Businesses need to act quickly and responsively if they are to survive the growing economic downturn, warns PricewaterhouseCoopers' Dan Schwarzmann.
Mr Schwarzmann, 45, is head of the accountancy firm's UK restructuring arm. His job is to provide recovery advice and, where appropriate, insolvency services to companies and individuals in financial difficulty. He has seen a significant increase in his workload over the past few months and expects this to continue.
Last week, Chancellor Alistair Darling said that Britain's economic circumstances are "arguably the worst they've been in 60 years". Furthermore, PwC economists estimate that £600 billion has been wiped of the UK's wealth since the beginning of the credit crunch last June, with a further £12 billion to £16 billion predicted to be lost in the next 12 months.
Which sectors are most risk? "Retail, construction and house-building, travel, hospitality and leisure and home improvement," says Mr Schwarzmann, who has witnessed a number of businesses go under in the past few months. "For some the only option is insolvency, but we are also seeing companies giving up too early."
According to Mr Schwarzmann, who joined the business-restructuring division in 1990, there are common traits in companies that successfully respond to the economy and those that do not.
So, how best can companies manage their way through the downturn? He says managers should be ready to act as soon as they see signs of financial distress. "Being agile at a time like this will certainly differentiate successful businesses from unsuccessful businesses. When companies are forced to look at their operation and think about restructuring, it can be a great catalyst for change."
He says companies should consider four key areas: strategy, operations, financial structure and stakeholder management.
"There is a general liquidity crisis and a slowdown at the moment. Consumers are definitely being more cautious about their discretionary spending. As a result, companies should ensure their business plans are well thought through and cater for various scenarios and, where appropriate, companies need to engage earlier and more actively with their bankers and other financial stakeholders.
"Debt funding is still available, as long as the business has a well-thought-through plan and a robust cash-flow position. Businesses need to realise that there are opportunities as well as threats at the moment.
"Good managers will act early and reduce unnecessary levels of complexity," he adds. According to Mr Schwarzmann, one of the main questions business managers should be asking themselves is: what are my competitors doing in this downturn?
"If you can manage your costs better than your competitors, you will come out of this downturn better and stronger than them. You need to anticipate how consumer buying behaviour is going to change and take advantage of that better than your competitor."
He suggests managers both manage their current key business stakeholders and identify new ones. "We would encourage businesses to strategically manage working capital, so they are able to take advantage of new opportunities. Make sure that your debt finance gives you room to manoeuvre.
"In an economic downturn you need to manage your current key stakeholders but also identify new business stakeholders and maintain positive dialogue with them."
He warns people not to rely on their experience of the 1990s recession. "It's not going to be the same as the 1990s. The stakeholders have changed. At the moment we've got a liquidity crisis, which makes it different." He says: "Many UK companies have not seen deterioration for years and have not had to change their businesses. Some businesses will fail." Nonetheless, he remains positive and advises others to do the same. "If companies now start developing an agile response, they should be able to maintain control. A proactive approach rather than a hesitant approach has got to be better."
Home is in Edgware, Middlesex. He is a member of Stanmore Synagogue.