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Conflict in Ukraine - 5 immediate steps to help protect the impact of your business
The conflict in Ukraine has consequences, which spread far beyond Ukraine itself. It has impacted businesses around the world, who are facing huge new costs and supply pressures that could easily become existential. Early action is vital, and below are five steps your business should be taking immediately.
1. Revise your mid-term plans.
The conflict has triggered a step-change in inflation, reflecting a likely irreversible supply disruption across a range of industries including agri-products, energy and commodities. Interest rates are rising to levels that we have not seen for decades. You need a 3–5 year business plan that recognises and incorporates these new realities.
2. Test the downside scenarios.
The low interest rate era is ending, and businesses need to know how they would deal with much higher rates, ranging from 5-7%. Test against scenarios with a much higher cost of capital. How would your business cope? How could you access alternative capital sources like private debt and equity?
3. Focus on your cash situation.
Cash is always important, but with higher rates, it will be much more expensive. You may have done it through the pandemic, but you should urgently look again at your cost structures.
4. Expand your geographic horizon.
The conflict is disrupting your existing markets, so look beyond them. On a 5-10 year view, you need to figure out how you could do business with the fast growing markets of the future. For example, the emerging and ex-emerging economies in Asia and elsewhere.
5.Talk to your advisors.
Your operating environment is going through a dramatic change and external advice is essential to ensure you have the full picture, in terms of the challenge and the solutions. Do not forget to include your own management team in your planning.
The Nexia TRI team are ready to talk through all these steps with you. We have over 45 member firms in 39 countries, ready to assist you, contact the TRI expert in your country here.
