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Business Continuity Cash Plan with Brad Phillips

May 7, 2021 / 15 minutes read

In the third installment of our Business Unusual series, Principal Brad Phillips takes us through his expert advice on what to consider when looking at a business continuity plan.

I believe going forward what matters most to the survival of your business is cash. As they say “Cash is King”.  Cash is what gives a business oxygen, the more oxygen a business has the easier it is to operate.

The challenge for business in the current environment is to keep the cash flowing in whilst minimising cash leakage.  However, this also presents an opportunity for creating a “new normal” for how you operate your business.

I also believe this situation provides a great opportunity for businesses to create long-lasting relationships, which will be beneficial for your business in the future. 

I believe a key to getting through these times is to work closely alongside business owners, customers, suppliers, employees, financiers, and Inland Revenue.  All of these groups need to share in the pain of what you are going through.

The first step in putting together a business continuity cash plan is for the business owners/shareholders to either revise or put together, a personal budget and look at where they can cut their personal spending. I believe business owners have to make the first sacrifice to reduce drawings, dividends, salaries and so forth, especially so if they are expecting others to feel the pain for their business.

Secondly, you need to look at your top customers.  Identify these and understand how they have been impacted by COVID-19. 

  • What does this mean for forward work for your business – will it be cancelled, deferred or business as usual?
  • Communicate with them any supply chain issues you may be having that will impact on meeting their expectations. Communication is the key and everyone needs to be understanding. 
  • Is there any assistance you can provide your customers in helping them through?
  • What experiences can you share with them?
  • Do you need to start asking for deposits upfront before starting work?
  • Consider if you need to register a security interest on goods if they are being sold on credit
  • Follow up overdue accounts – ensure you have a debt collection process in place. Negotiate revised payment terms if customers are unable to pay on time.

Identify your key suppliers.  Similar to your key customers you need to understand the impacts on their business to determine the flow-on effect to your business. 

  • Are there issues in the supply chain that will mean you cannot meet customer expectations? If so, what alternatives do you have?
  • Consider requesting an extension to payment terms
  • If overstocked, can you return the stock and get a refund?
  • Should obsolete stock be discounted?

Talk to your financiers to renegotiate repayment terms

  • Can you go interest-only or on a repayment holiday? Thankfully, the borders are not closed for a repayment holiday!!

Look at your products and services

  • Can processes be changed to reduce re-work, errors, and wastage – get your team involved in this process
  • Are there goods or services that do not contribute to profitability that should be discontinued?
  • Can you move to having an online presence?
  • Can you easily diversify into selling other goods and services?
  • You need to start thinking innovatively if you haven't already

Assets and equipment

  • Sell any that are surplus to requirements
  • Consider deferring non-essential CAPEX as this will have one of the biggest impacts on your business

Property leases

  • Review leases to see if there is provision to reduce rent due to not having access to premises
  • Discuss with the landlord a temporary rent reduction or holiday – as a “carrot” to entice the landlord consider offering to extend the lease term
  • Do you have surplus floor space that can be sublet? 


  • Employees are a key asset of a business and I believe this is one of the last areas you look to for savings as it may impact on your reputation
  • Be careful of making kneejerk reactions to reduce staffing levels due to the level 4 lockdown as you may find in the space of a few months you need these staff back – persevere as long as you can
  • Remember that if you are altering an employee's rights or obligations you need to negotiate with the employee on this – COVID-19 does not give an employer the ability to override employment law. If you don’t negotiate you may end up with a personal grievance.
  • Consider reducing working hours, a freeze on pay increases and incentive schemes, reduce staff benefits

There are lots of overhead expenses a business has, including power, phone, internet, insurances, advertising and travel, and accommodation.  You should go through all these items of expenditure line-by-line to identify where savings can be made.

You also need to consider any Government assistance available to your business

  • Wage subsidies – have you applied? Did you include working owners?
  • Tax changes – what impact will they have on lowering your tax payments?
  • Should you defer tax payments due to the ability of interest and penalties to be remitted?
  • Government business finance guarantee scheme
  • Small Business Cashflow Loan scheme
  • Be cautious when deferring tax payments and applying for loans – these amounts need to be paid back in the future so you need to ensure there will be sufficient profitability in the business to do this

So now you have all the pieces of your cash puzzle, what do you do now?  You need to put the pieces of the puzzle together in the form of a cash forecast.  This will give you an understanding of where your business is heading from a cash perspective and if it is financially viable to implement the changes you are considering.  If it shows there is likely to be insufficient cash to continue operating then you need to undertake a further review see what other changes can be implemented.

All of the above may sound very daunting.  Don’t worry, McIntyre Dick has your back and is here to support you through these tough times.  We can work alongside you to identify areas where cash can be freed up, preparing cash forecasts, assisting in applying for additional finance or anything else to keep your business going during these times.  The Government also has your back in this situation as they have provided funding for eligible businesses to access and use for one-on-one advice for these services.  McIntyre Dick has been approved to provide this advice, and funding is available through Great South.  If you need assistance in helping put the pieces of the puzzle together then please call us.

Keep safe everyone and good luck increasing the oxygen to your business.

Brad v4

Brad Phillips


Armed with an extensive knowledge bank, Brad specialises in providing taxation services to clients in the corporate, business, and rural sectors. He also has a keen interest in valuation, asset protection, and estate planning matters.

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