As a business owner, business survival is what matters right now.
Like so many others, your big questions probably are:
- When will the Government support arrive?
- Will it be enough?
- When will things get back to normal?
- How much work will be needed just to get back to where you were before this happened?
- And … is it worth it?
In other words, what are the practical implications of the business closure and the government’s assistance packages?
These series of posts are not designed to go over what the packages are. There is plenty of information about this out there (and you can find those links here if you need them).
All government help is welcomed. However, business owners need to plan ahead. Although you can get reimbursed for some furloughed employee costs and you may get possible rates relief or local Council grants (if you qualify), remember that historical tax bills are only deferred, the fixed costs like rent, utilities, other wages (such as your own!) and historic creditors are still accruing and must be paid at some point.
If you apply for the business interruption loans, although they may be payment free now, there is still interest to add after the first year and the money has to be paid back.
Any business is going to suffer when 25% or more of annual turnover is removed. However, the biggest impact may yet be after the dust has settled. For many, unfortunately, business “as usual” will not immediately return after the lockdown finishes. There will be demands on your cash for a number of months to come.
As business recovery specialists our advice is you MUST prepare cashflows and profit forecasts to work out when the crunch points will be (so you can start thinking what you will do at that time) and to estimate what your business will look like after this crisis is over. So we strongly recommend if you have not already started that you engage with your accountant and/or other business advisors and start planning.
We will issue a few pointers as we move forward to keep you focused on what is important and to make sure you do not fall out of the frying pan into the proverbial fire.
If you can survive then maybe you can thrive
The key behind both survival in the short and medium term, and then thriving in the longer term is going to be all about cash. Cash is and always has been king.
We are here to help, supporting your accountant and advisors with our specialist knowledge. If necessary, there are statutory mechanisms to delay payments to creditors. Together we can help you survive without falling foul of the legal pitfalls and later ramifications of getting it wrong.
Stay safe and keep the fight going.