With the impact of the coronavirus pandemic growing by the day, it’s likely that few small businesses will have considered the potential impact of a large epidemic before now. Many SME’s are too busy trying to build a business and make a living to have thought about a potential pandemic impacting your ability to operate. You may not have a contingency plan prepared in advance and now aren’t sure how to proceed.
This is why, as accountants and business advisors, we want to help you consider the financial impact that this outbreak may have on your business, and provide you with some guidance on how to navigate the confusion and uncertainty facing many businesses at this time.
Talk to us
In times of crisis, we all look for help and guidance. We want you to know that we will always be on the other end of the phone and on email. If you think you may struggle in the coming weeks or have any growing concerns, please get in touch. The sooner that we are made aware of any problems, the easier it might be to solve, especially with reference to HMRC payments.
If you believe you may have to put your business up for sale, please speak to us first. This may not be your best option and you may not be able to get a good price in this current market. Be sure to speak to you accountant first, selling your business represents a major personal decision and it is essential to plan how you will maximise the net proceeds from its sale. We will be able to advise you on how to maximise the assets, value your business and help you optimise the potential from your sale.
Consider your cash flow
Let us know about any potential problems you anticipate with your cash flow. We can help you review your circumstances and direct you to the right kind of help for your business. During this time, we’d also like to offer you a free downloadable copy of our ebook ‘Happiness is a Positive Cash Flow’ which provides simple and actionable ways to manage your income and outgoings and may offer some help for your business during these challenging times. Get your free download HERE.
If you have struggled to pay your last tax bill, check out HMRC’s Time to Pay Service. All businesses in financial distress and with outstanding tax liabilities may be eligible to receive support.
The government has launched a dedicated helpline for taxpayers who are looking for advice and guidance as a result of the coronavirus outbreak, you can speak to an advisor on 0800 0159 559.
Check your insurance policies
Review any insurance policies you may have – will you, or your staff, be covered in any sickness claims?
We recently published a blog noting what help the government is currently offering to businesses during the pandemic. It includes information on the new Coronavirus Business Interruption Loan Scheme and how to proceed as an employer in the face of coronavirus.
The COVID-19: guidance for employers and businesses factsheet also advises what needs to be done if Coronavirus is suspected among any members of staff and details the financial measures that are being made available including:
- Refunds for businesses and employers required to access Statutory Sick Pay
- A 100% Business Rates retail discount for one year
- Funding support for those small businesses that pay little or no Business Rates because of Small Business Rate Relief
- The Coronavirus Business Interruption Loan Scheme
Make sure to check what help is available from your bank, what terms and conditions there are, and whether the help is currently needed. RBS, Lloyds Bank and Barclays have pledged to offer support by way of mortgage repayment holidays, temporary increases in credit card limits, waiving fees on early access to fixed savings accounts and late credit card, mortgage, and loan payments.
Be sure to contact your suppliers. Often suppliers will be in touch if they have to resort to restrictions, if this is the case then it is advised to begin investigating alternative suppliers. Supply chain issues are already threatening to derail some small businesses. Make sure you investigate the whole supply chain –you may need to ask where your UK based supplier gets their supplies from.
When cash is restricted, the temptation is to make late payments. Try not to resort to this unless absolutely necessary, your suppliers are in a similar position to you and may well be struggling with their own cash flow issues.
Late payments are already causing problems for businesses as 74% of business owners reported invoices due to be paid at the end of February had not been settled and were unlikely to be cleared before the end of March. Be sure to check your debtors, if you’re likely to get into difficulty look at agreeing different methods of payments (such as instalments).
Review business costs
Look at all costs and reduce discretionary and non-essential expenses as far as possible. Fixed costs such as wages, rent, utilities, financing costs and tax liabilities not affected by a decline in sales need to be properly managed. Look into whether some costs can be spread rather than paying in one lump sum.
Review marketing strategy
Fewer people will be spending money on anything other than essentials during this crisis and, although the current situation might lead you to want to reduce costs by rethinking your marketing strategy, now may not be the right time to stop promoting your products and services – consistency is the key to recovery.
Review mortgage payments
Banks will be lending cheaply. It may be wise to think about remortgaging. Mortgages are based on past data, which will invariably be better for these past three years – defer applying and that may mean lending based on reduced profit figures, making it more difficult to get a mortgage or a decent rate.
Keep calm and carry on
It is vital for businesses to carry on. Many businesses have decided to work from home where possible to reduce contact whilst remaining productive. If you plan to work remotely in the coming weeks, be sure to share our tips on working from home more effectively with your employees. Small and medium sized businesses employ nearly 60% of the current (historically high) number of employed people. It is therefore our responsibility to keep the country economically stable and, above all, productive.
There is no doubt that the current pandemic will change the way business and society work going forward. When the urgent part of this crisis is over, you should consider what it will change for your business, what you have learned and how to plan for any future crises.
If you’re looking for advice you can trust, Champion Health has created a Coronavirus advice tool with all the latest government advice and recommendations, as well as links to the best sources of information on the pandemic and where you can look for additional support.
Thrive Law have also set up a free online employment advice service to offer support to employers and employees: email@example.com. And daily employment law updates are being provided on their website blog.
How has the COVID-19 outbreak affected your business so far? Have you been able to get help in the places where challenges have occurred? Share your experiences and tips on how you’ve been dealing with the outbreak below in the comments or on our Linkedin page.
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