As we are all too aware the current pandemic, Covid-19, has greatly influenced our lives both within the working environment and our home.
For many working from home, and possibly also homeschooling, there has been a blurring of the lines between work and life.
This has meant the old adage of ‘work to live, not live to work’ has been harder to adhere too. Now, as we focus on the return to work and the ‘new normal’, as many have begun to call it, what does this mean for you and your business?
What is clear is that some form of social distancing will remain – for how long, none of us are sure - and many businesses are adopting new ways of working within the rules.
Whilst the Government continues to have support available – including CJRS, SEISS, CBILS and BBLS – the reality of the situation is that not all businesses are going to survive.
If your customers are in isolation and cannot get to you, or you cannot deliver, or they cannot pay you, there is the reality of reduced or no sales for the next few months and even beyond, if the virus remains.
However, it is worth remembering that the situation we face is one we cannot change. What you can do is stay healthy and ensure your loved ones are too. After all, if the business closes and you are healthy you can start again. The reverse is not true.
So, here is what you need to do right now:
- Stay healthy, follow the government guidelines for you, your family, co-workers, employees and community. Work from home where you can manage administration. Make sure you download the relevant government checklist of guidance for your industry, to say that you have risk assessed and made appropriate changes to your work environment.
- Plan. What will your business look like in six months’ time? The best way to predict your future is to create it.
- Take time to look at your business with a SWOT analysis: Strengths, Weaknesses, Opportunities and Threats. Make notes, involve everyone, and brainstorm.
- Work out your expenses (including salaries) for the next six months.
- Estimate your cashflow over the next six months.
- Talk to your accountant. Without firm figures, decisions cannot be made.
- Once you have a grasp on your figures and you consider you have a viable business longer term, ask yourself if you can you survive for the next six months:
- Involve your staff in a discussion of likely trading conditions and seek their input on reducing costs and maintaining revenues.
- Review your list of products and services and eliminate those that are unprofitable or not core.
- Part company with customers who won’t pay.
- Review your debtors’ list and chase overdue invoices (where appropriate).
- Offer existing debtors extended payment terms and/or discounts.
- Agree extended payment terms with all suppliers in advance.
- Put extra effort into strengthening relationships with your most valued customers.
If your business is not viable, make sure you talk to an adviser to run through the options.
Rob Stokes is head of audit at Optimum Professional Services www.optps.co.uk