Can my business survive Covid-19?
2020 has been a year like no other. Both Coronavirus and the as yet unclear impact of Brexit impacting almost every company in the UK. However well a company plans and manages its finances such shocks to the whole business economy cause unavoidable stresses to all the businesses within it.
At the simplest level, some businesses have simply been unable to operate. Even for businesses allowed to open legally, lack of customers, raw materials or even staff in some cases mean that a business simply cannot function, or can’t function near enough to normality to be viable. However for some the case is very much more complex. Supply chain issues, distribution difficulties and concerns regarding staff welfare have caused real problems for some companies who, on paper, should find their output in real demand during this period. These events cannot have been reasonably foreseen or planned for and even those lucky enough to have six months operating costs in the bank are now looking into the abyss of month 7 onwards and wondering how to navigate the remainder of the crisis.
So if you find yourself in this situation, what can you do?
First and most importantly, don’t spend time beating yourself up. As a business owner you work hard to run a successful business and probably pride yourself on how well you do. If this crisis has impacted on your business you’re not alone and it’s very likely that you couldn’t have done anything to avoid the situation you are now in. What you need to do now is keep acting positively and moving forward to find the best solutions for you and your company.
You need to clearly define your situation. If you are at the point of worrying you have most likely already pulled together an up to date set of figures which at minimum shows your debtors and creditors with due dates and your cash at hand? This is vital whichever steps you take next.
If you are lucky, you are seeing a good cashflow situation with solvent debtors who are likely to pay you on time and plenty of time and money to meet any commitments you have. If so congratulations, keep on top of your cashflow and take action if you see changes in your situation.
In these times it is very likely however you are now seeing one of two things;
You are owed enough money to cover your debts but it looks like you may have cashflow issues.
You cannot cover the amount you owe your creditors, which include your staff salaries, landlord, finance payments, VAT/Corporation tax payments.
If that is the case, there are still options open to you.
The government has provided a variety of grants and funding assistance measures to help businesses impacted by the Coronavirus. These change on a regular basis. The Coronavirus Job Retention Scheme is no longer providing 80% of staff salaries via the provision of Furlough payments but the new three tier local system now allows different payments depending on location and industry.
Government measures also include VAT deferrals, statutory sick pay rebates and backing for the Coronavirus Business Interruption Loan Scheme (CBILS).
Additionally, for those of you who have demonstrated good trading histories, your bank may be willing to provide loans or overdraft facilities at favourable rates, and landlords and other creditors may be willing to flex payments to provide short term assistance and work with you for longer term stability.
Professional advice is key
It’s clear that as a professional advisor we would suggest seeking professional advice, but in a complex area with so much at stake we strongly recommend that you do so. Whether you speak to your accountant, your legal advisor or a company such as Westgates, getting advice from people who are experts in Finance matters including cashflow and can give up to date advice on Business Restructuring, Closure and Rescue options is key. Tackling any issues sooner rather than later generally leads to a much improved outcome for Directors and stakeholders alike.
If any of this article rings true, Westgates can provide up to date advice to ensure your business continues with the possibility of thriving.
You can contact Frazer on 01482 427175 or email info@westgates.uk to see how we can help your business beat the threat of Coronavirus.