality equips you to strategise for uncertainty by drawing on data from across your organisation and factoring in the various drivers that impact your business outcomes. It enables you to:
- Define the key internal and external drivers of the business
- Quantify your financial sensitivity to these drivers
- Test the strength and flexibility of a strategy under rapidly changing conditions and multiple variables
- Model scenarios that depart from the current conditions
- Investigate possibilities that would otherwise have been missed
- Prepare for various combinations of adverse circumstances that may manifest
- Produce higher quality strategic plans, budgets and forecasts
Plan and manage through financial uncertainty
The unprecedented scale and speed of the current crisis, with further challenges on the horizon, mean businesses across all sectors need to adapt quickly to survive the impact of 2020 and the ongoing changes 2021 will bring. This is a critical time. Do not leave your business to chance. Put the spotlight on your financial data in order to develop forecasts and strategies for recovery plans and future success.
It’s all about applying financial intelligence that can best empower your decision-making – modelling different financial scenarios to improve your forecasting so you stay ahead of the competition, now and in the future.
Our new eGuide, ‘Fit for the Now‘, focusses on helping you through the range of challenges and pressures you face here and now. We address how you can best manage and forecast your financial performance in these difficult times of ongoing uncertainty.
Axiom’s eGuide, ‘Fit for the Now: Adapting to challenging times and economic uncertainty’, explores:
- The immediate challenges for different sectors
- The importance of cash management
- Developing effective supply chain management
- Workforce planning and management
- Financial management data at a detail level
If you’d like to find out more about how you can empower your decision-making with agile financial planning in these uncertain times, download a free copy of the eGuide here.
[1] https://www.resolutionfoundation.org/publications/macroeconomic-policy-outlook-q4-2020/
[2] https://www.statista.com/statistics/1106302/coronavirus-impact-index-by-industry-2020/