The COVID-19 outbreak (now declared a pandemic by WHO) has already and will continue to, have a major impact on our country, affecting individuals, families and businesses as well as the wider economy.
Many businesses are feeling the strain, making this a particularly tough time for business owners. It’s not all doom and gloom though, we’re here to tell you that there are steps you can take to weather the storm.
In this year’s Budget, the government announced how they will be supporting businesses. To best protect your business, our advice is to use a combination of the government’s support and by taking certain measures of your own.
Use the available help
We advise you to take full advantage of the help made available by the government. The following announcements were made during The Budget regarding coronavirus:
- Statutory sick pay will be paid from day one of illness instead of day four
- Firms with fewer than 250 staff will be refunded for sick pay payments for two weeks
- A new HMRC team of 2000 staff is set up to handle Time to Pay arrangements as a result of Coronavirus. HMRC to waive any late payment penalties and interest as a result of Coronavirus.
- Coronavirus Business Interruption Loan Scheme – The government is launching a temporary scheme delivered by the British Business Bank to provide lenders with a guarantee of up to 80% on existing business loans up to 1.2M in value. To give lenders further confidence to provide loans to SME’s
Make a cashflow forecast
With many people choosing to stay home and isolate themselves, a decline in revenue is not just possible, but likely. This presents a very real cashflow issue.
Therefore, we strongly recommend including a cashflow forecast in your coronavirus preparations. Sticking with the analogy of weathering a storm, checking the forecast is of course, very helpful.
Make use of financial products
Cash is the lifeblood of any business. If you find your business is struggling to maintain a healthy cashflow, there are many financial products out there that can provide your business with the cash injection it needs to stay afloat.
While finance products such as credit cards, overdrafts, business loans and invoice finance may not be particularly attractive options, they can provide quick and easy solutions, alleviating much of the pressure your business faces. With so many options out there it’s important not to rush into anything, but to ensure you find a solution that’s right for your business. We have an in-house corporate finance that can help you with this if you would like our professional advice and recommendations.
Businesses are often told to be proactive rather than reactive, in a situation such as the one we find ourselves in, this is easier said than done as there are just so many unknowns and variables to contend with.
Therefore, reacting quickly to developments is of paramount importance. For example, if a restaurant or shop knows they are likely to experience a drop in footfall, they would be wise to ensure they order stock in line with this decline to ensure they aren’t overordering.
It pays to keep up to date with the latest developments so your business can react accordingly.
Check your insurance cover
Many businesses have business interruption insurance, now is the time to review your policy to understand precisely what you are and are not covered for in the event of an extended incident. Not sure what you’re looking for? We can review your policy for you.
This may not be a bad time to review your policy as a whole too, as we often find that businesses aren’t covered for their current turnover, staff and stock levels.
We are business advisors as much as we are accountants. We’re here to help support and advise you through this crisis. If you wish to discuss anything mentioned in this blog – or anything not mentioned – get in touch and we’ll call on all our knowledge and experience to help you as much as we can.