When hard times hit, a prudent approach and creativity is needed

The tremors of COVID-19 began to be felt in February this year and it was then the directors at Carbon8, Peter Musarra and Kenneth Beck, began to formulate a strategy to act early to give their Sydney print business the best chance of survival with all indications pointing to rapidly declining revenue in the months ahead.

“An open line of transparent communication from the start was key,” Musarra told Sprinter.

“So Ken and I immediately began having conversations with all the key groups that are essential to their operation – staff, clients, suppliers, banks and our landlord.”

They also surrounded themselves with trusted and capable people for advice, support and action.

The conversations themselves were not a directive but a two-way street designed to achieve the best outcome for all parties given the critical circumstance of the unprecedented global health and economic crisis that was rapidly developing.

“You cannot demand anything in this environment. You have to be rational and ask and negotiate,” Musarra said.

“Events were being cancelled on a daily basis, hospitality and tourism industries shutting down, and decline across the board, with no certainty when this crisis will end.”

Musarra believes it was prudent to begin immediate communication and request a clear response in return.

“It was prudent to communicate immediately from a fair and equitable standpoint with each of these essential groups and it was very important to get onto this early. Asking for assistance needs to be communicated as clearly as possible,” Musarra said.

“We requested a clear response from each of these groups in return. By making our position and plan clear we were able to get a swift and quantifiable offer of assistance given the situation.”

Being upfront and honest in communication has always worked in the positive for Carbon8.

“Those groups were all immediately supportive, and even commended us for being prudent in communicating early in the way that we did, from banks, to suppliers, clients and our landlord. Assistance is varied, but the key to it has been our long-standing history and strong relationships. Some blue chip clients were happy to assist because of their position to assist, for instance by paying early. Although some are asking for an extension of payment terms to be paying later, and to many we give it,” Musarra said.

But Musarra wants to make it clear that there is no blanket rule for this communication, as each group requires a different approach.

“There are tiers within those groups that need a certain negotiation and agreement but despite all those supportive responses, no matter who you are, there will be damage and there will be a brutal realisation of cost of that amortising and funding,” Musarra said.

“The reality is there is going to be cost and there will be far greater cost to some and there will be some that will not survive this, that will also be the brutal reality. I think if you already have a record of being in significant financial stress or you are highly leveraged or geared that is going to be a very difficult position to negotiate from or see through on the other side.”

Despite suffering a significant reduction in work coming through the door, Carbon8 is committed to staying open, retaining as many staff as possible and trading through this crisis in the most creative way possible.

The federal government stimulus, most notably the fresh announcement of a planned JobKeeper $1500 a fortnight wage subsidy for employees in businesses that have suffered a 30 per cent downturn in revenue due to the virus looks to be a more effective to process benefits through the business as opposed to Centrelink that has been overwhelmed with JobSeeker.

“We will use every resource and incentive available to maintain as many of our employees as possible in employment until this new normal is found on the other side,” Musarra said.

“The JobKeeper scheme in its initial form offers a subsidy to employee salaries and it will definitely assist people keeping their jobs longer and support their income streams over and above what would have happened through the JobSeeker payment so that is a move in the right direction.

“What is unclear is the absolute final detail of it and eligibility. It is now moving through Parliament and the terms and conditions are changing as we go. What defines a 30 per cent downturn and what are the tax implications? The shortfall will need to be made up if people work beyond that $1500 subsidy and then there is the idea that staff can still receive the subsidy if they are not working. Either way it is going to help incentivise businesses to keep staff and get faster payment to those that would otherwise not be eligible to receive something through Job Seeker, so it is certainly a benefit.”

The COVID-19 situation is changing on a daily basis with new restrictions coming in regularly aimed at stopping the infection rate of the virus and new economic stimulus to keep the country moving.

Musarra said, likewise, Carbon8 will continue to be innovative and flexible in its approach to business and the revenue streams it can find to keep the engines turning and its people employed until these difficult times pass.

“We are continuing to serve all orders large and small to the standards our clients have become accustom,” he said.

Carbon8 are renowned for our resourcefulness and creativity, forever developing and producing all manners of new innovative and bespoke products.

“Thinking on our feet we collaborated with our brilliant team to brainstorm what products we could produce in response to the crisis and to fill the hole of declining work volumes,” Musarra said.

“The obvious safety print collateral, home office products and others, and then we honed in on the severe medical supply shortage. Our resident  industrial designer, Daniel Sutherland, crafted some prototypes of much needed safety equipment and we quickly repurposed our factory to produce multiple products that we are now already manufacturing and supplying to multiple sectors.

“This is being done without any measure of us looking to profiteer as we are just trying to do something that assists the health crisis in dire need and also helps us continue to employ our staff.

“We were ahead of the curve and started this initiative weeks ago, ahead of the government reaching out formally to the industry for urgent help.  We realised there was an ability for a factory like ours to be repurposed as well as continue employment for our staff. We’ve had a great response and the product offering and the ability for us to supply those products are already there and are happening.”

In the meantime the team at Carbon8 will keep coming up with new ideas and innovations to see their way through this crisis, strengthen existing rationships and forge new ones.

“We are used to this level of intensity, however this will take every ounce of energy and brainpower. We are spending our days and nights working through the solutions in a measured approach to be resourceful and clear in amortising our way through this,” Musarra said.

Comment below to have your say on this story.

If you have a news story or tip-off, get in touch at [email protected]  

Sign up to the Sprinter newsletter

One thought on “When hard times hit, a prudent approach and creativity is needed

Leave a comment:

Your email address will not be published. All fields are required

Advertisement

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.
Advertisement