When the pandemic hit, AVCOM made all the right moves. They brought down their costs, made a plan, and then started building up a new area of business. The eight-person leadership team had weekly access to financial data as they made each business decision. Read on to find out how AVCOM weathered the storm.
- Creative and technical production
- Based in Dublin 10
- 4 decades of experience
- 100 fulltime and freelancers
- Beyond client since 2018
Hitting the reset button has given AVCOM new strength
AVCOM has built a sterling reputation providing creative and technical solutions to the events industry, supporting some of Ireland’s leading events with expert teams and equipment such as audio-visual, staging, and lighting.
At the beginning of 2020, after a record-breaking year, they were just settling into the swing of a new events season. There was a strong pipeline of work, everything was looking very positive, and the team was ready to deliver another great year of results. Then the global pandemic took hold and their industry ground to a halt.
The first sign that things might not be going according to plan were phone calls from international events organisers who were worried that a virus moving across the world could affect their events. While the significance of happening was still not known, AVCOM told its staff that some events might be in flux and there could be some disruption coming.
“Then, on 10th March, we saw Leo Varadkar talking from Washington, DC, with his “I need to talk to you about coronavirus” speech. He announced that events were being cancelled with immediate effect. Our phones and emails started to light up immediately with cancellations. The following day, Friday, we had to put 60% of our staff on temporary layoff as we navigated our way through what was happening.” – Paul Murphy, Managing Director
Initially, AVCOM was looking at losing its April and May season. The summer is traditionally quiet, so back in March 2020, the expectation was that anything postponed would simply be pushed back and the team should gear up for a busy period after the holidays. At that point, a September restart was the worst-case scenario.
The remaining staff and directors took a mix of salary cuts and short time while AVCOM regrouped. Financial management was the priority: the company froze spending, negotiated a rent reduction, engaged with the bank for loans and repayment arrangements, deferred its rates, and applied for the wage subsidy scheme. While staying on top of costs, they also chased up outstanding invoices.
“Back in 2019, Rory had advised us to use Futrli for our forecasting. It syncs with Xero, of course, and this meant that our forecasts were updated as the situation evolved. It was invaluable to us as we were using this to keep a close eye on our cash flow projections. Everyone on the leadership team had access to this up-to-date information and when we met weekly it meant we could make effective decisions.” – Cairbre O’Shea, General Manager
We advised AVCOM to engage with Enterprise Ireland. This gave them access to mentoring, training, and funding opportunities. The first support they accessed was the Covid-19 Business Financial Planning Grant, which enabled us to work with them on their financial strategy and produce the statements, plans, and documentation they would need for other support applications.
AVCOM applied for the Sustaining Enterprise Fund (SEF), which was finally awarded at the end of the year. By that time, AVCOM had refocused on its virtual events service, with production studios in UCD and Croke Park and their sales office converted into a remote master control room. It was an intensive period of testing technologies, research and development, marketing, and educating clients.
“While it’s true that we implemented a purchasing freeze at the beginning of restrictions, there were two areas where we kept investing. One was the education and training of the leadership team, because we didn’t want to lose our momentum in driving change. The other was marketing, because it was important that we keep getting the message out to our clients that we were open and had solutions.” – Cairbre O’Shea, General Manager
AVCOM followed advice from various sources, including ourselves: bring down costs and apply for all the soft loans, grants, and schemes you qualify for. As they are often the largest cost in a business, this may also mean cutting employee numbers. AVCOM decided to make a few of its employees redundant last year, as the projections showed that the business wouldn’t bounce back to 2019 levels immediately. The others, who have been on the PUP support scheme, will start coming back in 2021.
“I feel we were quite fortunate in that many of our leadership team had weathered the last recession. It gave us the experience and confidence to deal with the crisis. The pandemic has been catastrophic for businesses, but it also gave us the chance to hit the reset button and do all that housekeeping that we’ve been putting on the long finger. Last year, we also made financial changes like introducing a deposit strategy and phasing out invoice discounting. We had already started updating some of our processes and documentation, plus moving to the cloud also made things more transparent within the business. I’m immensely proud of how we’ve managed our cash flow and what we’ve achieved during this period.” – Paul Murphy, Managing Director
AVCOM’s investment in itself has paid off because its leaders had a clear vision of what they were doing thanks to having such a good handle on their finances. They chose to find opportunity in the situation rather than view it as a threat. They now have a strong offer for virtual and hybrid events – which are definitely going to become the norm in the future – and have successfully repositioned to target a higher-end market, which will improve profitability.
Rather than sit on their hands and wait for restrictions to end, AVCOM gave us a perfect example of proactive financial management. They were one of the first companies in the country to offer an end-to-end solution for virtual events. Instead of closing their doors, they were out winning new contracts and adding an important new revenue stream that will be part of their business model long after the pandemic is over.
What I find interesting about AVCOM’s approach is that the implementation and use of Futrli was led by Cairbre even though his role is on the operations side of the business rather than the finance side. His example shows that understanding the finances shouldn’t be seen as “not my job” and that everyone in a management role can and should learn these business-critical concepts.
AVCOM has created a culture in which questioning the status quo and wondering if there is a better way to do things is welcomed and acted on. Deciding to streamline their systems and processes, AVCOM turned to cloud solutions like Xero and with one leap made real-time financial data accessible to the leadership team. This was the foundation of their decision-making process.