Corona Virus – Update for local business

Corona Virus – Update for local business

Well the time has come for us to work from home as per the government guidance.  Aside from being a little bit inundated with queries it’s still business as usual as far as we are concerned.  We’re getting queries from many clients along the same lines, so I’m trying send out emails to cover these queries and also update you on government action for small businesses from a financial perspective.  When it comes to medical advice, please follow the government guidance and medical professionals on this and stay safe.

I’m sure you’ll agree that this week has been pretty unprecedented.  The only time I can recall anything like the uncertainty surrounding business today is 9/11, but even then, things settled down pretty quickly from a business perspective. The government are holding daily press conferences and I’d recommending watching them for updates rather than listening to the rumour mill.  I’ve sent a couple of these e-mails now, but it seems clear that the government response for small businesses has been underwhelming. Business loans in times of such uncertainty, particularly in times of such uncertainty.  The chancellor will be making an announcement this afternoon which I will report back on this evening.  I’m hoping he goes much further in affording businesses some help.  I’ll include some information on government initiatives at the bottom of this e-mail, but for now there are steps we can take.

Crisis Management – if you have staff then consider whether they are properly briefed in what to do in the current environment, are your policies still appropriate or do they need amending? Communicate proactively. maintaining good relations with staff, customers, suppliers, lenders and other stake holders is likely to help you trade for longer under difficult circumstances and having good relations will help you get back to normal when this crisis is over.

Protect cash – this may seem obvious but cut back on discretionary spending.  If staff are on zero hours contracts, don’t be tempted to pay more than you have to. Better that they have a job when this is over, so it may seem mean, but the government is offering help to these individuals, although we’d still like to see them do more.  Don’t rush to lay staff off.  in other countries such as a Canada and New Zealand, financial help has been given to businesses but it has been on the basis that employers have not made redundancies etc. so, don ‘t panic or you may miss out if our government takes a similar approach. Ask suppliers for extended credit terms if you are still trading through this and speak to suppliers if you are not. When we come out of this, we will still need those relationships.  Speak to customers and agree payment plans where necessary.  Some guaranteed cash in is better than none.  Think very carefully before putting your own money in.  It’s bad enough to have a business fail, but to have a business fail and lose your life savings is even worse.  Explore the government initiatives to see if they are doing anything to help your business sector.

Explore other opportunities – Jobs that you wouldn’t normally look at may be a lifeline today. if your business has seen a fall in demand, then can your skills be applied in areas that are still in demand? Without wanting to sound melodramatic, it’s about survival at the moment for a lot of businesses so turning your hand to something slightly different for a short time might see you through.  So, tradesmen that normally work business to consumer for example might find opportunities to do business to business. Are there new markets your business could enter in to?

Finance – As mentioned previously, think very carefully about putting your own money into the business, or indeed borrowing where a director’s guarantee is required. However, preferential loans from lenders, or even renegotiating existing loans may well be possible. Explore all of the government help available and keep checking as government policy is changing daily.

So, these are some tips from me, but what is our government doing to help? here is a link https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses, and the highlights below:

• a Statutory Sick Pay relief package for SMEs
• a 12-month business rates holiday for all retail, hospitality and leisure 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 offering loans of up to £5 million for SMEs through the British Business Bank
• 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

More on the above can be found on the website.  As mentioned previously there will be an announcement from the chancellor later today, so keep an eye on that, or keep an eye out for my next update.

Stay safe and please feel free to pass this on to any other businesses you know that could use some of the advice.

Kind Regards,

Tony Scrase

Bristols Small Business Accountants

Tel: 0117 9235394

Mobile: 0741 5238614

E-Mail: tscrase@tsabusinessadvisors.co.uk

Web: www.tsabusinessadvisors.co.uk