The challenges felt both personally and by businesses over the last 15 months due to Covid-19 have been unprecedented and, hopefully, will never be repeated in our lifetime.
Some businesses have thrived, some have been decimated but the majority have battled through and are now preparing for recovery. The government has provided support through grants, low cost loans and, the furlough scheme. This help is coming to an end and businesses need to prepare to stand on their own feet again.
Supply chains have changed (especially with the shortage of containers and the subsequent massive increase in shipping costs), their customer base may be different and getting credit will be more difficult making cashflow much tighter than in previous times.
Bounce Back Loans and CBILS will have to be repaid as the interest and repayment free year comes to an end, HMRC debt is now having to be repaid.
Furthermore the Furlough Scheme will start to be wound down shortly and comes to an end in September meaning that employers will then be responsible for all employee costs from that date.
Additionally, working practices have changed with many staff working from home at least part of the time.
So although these businesses have survived they have changed.
Some will have reduced markets, some will have increased market opportunity, all will have changed and need to adapt to the new “normal”.
It’s clear to see why many businesses are unrecognisable from 12 months ago.
So whilst there has been plenty of change already there is much change to come.
The good news is that with the reported efficacy of the vaccination programme businesses should have less fear about future full lockdowns happening and can now start to plan positively.
Those who plan properly now and understand the changes to their business will be in a far better position to take advantage of opportunities over the coming months.
How should the business owner plan?
Ideally, go right back to basics as if you were starting afresh. Check all your assumptions, double check numbers and revise your forecasts. In other words….
MAKE SURE YOU UNDERSTAND YOUR BUSINESS
Understand the numbers
- What is your current cash position?
- What is your monthly break-even sales figure?
- How much are your monthly overheads?
- How much are you owed by your customers?
- How much do you owe your suppliers?
- Are your HMRC payments up to date?
- Have you revised your forecasts?
- What does your predicted cash flow look like?
- Do you need additional facilities?
- Do you know how to access the recently published Government initiatives?
Understand your employees
- What are your legal responsibilities?
- What happens if key members of staff are off ill, or a member of their close family needs caring for, and so they can’t attend the office?
- Can they work effectively from home? What support can you put in place now to
help them? - Are your HR policies suitable for a situation like this or do they need updating?
Understand your key suppliers
- Has your supply chain been affected?
- Has Brexit caused you administrative issues?
- Have you spoken to suppliers to see how they have been affected?
- Do you have a “plan B” in case they fail?
- Can you work together to plan a way through the next few months?
Understand your key customers
- Are they still in business?
- Can they still meet your credit terms?
- How have their markets been affected?
- Can you fulfil their requirements if they have expanded?
- Can you get credit insurance on them?
Remember the old adage “failing to plan is planning to fail!”
If any of the above gives you cause for concern the please act NOW and call us. Don’t wait until the situation is out of your control.
HOW CAN DAVID ANNABLE HELP?
I can help you put these plans in place. I have many years of business improvement and turnaround experience and can help with cash flow advice, provide short term resource for business transformation projects, investments, profitability analysis, cost and overhead reduction, business acquisition and business sales.
