BUSINESS owners and leaders are being encouraged by a leading accountant to check they have covered every possible base when it comes to protecting their future.
Paul Hornby, the managing director of JF Hornby and Co has issued a 10-point to-do list which he says that, if completed, will give businesses peace of mind they have addressed many of the things they can control, as they weather to Covid-19 storm.
He says his company, which has in excess of 2,000 businesses on its books, has been inundated with calls from clients seeking advice and guidance.
“It really is a daunting time for business owners at the moment, as they deal with a shift in the economy which in terms of its speed and severity is dramatic.
“The climate at the moment is very different to what it was during the 2008 crash which was driven by the banks, or the dot.com crash of 2000, because we witnessed an immediate, overnight impact based on advice issued by the Prime Minister in light of the Covid-19 pandemic.
“For that reason, business owners - from sole traders to the leaders of significantly sized operations - had very little time to react.
“The government has taken unprecedented steps though its business support and fiscal stimulus package and that will mitigate some of the effects of the sharp downturn.
“But businesses really need to be on the ball when it comes to ensuring that they access the help available to them and being savvy about their own costs and forecasts.” Paul has put together a top 10 to do list for all business owners and managers.
1 - Check if you qualify for a Coronavirus business support grant - and if you do, apply today.
There has been a change in policy which means that in most cases, businesses have to actively apply for a grant. It was previously said local authorities would contact you.There are two grant schemes, the Small Business Grants Fund (SBGF) which awards grants of £10k and the Retail, Hospitality and Leisure Grant Fund (RHLGF) which is handing out grants of £25k. You need to contact your local authority to progress your application. It is quick, easy and simple to do.
2 - Explore the government’s furlough scheme
The Government has put in place a scheme which allows employers to furlough staff if there is no work for them in the business due to the Coronavirus outbreak. This measure was introduced to ensure businesses did not have to lay off staff. Chancellor Rishi Sunak announced the government would meet 80% of furloughed staff salaries between March and the end of May. Companies may top up the amount if they wish. The portal through which monies will be claimed back is not yet live. If you have not considered whether this scheme may apply to your business, it should certainly be on your list of priorities.
3 - Check your insurance policy.
If you have a business insurance policy, as many companies will, it is certainly worth checking the terms of your cover to see if there is a clause which offers you protection in the event of business interruption.It may be, for example, that you can make a claim on the basis you are no longer able to use your premises due to the government’s instructions regarding remote working, social isolation and more recently the lockdown. Call your insurer or insurance broker if you have any questions.
4 - Take a fine tooth comb to your accounts
For many businesses, every penny counts at the moment, so it makes sense to invest some time in having a close look at your outgoings.Make a list of everything which is essential to the constitution and effective running of your business, and then categorise the rest based on how important they really are to the continuing success - or perhaps the survival - of your business. You may be surprised at some of the payments which leave your account every month.
5 - If you are really struggling, speak to your suppliers
Many businesses are struggling, so this is a tough one. But if cash flow is a challenge at the moment, it may be that some of your suppliers can offer you extended payment terms, or even a payment break. Of course those bills will catch up with you at some point in the future, so it’s important to include them in your forecast expenditure later down the line.But deferral of certain payments right now might be a life saver.
6 - Take advantage of VAT breaks
The government has announced that VAT payments due between March 20 and June 30 may be deferred to a later date to help companies which may be experiencing cash flow issues. Consider using a deferral for a temporary cash flow boost - but remember you will still have to pay the bill later down the line. If you pay by direct debit and wish to defer, you must cancel the mandate with your bank.The government has also introduced a Time To Pay (TTP) scheme in relation to VAT, PAYE and corporation tax. It allows for debt to be paid back in monthly installments. There’s more information on the HMRC website.
7 - Chase outstanding debts
It’s a tough job at the best of times, and it just got a whole lot harder due to the coronavirus and the impact it has had on so many businesses.But contacting businesses or individuals who have outstanding payments due to your business could make a real difference and is a perfectly acceptable thing to do.Not all businesses and individuals have been affected to the same degree. And for some the CV-19 pandemic has actually led to an increase in revenues.So be sensitive and understanding in your approach - but equally make it clear that your business needs to be paid for services already delivered.
8 - Access government-backed loans
Businesses which were in perfectly good financial health just a matter of weeks ago are now finding themselves in a position where their money may run out before this crisis is over.The government sought to address this by introducing a loan scheme. They will provide a grant payment to cover interest and initial fees for 12 months and will guarantee 80% of the loan. The scheme is open to SMEs along with the self-employed, sole traders, freelancers and limited partnerships.Again, remember the money has to be rapid - and beware of sky high interest rates which it is widely being reported some banks are trying to charge. It is prudent to approach your own bank as the first port of call. There’s more information here https://www.businesssupport.gov.uk/
9 - Speak to your clients
It’s really important that you maintain the flow of communication with your clients - and that you use all available channels to do that.It may be that your business has been completely shut down due to CV-19 - or that it is having to operate in different ways.Whatever the status, keeping in touch and understanding the position of your customers is really important.Of equal importance is informing them what the status of your business is; if you are operating, how you are operating and how they can get in touch with you. Consider using social media, mail shots, newsletters - and of course direct contact via telephone.
10 - Think positive thoughts
There is so much to contend with right now. Worrying about the health of loved ones, taking care of your own physical and mental health, wondering if business will ever return to normal…So remember this. If you built, created, managed or owned a great business before all of this happened, there is hope on the horizon and light at the end of the tunnel.There will be another side. As a nation, we will get through this. And there is no reason why, when that happens, your business, with hard work and commitment, cannot be as amazing as it was before.