The road to economic recovery will invite new challenges and change for businesses operating in some of Australia’s key industries. But what if the road never travelled becomes bumpier than first thought? Are you aware of and prepared to address the “early warning signs” of distress to ensure your business remains viable?

As restrictions begin to ease and parts of Australia move towards economic recovery from the initial impacts of COVID-19, new challenges and change will exist for businesses across our diversified economy. These may range from changing consumer demands and ways of doing business to variable supply chains, commodity price variations, or restrictive capital markets.

Successful businesses must be able to navigate the myriad of challenges on the road to economic recovery and ask themselves “Am I across the early warning signs or lead indicators of potential financial stress (such as macro-economic indicators like those set out below)?” Knowing of, identifying and monitoring lead indicators acts as an alarm bell to properly plan, consider and respond to unfavourable business circumstances in a more timely and effective manner in an effort to prevent business failure.

Over the next two months, we will focus in more detail on some of the lead indicators of potential distress for businesses operating in Australia’s key industries.

Early warning signs