Radio Brews News reached out to business advisory firm Nash Advisory for some general advice on how businesses should be managing the current crisis.

Kevin Han from Nash Advisory, a Melbourne-based business support and corporate advisory firm told Brews News’ The Antidote podcast that the has actively been advising privately owned companies including breweries and distilleries as they confront the current crisis.

“What we’ve found challenging over the last three weeks is that a lot of our clients are coming to us in a tough position because they’ve got to make some really challenging decisions around staffing, production, and what they need to do with their business,” he said.

Han said many directors, owners, managers and staff had invested time and money in their businesses and navigating the uncertainty caused by COVID-19 was an unprecedented challenge.

“What we’re fielding in terms of calls from our clients is really about business fundamentals.

“Cash is king at this point, how do we manage to pay our staff? How do we manage to pay our rent? What are the best levers that we can pull to get us through what could be a couple weeks, a couple months, or potentially longer?” Han said.

Listen to Kevin Han from Nash Advisory.

Full transcript:

So now moving on to our second guest, Pete, having spoken to Corey we also wanted to reach out to somebody, given so many of our listeners are going through what Corey’s going through, we wanted to just get some better advice about how businesses should be planning for now.

We reached out to Kevin Han from Nash Advisory, and they’re business advisors who are dealing with businesses going through this at the moment. I’d just like to welcome Kevin to The Antidote.

Kevin Han: Hey guys, nice to be on, thanks very much.

Matt Kirkegaard: Thank you very much.

Tell us about what you guys do as a business advisor, and what calls are you getting from your clients at the moment?

Kevin Han: We’ve been helping privately owned companies across brewers, distillers, and a whole raft of different industries for the better part of the last three or four years, and I think what we’ve found really challenging over the last three weeks, really, is a lot of our clients are now coming back to us in a really tough position because they’ve gotta make some really challenging decisions around staffing, production, and what they need to do with their business.

A lot of them have invested really heavily, they’ve built it up over a long time, and what they’re looking for is some way to navigate through the level of uncertainty that they’re seeing both in their own backyard but also across the world. What we’re fielding in terms of calls from our clients is really about business fundamentals. Cash is king at this point, how do we manage to pay our staff? How do we manage to pay our rent? What are the best levers that we can pull to get us through what could be a couple weeks, a couple months, or potentially longer?

Business advice to manage cash flow

Matt Kirkegaard: What advice are you giving them in terms of how they manage their cash?

Kevin Han: I guess it’s really interesting. The companies that we’re primarily dealing with, they’re reasonably well-established, they’re profitable, but what we’re seeing now is you’re kind of turning that on its head and you’re pivoting back to a startup or an early stage business. You really need to keep an eye on where the cash is coming in and where the cash is going out. And it’s about speaking to each of their individual suppliers and understanding which ones they’ve got a good relationship with and they can stretch those credit terms.

What we’re primarily dealing with is talking to their banks, talking to their major suppliers who may be ASX listed companies or conglomerates who’ve got the capacity to give them a little bit of headway on paying some of their bills. And then turning it on the other side is looking at where their revenue’s coming in and potentially chasing those late invoices or bills that they haven’t been paid for a while that they just thought, that’ll be fine, we’ll get it next month. But really getting on the front foot and trying to get that revenue in the door as quickly as possible.

Matt Kirkegaard: Pete, did you have anything?

Pete Mitcham: Well I guess what really hit me is that, yeah, cash is king. Particularly for the hospitality side of things, that’s the difficult part. If you’re not geared up to do takeaways and that sort of thing, is there any other way? Obviously people, from a business point of view, it’s a bit different to the individual who can draw down, take the $10 grand out of Super or whatever. I’m guessing you don’t necessarily want to pour that into your business.

Are there any other options in terms of getting that cash flow going?

Kevin Han: What we’ve been paying really close attention to is all the government stimulus packages that are coming out. Those things change day by day. Victoria’s got their own stimulus packages, Queensland put out their announcements today, obviously the Federal Government’s got their own stimulus packages as well, and so it’s making sure that, when we’re talking with each of the individual businesses, that they know what’s available, what they need to put forward, and what’s there and how quickly they can respond.

For instance, the Queensland Government today opened up their applications for their $500 million stimulus package and that’s aimed at gov support. So it’s about preparing the business and saying this is what you need to prepare, you need to have these documents ready to go and you can access this level of funding to help guide you through the next few months. And that’s a way for them to keep the doors open, keep their staff on, and then hopefully trade through to the point where things start to open up again.

The importance of conversation

Matt Kirkegaard: How important is conversation? Speaking to your landlord, speaking to your bank, speaking to your accountant, speaking to, as you said, people you own money to and the people that owe you money? What business advice do you give there?

Kevin Han: Yeah, absolutely. Often the first call that a business owner or someone will make is to their accountant to understand what’s their cash position and how long can we last? The second call that we would recommend that our clients make is to whoever the most money’s going out the door that they can flexibly rearrange, so that’s, typically if they’ve got debt in the business, their bank or their creditors.

Any of the big four banks are going to be really accommodating during this time because they recognize that it’s challenging and they understand that businesses are a long term relationship for them. If you’ve got bank managers or branch managers that you’ve got good relationships with, it’s as simple as picking up the phone and talking to them. They might not be able to help you right now, but they’ll be able to guide you in the right direction.

And what we’ve been doing is helping to facilitate some of those conversations on behalf of our clients, because as you can imagine, they’ve got 50 or 60 different people that they need to talk to, and we try to take some of that stress off of them and really get on the front foot with some of those things.

Matt Kirkegaard: For my little business I have a bookkeeper and that’s basically as sophisticated as I get. I’ve moved from having an Excel spreadsheet to run the business on.

Just explain to me the difference between an accountant and a business advisor, such as yourself.

Kevin Han: I guess your accountant’s pivotal to your business. They’re the ones that are lodging your statements, they’re the ones that you talk to on a pretty regular basis, and they’ve got you and a number of other clients that they look after.

Where someone like us would differ is, because we get involved in the company and we only have probably, we’re a small team, we’ve only got a handful of clients, so we get really deep into the detail. So we really know every invoice that’s going out, all the different suppliers, all the different revenue generating clients, and so we can help to prioritize which parts of the business and which parts of those cash flow items that you need to focus on. And therefore where you’re gonna get your best bang for your buck.

It’s not a matter of just talking to every single person, but if you’ve got limited time and you want to focus on what’s a priority, we help guide our clients to say, look, number one is talk to your landlord, they’re gonna be the most flexible and you’ll have the best luck. And then the second one is to talk to your bank, and then the third one might be talk to one of your key suppliers who has been known to extend credit terms. And because we’ve talked to 10 or 15 of our clients, we understand what they’re feeling, we can point them in the right direction.

What’s your next step

Matt Kirkegaard: For a business that’s potentially doing it very tough, what’s your advice to a business that just doesn’t know what their next step is?

Kevin Han: It’s really challenging. We’re a business as well, we’ve got ten staff that work with us, and so you really just want to make sure that you’re being as communicative as possible with your staff. At the end of the day your staff are the most important part of any business, so you want to make sure that anything you’re doing, you’re trying to keep them as up to date as possible and manage their expectations, manage their stress levels, and keep everyone informed.

If you’re really at that brink where you don’t know what’s going to happen, we’re in a fortunate position where the Federal Government’s relaxed some of the regulatory constraints around what you can and can’t do as a company director, so really it’s just a matter of navigating, how do you get through the next couple of weeks, next month? What are your options, and laying them out on the table, and making quick decisions.

You want to make sure you’re talking to the right people, whether it’s your accountant or whether it’s a lawyer or whether it’s business advisors like us, making sure you get a cross section of advice so that you can make a well informed decision.

Matt Kirkegaard: Kevin Han from Nash Advisory, thank you very much for joining us. We might stay in touch, because the thing that we’re hearing from everybody is nobody knows how long this is going to go on and it’s changing day by day, but I’d certainly like to keep in touch and see what advice you’re giving as this goes on.

Kevin Han: Yeah, absolutely. Thanks so much for having me on, guys, and all the best.

Matt Kirkegaard: Thank you, we really appreciate it.

Pete Mitcham: Thanks, Kevin.

There we are, Kevin Han, Nash Consulting.

Matt Kirkegaard: Nash Advisory, and I’ll put a link in the show notes. We’ve not no commercial relationship with them or anything, it was just, I was looking for recommendations for good business people. I figured that, very different for us on Radio Brews News to be doing that sort of stuff, but I thought there are a lot of people talking about it and maybe speak to somebody about the advice that they’re giving to a whole lot of businesses, and it seems to be very sound advice.