Coronavirus is here and the WHO has declared it a global pandemic. Business owners must continue to monitor the impact of the coronavirus outbreak on their employees, facilities and supply chains as decisions may need to be made quickly to take account of what is a fast-changing situation.
Preparation is key
In situations like a pandemic, there are no particular safety measures or precautions that can keep your business afloat. The ability for your business to survive and continue is dependent on your business sector, possible complications in the supply chain, the state of your business balance sheet, and many other factors.
Regardless, the best advice for any company that hopes to survive this pandemic is to start preparation immediately.
Look after your employees
An obvious way pandemics affect businesses is the increase in employee absence. Your company is likely prepared for the occasional employee illness but even these anticipated sick days still cost businesses millions of pounds a year.
On the other hand, many businesses are not expecting half their staff to call in sick on the same day or for extended periods of time. This may very well happen if the pandemic sweeps through your area. Check what HMRC are going to be doing to help, after the Budget they have changed the rules on SSP and small business rate relief.
One major thing that could have an effect is whether you or your teams can work from home; do they have the right equipment and remote access to your business-critical systems? You might need to spend some time and money getting our remote access set up but this will be a critical investment if the virus spreads.
82% of businesses believe that remote working saves them money and employees have consistently shown that it works well for them. Some key questions to ask if you do go down this route are: Do your staff have the necessary equipment to take home or do you need to buy essential items like laptops for your employees so they can work from their respective homes? Are your connections secure? Do you need to create a VPN? Just as it is important to keep cash flowing, it is crucial you keep data secure and moving as well.
Cash flow will be critical
Cash flow, however, will be the single greatest concern for small businesses. Some companies will not be able to escape this; thus, the best remedy would be thorough contingency planning. As a business owner, you need to identify the biggest risks as well as possible events that will happen if cash flow should slow down even when there is still demand for payments.
Above all, ensure you understand your cash flow and balance sheet. Find out whether you can defer payments on leases, or take a loan holiday. You can contact your landlord to discuss arrangements to defer payments. Reduce any expenditure where possible, ask whether the spend is critical for the business or maybe more of a luxury.
It will help if you can plan your monthly cash flow for the next year. Try and create a few scenarios, one of which should be a worst-case. This will help you find out where you can plan to cut costs rather than making rash, on the spot decisions.
It is also important you start making relevant calls and prepare the required paperwork to defer payments even if you are not ready to act on these things at the moment. Acting now will save you from all the troubles or stress later. Another wise move is to get HMRC involved as soon as possible as they are most likely to understand your reasons for arranging a deferred payment.
Practical Cash Flow Tips
Some practical tips to look after your cash flow include:
First step: Time
Having read this article, schedule an hour to work ON instead of working IN the business today or tomorrow. Start thinking about the effect this is already having or will have, type or write down your thoughts, break those thoughts down into sections and then apply the 3 ‘Ws’ What? Why? and What If’s?
Second step: Expenditure
Revisit your past 3 months bank statements and apply the 3 ‘W’ What, Why, What If’s. Is there anywhere savings can be made?
Third step: Income
What is owed in and by when does it need to be paid by? Check to see who owes you money and see if they can pay. However, remember they may be in the same pressured situation as you. Tact and empathy should not be forgotten in this situation.
Fourth step: Delay
What area of the operations can be delayed? Can you arrange deferred payments to HMRC or to bank facilities?
Speak to your suppliers and people you owe money to. In times like this you may find they are much more helpful.
Fifth step: Plan
Now you have the information to hand you can plan your monthly cash flow for the next year. Create a few different scenarios, one of which should be a worst-case. This will help you find out where you can plan to cut costs rather than making rash, on the spot decisions.
Other ideas that can help your business are:
Keep yourself safe and informed
Stay up to date by following credible, official sources such as the World Health Organization (WHO) and Public Health England so you can respond quickly to changes that could affect you or your customers.
Stay in touch with your customers
Share important information with your customers using email, your website, social media pages or however you typically connect. Remember that you can pin important posts to the top of your social media pages for quick viewing. You might include information about the measures you’re taking to make your premises or products safe, or how you will handle customer enquiries if there are expected delivery delays.
Prepare a customer service plan
In order to be responsive and transparent with your customers during this challenging moment, prepare for incoming questions and requests. Consider drafting templated responses for your emails or set up instant-reply messages with information you expect your customers will be looking for.
Provide a list of frequently asked questions (FAQs)
You could prepare a list of responses for questions your customers are likely to ask and provide as much detail and reassurance as possible in your answers. This can be posted on your website and social media pages which is where your customers are likely to turn first.