Covid-19 – Guiding your business through its wake

Covid-19 has affected all aspects of our lives and we now find ourselves living in a world governed by uncertainty.  The effects of coronavirus have been devastating from a business perspective with the majority of firms having suffered a testing blow. Some businesses were forced to close their doors, whilst many continued but working from home but loss of income has become the concerning issue for all. With the end still not in sight, but with lockdown eased, UK firms are working hard to get their businesses back on track.  What is certain though is that no matter a business’ size or sector they will be facing a testing time for some time to come.

Many SMEs are likely to be in a crisis mode and may be making decisions which could endanger their business’ medium-term viability so Simple Secure Finance are offering some advice to businesses to help them give their businesses a good start.

Access the funding support your business needs

The Government has made available an unprecedented support package for UK businesses.  The Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loans can provide many businesses with a government backed loan scheme with no fees for the first 12 months.  Many businesses have taken up these loans but if you haven’t you need to consider if they would help your business. However, these loans must be repaid and should be factored into any future cashflow forecasts.

Manage your cashflow

Ensuring you have the cash required to ensure your business can operate is critical.

• Consider deferring your VAT and corporation tax if it gives you short term relief but consider the impact later on when these payments are due

• Make sure you have applied for business rates relief if you own a shop, leisure or hospitality business

• Make sure you invoice your customers on time and have methods in place to chase overdue payments.

• Ensure your stock levels are adjusted for any downturn in business so you are not buying unnecessarily

• Offer early payment discounts to your customers

• Renegotiate payment terms with suppliers but considering times are difficult for all and your supplier network is crucial to your business

Protect your business

Check out what insurance your business has.  Having access to a trade credit insurance can give you peace of mind should your customers be unable to pay.

Stay on top of you supply chains

You may need to plan for some disruption to the supply of products and services. If this happens you may need to scale back on some areas of your business and switching focus to parts where supply is good.  Consider looking for alternative suppliers and if importing from overseas consider countries less heavily impacted by the virus.

Don’t lose essential employees

Think before you lay off employees – business may be slow now but if you lose essential skills then you put your business at risk of not being able to capitalise on opportunities when they come.  The Governments furlough scheme should be helping cover some of the cost of your employees.  Consider a reduction in hours or pay cuts over redundancy.

Communicate

 Continue to communicate with your employees, customers, suppliers and funders.  Tell them you are open for business and make sure they are aware of any changes you have implemented – both procedural and operational so they know how to work with you.

Make some noise

Don’t stop marketing your business in a time of crisis.  Make sure you tailor your messages to the situation and address any concerns your customers may have.  Use social media and email to tell the market what you are doing.  For customers, phone them or have a zoom meeting to understand where you all are.  Make sure your messages are positive – we are all craving “normality” and people will gravitate towards this.

Take stock

Now is the time to look back on your business and take stock.  How could it have dealt with this crisis differently.  What do you need to address – new processes or systems to make you more efficient and better prepared should we find ourselves in the situation again.

 We support our client portfolio by guiding our clients through the myriad of choices open to them.  Using a trusted financial advisor will mean that they can get the right guidance and support  they need to make the right decisions for their business.  

 For more information, contact Simple Secure Finance today on 01183 246 750.