In tough times, many small businesses reach out to their accountants. But not everyone has access to professional business advice. We’ve been in touch with some of our accounting partners who shared these tips and advice for the weeks and months ahead.
1. Speak to your bank
Addressing your current and future cash flow is vital. The Government has launched some great initiatives in terms of loans and support, but a lot of these will take time to come through. If you need to support your cash flow fast, banks provide the quickest access to funds, so give yours a call. Around 40 banks and other accredited lenders are taking part in the Government’s Coronavirus Business Interruption Loan Scheme (CBILS). This offers fast access to interest-free loans for up to 12 months with no fees. The Government will guarantee 80% of the loan amount.
2. Stay updated on government initiatives
Get the official information on the latest initiatives, as well as more detailed updates on support that’s already been announced.
Key measures include:
a 12 month business rates holiday for retail, hospitality and leisure businesses
support to pay your taxes through HMRC’s Time To Pay service.
the ability to reclaim Statutory Sick Pay (SSP) relating to COVID-19
deferment of VAT and Self-Assessment payments
Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
Self-employment Income Support Scheme which allows you to claim a taxable grant worth 80% of your average trading profits for 3 months
Protection from eviction (up until 30 June) for commercial tenants who cannot pay their rent because of COVID-19.
You may also be able to cover some of your payroll costs as part of the Coronovirus Job Retention Scheme (see number 5).
If you’re struggling to understand which loans are available to you, it’s worth seeking professional advice.
3. Cut unnecessary costs — fast
Acting now to reduce expenses can make a huge difference long-term. List all of your outgoings and see if there are any that can be stopped or reduced without any penalties. Remember to check any contracts to see if you need to give notice.
4. Negotiate with suppliers and creditors
These are truly unprecedented times, and everyone is pulling together to help as much as possible. Don’t be afraid to call your suppliers, creditors or landlord and try to work out a mutually beneficial solution. You could ask for longer payment terms, negotiate a subscription freeze or ask for a temporary reduction in rent in light of COVID-19. They’ll be aware that this is a temporary situation do now will impact the long-term relationship, and are also dependent on your continued success.
5. Consider the Coronavirus Job Retention Scheme
If it looks like you might have to let employees go, check out the Government’s Coronovirus Job Retention Scheme first. Workers can be ‘furloughed’ – or given temporary leave without being made redundant. The scheme will then cover 80 per cent of their wages, up to £2,500 a month for each employee. It also covers their National Insurance and pension contributions normally paid by employers. And it’s not too late if you’ve already had to make redundancies. They can be re-employed and placed on ‘furlough’.
6. Check your insurance
Now is the time to dig out any insurance policies you have taken out and see if you can make a claim. Examples include:
Trade credit insurance (when payments you’re owed aren’t made or are delayed)
Key Person insurance (if you’re too sick to run your business)
Business Interruption insurance
Income Protection insurance
Some of these policies may only cover specific diseases, not including COVID-19, but that shouldn’t stop you from making an enquiry.
7. Embrace digital options
The offer of e-commerce and virtual services have become an essential element of many businesses. It’s not too late to get started. Companies like SquareSpace offer quick and easy templates for websites, including free trials. There are also plenty of online marketplaces you can sell products or services on, including Etsy, Amazon, or eBay. Or try tapping into local markets using Facebook Marketplace and Shpock. If you find yourself with more time on your hands, why not increase your social presence on Twitter, Instagram and LinkedIn? They’re all free to use.
8. Look for ways to pivot
Does your small businesses have the potential to adapt to the new landscape? Perhaps you can join forces with another local business and share your approach or resources. Providers of exercise classes and consultancy service are staying safe while meeting current demand with tools such as Zoom, BlueJeans and Skype. Meanwhile many pubs and restaurants are now offering a delivery service – you’ll need to let your Local Authority know if you plan to do this.
Many thanks to our friends at Boffix for their advice. If you’re looking for professional business support, search QuickBooks ProAdvisor Directory.