Millions of people across the world and UK are anxiously keeping tabs on the latest updates from the health authorities and an eye on the latest number of people infected with COvid-19, coronavirus. Whilst most are concerned primarily for their own health and wellbeing, business owners have major responsibilities.
Yesterday, 4 March we watched as Italy became the first European country to order the closure of schools and universities, the UK government clarified rules on when and which workers might be able to claim statutory sick pay (SSP), and we saw the first large scale business failure linked (somewhat) to the virus, as the already-struggling airline FlyBe, entered administration.
Whether you believe that everything is being blown out of proportion, or you’re self-isolating by stockpiling toilet paper and hand sanitiser; if you’re a business owner, you’ll need to be taking more precautionary steps than washing your hands.
With up to a 5th of the workforce predicted to be off ill at the height of the outbreak and the majority of people reducing the amount of time they spend out in public places (such as shops and restaurants), small businesses should boost cash flow to ride out the worst of the outbreak.
Which sectors are likely to be most affected?
The hospitality sector might be the first industry to feel the tangible effects of the precautionary steps being taken by the public, as people choose to frequent public spaces less and less, unless absolutely necessary. The cancellation of major sporting events such as some of the Six Nations rugby games and potentially some Premier League games, will have a major impact on income for pubs. These fixtures are major earners for local bars and breweries.
Similarly, restaurants, cinemas and entertainment centres will also see a noticeable reduction in footfall as patrons choose to stay at home.
Travel and tourism businesses are likely to also be at the front line of businesses most affected by Covid-19, and it won't just be the big businesses like FlyBe that are hit. Small hoteliers, tour operators and even individuals that rely on the income they earn from AirBnB, will see a reduction in bookings and likely rise in cancellations.
Businesses involved in manufacturing and relying on importing and exporting, to complete orders etc may well have been some of the first businesses outside of China to be affected as the crucial delivery of parts etc were delayed due to the closure of factories in China.
So what can businesses do?
With the knock-on effects from staff shortages, reduced sales and production line delays, small businesses in particular will need to make sure that they have a plan that ensures their cash flow remains strong and that they are able to meet all urgent creditors that fall due during the next few months. Taking measures to ensure that business can continue as normal as far as possible will also be important.
Reduce non-essential spending
If you were planning a shop refurbishment or to purchase some non-essential stock, now might be the time to keep the cash where you can see it. If you were considering, making a number of new hires into your sales team ahead of the summer, then it might be wise to think about delaying the start dates for a month or two.
Make arrangements for flexible / teleworking for staff.
Whilst this does not apply to all industries, if you can have staff work from home, set up measures to allow them to do so, either whilst they might need to self-isolate, as a precautionary step or to allow them to balance child-care with meeting work requirements.
Help your team set up their home computers / laptops to be able to access business crucial files and systems, so that they can continue to effectively do their day jobs from home, this will greatly help to reduce the overall strain on your business.
In addition, it will also be important to ensure that you have cover for business-critical team members within your existing team. Ensure that all business-critical team members are able to be covered by at least one, maybe two other team members.
Stay on top of your projections
Many small businesses are guilty of not accurately and regularly keeping tabs on their financial reporting such as their weekly and monthly cash flow budgets. Ensuring you’re on top of these over the next few months will be crucial. Carefully assess and consider income streams that might be most likely to be affected, which will reduce or delay income into your own business. Make sure you’re on top of Plan A and that you’ve also got a well thought out Plan B.
Communicate with Key Stakeholders
It will be important that you put some time into communicating honestly and openly with customers and suppliers. If you expect customers to see a delay in when they can expect to receive products or services, the earlier you can communicate this to them and manage expectations, the better the outcome for you and your future relationship with your customers.
Renegotiate payment terms with some suppliers and creditors. Similarly, consider offering discounts to customers etc in return for early or prepayment of goods and services.
Consider short-term finance options
If you’re a good creditworthy business, now might be a good time to take out a business loan to sure up cash flow within the business over the next few months. Before taking out a loan, however, make sure that it’s suitable for the circumstances. Particular things to look out for if you’re only planning on using the loan short term will be to ensure:
- You don’t get hit by early redemption fees
- You borrow enough to meet short term requirements and;
- You can afford repayments both and throughout the term of the loan.
Quick Business Loans with rebuildingsociety.com
If you’re a small or medium-size business and in need of a quick business loan, you can apply online now. Our short application process can be completed in under 10 minutes and all being well you could have the funds you need in less than a week.
Even better news, we do not charge early repayment fees, so you’re free to repay your loan at any time without penalty. Furthermore, we believe in working closely with business owners and really understanding the needs of the business, we’ll never give you an instant ‘computer says no’ answer.
Apply for a business loan of £25k + now or call us on 0113 8150 244 and speak to one of our team to see how we can help you.
