As the government eases the Covid-19 lockdown restrictions to get the economy moving, more and more businesses are drawing up plans to go back to work. Having survived this far, it’s a question of what to do to get open for business.
Numerous businesses have displayed an entrepreneurial side. Sometimes, the response has been straightforward, with restaurants that cannot open to diners focussing on a take-away/deliver offer, for example. Others have been innovative, such as repurposing their machinery and facilities to manufacture personal protective equipment (PPE) for frontline NHS and care workers.
Over the past few weeks, employers have been taking a long, hard look at their offering. To recover from the challenges posed by the Coronavirus outbreak it’s important to weigh up whether your offering will still meet customer needs once we settle into the ‘new normal’.
Stage 1: Recovery
So, how do you plan to drive your company forward in the coming months? It’s not only a case of how to bounce back from reduced levels of business due to coronavirus, but also how to maintain that momentum or, preferably, how to grow sales, with the economy sliding into recession.
Our habits have changed during lockdown. More and more of us have become accustomed to doing things online, from the weekly grocery shop and ‘meeting up’ with friends to virtual exercise classes. In the fullness of time, will we just go back to our old routines? Few commentators think this is likely. So, if your business is going to thrive, it’s vital to think about the changes you could make.
How could you improve your existing range of products or services? What new products or services could you offer? How about tapping into new markets? Could you, for instance, embrace the world of e-commerce and sell online?
If you decide to institute wholesale changes to what you make or do, a word of caution. Seek professional advice where necessary to examine the opportunity cost of failing. Can you afford to make a huge commitment only to lose money? Don’t dismiss market research to really understand what your customers want now.
Businesses that have been able to remain open should certainly be reviewing their working practices. The consensus is that many employers have been pleasantly surprised at how well their staff have adapted to working from home. The big question now is, do you really need everyone to come into the office all day, five days a week?
You may well reach the conclusion that productivity and good customer service are achievable if staff sometimes work from home. Striking a happy work/life balance will be uppermost in our minds over the coming months. Perhaps more people would like to work part-time?
You might also question whether you need as much office space as you currently occupy. Before changing the way you work or moving to smaller premises, it’s worth finding out how much each desk ‘costs’ your business. One SME has calculated that, when everything is taken into consideration, including overheads, travel, IT support, HR, tea and coffee, etc, each desk costs about £5,000 a year. Your accountant can help with this kind of review to inform the decision-making process.
Of course, reopening your business means having a plan for the long term. It’s essential to look beyond the recovery phase and determine what steps you are going to take to ensure resilience.
Stage 2: Resilience
To whether any storm, as many businesses have found to their cost during the pandemic, you need cash – and more than will see you through a couple of months. Expect the unexpected and start building up a cash reserve. It won’t necessarily be easy, so work with your accountant or financial adviser to create a realistic savings plan.
Equally, it’s important to keep as much of the cash you’re generating as possible, so a review of expenses to reduce outgoings is a must to keep your business lean.
Don’t leave it to chance – put in place a business continuity plan. This allows you to face up to the worst-case scenario. Planning potential solutions will help you to cope with, and overcome, a series of major challenges. Nobody has all the answers, of course, so seek advice from your accountant. Don’t forget to ask your team for input, too. As the Covid-19 pandemic has revealed, a business doesn’t have to do anything wrong to get into difficulties, but having a strategy will help you find a way through them.
Check out grants and incentives to help move your business to move the next level and take advantage of business tax credits and opportunities to defer payment of taxes. HM Revenue & Customs will allow you to defer payment of VAT, for example, but don’t just forget about it. You will still have to pay it, so draw up a plan. Similarly, if an enquiry reveals that you owe tax, talk to your accountant and make arrangements to pay to avoid costly penalties.
If you’ve taken out any kind of loan to tide your business over, make sure you understand the terms and your obligations. You may not have to pay it back straight away but stay on top of it. It defeated the object of the exercise if you end up paying out in extra interest or penalties for missed payments. If you’re experiencing difficulties paying back a loan, tell your lender and work with them, and your accountant, to draw up a payment plan.
At each stage it’s vital to keep communicating. Talk to your employees to clarify how and when those who have been furloughed will return. It will give them confidence to understand what measures you are implementing to ensure their safety. And maintain a dialogue with your customer base. They need to know if you are changing your work practices and to what extent this will affect them.
For advice on reopening your business call us on 01785 243276.