What does it take to make your business fit for the present and future?

Resilience not only shields firms from adversity, but allows them to adapt swiftly to unforeseen challenges, ensuring continuity and growth even in uncertain times.

Alongside changes in consumer demand and working patterns and the drag of inflation, the coming year will throw up operational and financial strains for company owners and management teams not least including refinancing challenges, pressures on working capital and stakeholder demands, including HMRC.

TheBusinessDesk.com’s Building Resilience seminar, sponsored by The Institute for Turnaround (IFT), explored many aspects of business resilience adaptation and transformation.

These topics were tackled by a panel of experts chaired by TheBusiness.com Yorkshire editor, Andrew Staples.

On the panel were Bridie Robinson, business support director at Lloyds Banking Group, Kelly Jones, transformation director at New Potential and an accredited member of IFT, Gemma Edghill, associate director at Teneo and James Davison, partner at DLA Piper.

One question put to the panel was what is the most important thing businesses should focus on to make themselves as resilient as possible.

Edghill highlighted the importance of consolidation, using the example of a healthcare business she had assisted.

“They were really struggling from a profitability perspective,” she said. “They had 36 sites – some of those sites had three units on them but they only had enough people to fill two. So they consolidated a lot of these sites and quickly returned to profitability.

“It was short-term pain for longer-term gain. Initially there was a lot of cost involved with having to move people, but longer-term it benefited the business.”

Davison flagged up how important it is for companies to fix the roof while the sun shines.

He said he often sees clients who have missed their chance to make a transformational change to their business when they have received some additional investment or had additional borrowing capacity.

He explained: “I always say to clients, don’t miss the opportunity. If you’re looking at generating some inflow of funds, what can you use this for?

“Can you leverage that new money to deliver a proper turnaround, particularly including resetting the balance sheet alongside reshaping the business?”

Robinson identified cash flow forecasting as critical for companies. “Have you forward looked at your cash and at where the pinch points will come?” she said.

“Have you looked at the covenants which are attached to that forecasting to see if there are any points where you won’t have enough headroom and something could go wrong?

“If you don’t have robust forecasting in your business you can’t make the decisions you need to make in an educated fashion.”

Jones also stressed the importance of firms being able to look well ahead of more immediate concerns.

She added: “It does come back to having good quality forecasting, good quality people to read the forecast and to then act when it tells you something is off.

“There are so many companies where the day-to-day operations are fine. They have a good customer base, great teams and it’s a viable business.

“But there’s other things which can creep in when eyes are looking down rather than horizon scanning and that’s when danger approaches.”

Robinson highlighted why it is crucial for businesses to have effective, cohesive management boards.

She said a well run, resilient company should not just have one person making all the key decisions.

Citing an example of a struggling business board she had supported, she said: “The FD wasn’t all over the numbers, the MD wasn’t asking the questions to the FD. They were still going out and purchasing on a multi-million pound basis, without knowing the implications of how that was impacting the finance function.

“There were no non execs on the board. The owner of the company had flown out and was living abroad.

“That board was not operating effectively as a board should do and it nearly brought the business down.”

Edghill said companies must respond to potential financial problems fast.

“Once you see issues coming down the road it’s important to act quickly and see what you can do to make improvements to your cash flow,” she said.

“For example, consider measures such as consolidating operations, making sure you’re retaining monies within the business.

“When you can clearly see there’s an issue coming down the line and you’re starting to get pressure from your creditors or from HMRC it’s important that at that point you’re open with your stakeholders.”

Jones also concentrated on the significance of reacting to challenges early.

“There are many options available to businesses but it’s about reacting as early as possible,” she said. “The more proactive you are the better.

“The most common phrase in the industry unfortunately is ‘I wish I’d done this sooner.'”

Davison warned businesses against being tempted to throw “good money after bad” when they receive fresh investment.

He said: “If you’re taking in new money either from your shareholders or from your lenders and you’re looking to deploy that in the business model, are you just doing more of the same?

“Give some strategic thought as to whether your business plan is transformational enough.”