We do not know how deeply the effects of Covid-19 will be felt or how long for, but we do know that there are some practical steps you can take to help your business survive.
Cash is king
This is paramount and the focus is therefore, more than ever, on getting receipt of payments at the earliest opportunity, and where possible, delaying payments out. There are more options available in relation to the second point, such as:
- Monitor and change costs
- Talk to landlords and lenders about pay holidays
- Liaise with HMRC – see below.
How long will this last?
No-one knows how long this problem will go on for – two weeks or six months. We all need to plan and adapt; change what you are doing to give the business its best chance of successfully navigating this difficult period. Make sure you check:
- Your insurance cover – what protection do you have with your business continuity clauses? Seek advice for clarity and certainty
- Your contracts with customers and suppliers; this enables you to understand liability and to deal with the short term shortages. Especially consider force majeure clauses and, if necessary, take advice on how to deal with a supplier invoking one.
- Your inventory – do you need to ring-fence anything for particular customers?
Talk to and work with key stakeholders
You can share the stress that your business is experiencing by discussing your challenges with your stakeholders, who are anyone with a vested interest in your business, so will include:
- Employees; they are key to your business, so keep them involved and a key part of the strategy and make sure they feel that can offer ideas too. Make sure there is a communications plan in place
- Shareholders – will/can they offer more support?
- Lenders – can you have a pay holiday? Large lenders will be open to discussion more than ever; a failed business now offers them nothing. But some relief and time to breathe might result in a business picking itself up in the weeks and months to come. Consider alternative sources of finance – IF and ABL facilities, renegotiate overdraft facilities
- HMRC – time to pay is definitely something every business should be looking for
- Key suppliers who are a part of your journey are more likely to be supportive
- Institutional landlords will need to be flexible, so start talking. Make offers that are logical and offer hope – it will not be possible for them to find alternative tenants (or at best it will be difficult) so they are likely to want to help
- Speak to your customers and manage their expectations
- Speak to your IT providers and make sure there is a plan in case they are impacted in any way.
Can you get any Government assistance?
If you understand your rights and take appropriate steps early, there may be help out there for you; recent announcements will help many, including with:
- Business rates retail discount
- Retail, hospitality and leisure grant
- Coronavirus Business Interruption Loan Scheme
- Covid Corporate Financing Facility
- HMRC time to pay
- Statutory Sick Pay Reclamation for businesses
- One off grant of £10,000
- IR35 delay