Although Ireland is still in COVID-19 crisis mode, the majority of transport firms have availed of both bank and State support and together with the low cost of diesel, it is an opportune time to look at 10 key business issues in transport to access how well a business is positioned to face the next five years.
We expect that the newly formed Government to aid the road transport industry, and as new Taoiseach is expected to spend his way out of the recession, a second wave of this virus is almost certain to hit. Again it’s noteworthy that the best positioned and strongest firms will always survive. Listed below are a number of factors to consider:
- Business Profitability
- Cash Flow
- Business Sustainability
- Compliance/Business Risk
- Continuity/Tax Planning/Succession
- Staff and Employment Issues
- Long Term Business Value
- Long Term Business Funding
- Business Strategic Development
It is fair to say that the majority of transport firms that have availed of the various assistance levels available, have seen an improvement in cash liquidity. Those well managed businesses have also not suffered unduly in regard to profitability. Of note is an exceptional success story with a Western based Logistics Company that entered examinership prior to the crisis, exited examinership with additional staff hired recently.
With regard to business sustainability certain sectors will change/close and like a filling station on a road that is by-passed, it has to move with the times or create a niche that is so good the business will continue.
Now that Ireland is beginning to move out of this initial crisis there remains aspects of business that are high risk, with regard to continuity of supply or payment. Compliance has taken a back seat to survival over the last three months but this will raise its head again as State agencies vie for future scarce funds.
It’s fair to say that business continuity, success and tax planning were all items that were a constant concern to business owners during this crisis. Suddenly the thought of ill health was real and it was equally frightening to look at the tax implications of the next generation of family owned firms being left the business. This is an issue to consult a tax expert.
In this crisis there will be little or no movement in staff changing jobs, as there will be a 25% unemployment rate and that the Government wage support will decrease. Now is the time to address staff requirements and the pool of labour that can and are willing to retrain for transport and logistics role will be substantial. The other positive side of this crisis is the fact that logistics and transport are now seen as essential industries and hopefully spur a realisation that to sustain the industry a realistic margin and the ability to pay staff appropriately will be possible.
The final three items cover the concept of building a business that will have a realisable value and even in this crisis it’s still vitally important to look at and plan for business strategic development. If not doing this the competition will forge ahead once momentum is lost. Remember what’s said in sailing: “You cannot discover new oceans without losing sight of the shore.”