Post-Lockdown Business Inventory
2020 has so far proved to be the most unbelievably challenging year for most small businesses and it seems this will continue into the months ahead. As we slowly move towards loosening of lock-down regulations and a return to some kind of business normality, this seems like a good time to take a little inventory and look at what support you have in place and what you can do to prepare yourself for the coming months.
Here’s our recommendations of what you should take stock of in your business right now:
We doubt the Government will release any specific further support measures but Bounce Bank loans are still available. Have you checked with your bank to see if you are eligible for this? They are interest and payment free for the first year and you can pay it back at any time penalty free and the rates are considerably more favourable than a business bank loan. We don’t know how much longer they will be available so now is a good time to apply.
Self employment income support scheme - a second grant will be made available in August, with the same application process and eligibility criteria as the last. Even if you have re-opened your business you can still apply if COVID is still affecting your business on or after 14th July.
Employee Furlough Scheme
If you have had staff on furlough then you can now start bringing back employees on a part-time basis. This will not only help with your costs but also their wellbeing as many people are going to find returning to work quite a stressful process, not to mention the balance of childcare required. Taking things slowly will benefit both parties.
Here’s an overview of the latest changes to the furlough scheme:
From the 1st of July employers may return furloughed employees to work on a part time basis while still claiming the CJRS grant for the hours not worked.
For August employers will still be able to claim 80% of wages up to a cap of £2,500 but employers will have to pay the Ers Nics and pension for the furloughed hours.
For September employers will be able to claim 70% of wages up to a cap of £2,187.50 with employers paying the Ers NICS and topping up to ensure employees are paid at least 80% of wages.
For October employers will be able to claim 60% of wages up to a cap of £1,875 with employers paying the Ers NICS and topping up to ensure employees are paid at least 80% of wages.
Employers can continue to choose to top up furloughed employees wages above the 80% at their own expense. Take a look at all the updates to this scheme here.
Now is the time to look at your cash flow predictions and reduce overheads where possible. Make decisions with your head not your heart - do you really need the fancy office or can you work from home? So many businesses are deciding not to renew leases on offices having realised their businesses can work perfectly well and more cost effectively with a remote team.
What about reviewing opportunities for new working practices? Has working from home / flexible working for staff been good & can you continue to do this even after life returns to normal? This could revolutionize your business in terms of finding good staff - many can only work from home or certain hours. Don’t see it as a limitation, it’s a potentially massive opportunity.
Look at incentives rather than price drops, what extra can you offer customers, how can you incentive them to return to you? Reducing prices to generate sales may hurt you in the long run and reduce the value of your offering. But by adding value with extra service or simply going the extra mile you can win loyal customers for life, who are also less price sensitive.
Stay visible to your audience, invest carefully in marketing that will support this - now is not the time to disappear from view.
This is time to review every aspect of your business - are your suppliers & services providers working for you? Make a list of all of your outgoings & ask do I really need this? Am I getting the best deal?
Can you diversify and offer new products/ additional services? Many businesses had to be very creative with how they delivered their products during lock-down (just look at the uptake in restaurant deliveries). If you have already done this, is it something you can continue to keep a diversified income stream?
Systems & Software
Review your systems & software. Now is a good time to invest in software to streamline your work flows. If your team is continuing to work from home and your children won’t return to school until September can you find smarter ways to task manage/deliver your product to your customers? In the accountancy world we help a lot of clients move to Xero cloud based book-keeping and it saves them time and money because it's a much easier and more efficient way to work. A simple update that more than pays for itself.
We're busy helping our clients negotiate this post lock-down period and advising them how to prepare themselves financially. If you could use that kind of support from pro-active accountants like us, then get in touch. We are currently taking on new clients.