If you’re a small business owner, you might be feeling particularly overwhelmed at the moment, trying to figure out what the Coronavirus pandemic means for you and your business.
You’re certainly not alone. Many small businesses are vulnerable and business owners are facing difficult decisions, with real concerns about how their businesses will survive this unforeseen and unpredictable crisis.
39% of small and medium-sized businesses have either already closed down temporarily or are planning to do so within next month. But, as the lifeblood of the economy, it’s essential that the UK’s small businesses survive and go on to thrive once again.
We’ve rounded up some practical tips, advice and resources to help you shield your business as much as possible during this unprecedented time.
1. Review and manage your cashflow and processes
Keeping liquidity within the business has always been important.
But, it’s vital now.
During this time, consider what impact various scenarios might have on your business, such as:
- Customers paying more slowly
- Bad debts
- Fewer new customers
- Risk of clients moving to lower-priced competitors
- Customers asking for lower prices because their own profits have been hit
You can get ahead of the risks associated with these by ensuring your cashflow and processes are in check.
First off, you could consider some of the below to ease pressure on your cashflow:
- Renegotiating payment terms with your suppliers
- Offering discounts to debtors in exchange for early payment
- Cutting all non-essential payments – magazine subscriptions, for example
- Making efficiencies to your overhead functions - HR, IT etc.
During this uncertain time, one thing you can be sure of is that the situation is continually evolving.
Keeping a close eye on your cashflow and management accounts ensures you are clear on where your business stands at any given moment. Armed with this knowledge, you can quickly find any areas where you might be exposed to risk, and evaluate the options available to you to help keep your business in the strongest position possible.
We created a 13-week cash flow forecast to help you plan out different scenarios and look at the best solutions for your business - download the template here. Once you’ve filled in the forecast, keep on top of it with regular reviews so you can take action should issues come up.
2. Make use of the schemes on offer from the Government
There are various forms of support available from the Government. Below is a list of the current measures, along with resources and links to guide you to further information.
Sands are still shifting, so if you’re finding it tricky to keep on top of the latest developments and identify the schemes that could immediately result in survival rather than collapse, your accountant will be able to help identify which ones apply to you and your business, and help outwith any application processes.
- Coronavirus Job Retention Scheme - click here to find further details on what we know so far, along with some FAQs.
- Coronavirus Self-employment Income Support Scheme - in the ‘Download Resources’ section below, you’ll find a factsheet which details our current understanding.
- Small Business Grant Scheme – this link provides details about who is eligible and how to access it.
- Cash grants and business rates holidays for retail, hospitality and leisure businesses – if your business is in this sector, more information about the support available can be found here.
As well as evaluating your eligibility for Government support, review your insurance policies to see if you can claim for any financial losses through them.
3. Consider diversification
Look at your current business model, consider how people’s routines have changed and how this might impact your future. Can you identify any diversification opportunities?
For example, if you own a restaurant, could you create a takeaway menu? Perhaps you run a convenience store that could offer home deliveries?
You’ll also need to think about whether any of your regular supply chains will get disrupted. Are there any new supply partners you could work with, or are there any areas of your business which may need to be scaled back or temporarily paused?
If you’re looking for someone to talk to about your options, drop us a message and we can put you in touch with a specialist advisor.
4. Call on help from your wider network
On that note, accountants often have a wide network of experts they can recommend, for example HR advice if you’re furloughing staff, a solicitor for legal advice if you have any contractual queries or marketing advisors to help raise your profile.
Your accountant will likely have a list of approved suppliers for all core business functions, so don’t be shy about asking.
5. Plan for the medium and long term
It could be some time until ‘business as usual’ resumes. Once you’ve implemented emergency measures and you feel your business operations are under control, make time to plan for the medium and longer term.
- If possible, start building a financial buffer.Once the current peak of Coronavirus cases has subsided, it’s likely it will re-surge once again as the current lockdown restrictions are relaxed, so you need to be prepared for a potential second wave.
- Re-evaluate your objectives with the changed landscape and market in mind. Using our SOAR methodology could help you to make structured decisions, rather than relying on gut feel.
- Have open conversations with your partners, suppliers and vendors about how you can work together to protect your businesses in the future.
- Take time to work on yourself and your business, considering where you are currently and where you want to be. Could your business benefit from any new skills,either your own or those of your team members? During this enforced period of reduced business, use the freed-up time to invest in your own and your team’s development.
There is no denying it’s a tough time for the UK’s small businesses, but tough times also bring opportunities for those brave enough to face them. Knowledge is power, so being clear on what all this means for you is critical and gives you a starting point for tackling the next phase.
Remember, our team is your team. If we can support you in any way, please get in touch and we'll do our very best for you.