Be a Control Freak!
It may be a scary prospect to think about digging in to your finances but burying your head in the sand really wont help! The quicker you get your head around what’s coming in and going out of your business the easier it will be to manage going forward. It may well be that you’re already on top of this but it could be a good idea to adapt your current review points making these more frequent i.e weekly or even daily depending on your business.
Fiddle with your figures!
Yes, you heard it right – get fiddling!! There is a lot of uncertainty at the moment but the one thing we’re sure of is that for most of us the next few months will undoubtably be tough and for many us our income and expenditure will change. Gather as much information as you realistically can so that you can update your projections, this will provide you with valuable information that will inform your decisions moving forward. Having a worst case and best case scenario is helpful in understanding key points when difficult decisions may have to be made. Use this time to build really close relationships with your key customers – offering to help and being supportive will ensure that once the situation has ended your customers will have a renewed loyalty and trust with you and above all will remain a customer.
Keep the cash flowing
Keep an eye on your debtors, maintaining contact and continuing open conversations to try to encourage payment, keep in mind that your debtors may well be experiencing the same issues as you are particularly if they’re a small business or self employed themselves. Consider agreeing revised payment dates or putting instalment plans in place where a debtor is struggling to pay. If you’re struggling to make payments on time talk to your creditors – they may be able to help you so be open with them as soon as you’re aware you have a problem.
Time to cutback
Now is definitely the time to think carefully about our outgoings – that should be in the business and at home. List your expenses and consider how vital they are to being able to continue – are there any that aren’t deemed essential? Could they be reduced or stopped altogether? (without legal implications of course)
If you rent office space speak to your landlord about a mortgage holiday or rescheduling payments to later in the year when the crisis has passed.
If you have a mortgage you may be eligible for a three month payment holiday – talk to your lender to find out more and if you have any additional borrowings that you’re worried about speak with your lender immediately.
Be open and realistic with your team so they fully understand the situation. Consider any implications on staffing the coronavirus may have and keep your team aware of how this could affect them. Look at what support there is for businesses to reduce redundancies i.e government to cover 80% of salaries up to £2500, remember covering staff costs now may be hard but once you’re back up and running your key staff will be critical to rebuilding your business.
Your business has most likely already or very shortly will be adopting new ways of working . Make sure you have implemented effective communication channels and schedule regular team catch ups so everyone stays motivated and on track.
Grow your mind
Use any spare time you may have i.e travel time which is now free to develop new skills that will help your business. Think about any skills gaps within your team and do a little research as to what could be available – there are lots of free resources available, including the free IOEE toolkit
It may feel like the last thing you feel like doing but these new skills and abilities will help your business to recover and grow once coronavirus has subsided.
Mentoring is one of the most powerful forms of support for a small business. This could be very informal i.e chatting at the pub or this could be a formally managed mentoring programme such as the programme we coordinate on behalf of UK Finance. Our members can access mentor support through the IOEE mentor directory in our online campus or you may wish to access a mentor through a regional mentoring organisation – you can search quality assured mentoring organisations at mentorsme.co.uk
There are a range of government measures available to small businesses ( with more to come we hope!) here’s an overview of the current measures;
- a Coronavirus Job Retention Scheme
- deferring VAT and Income Tax payments
- statutory sick pay relief package for small and medium-sized enterprises (SMEs)
- a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
- small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
- the Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance
- a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
- the HMRC Time To Pay Scheme to help with tax
Stay up to date with new announcements ad how these could affect you by visiting the HMRC site regularly – the address https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19