The coronavirus pandemic has affected us all in some way or another, but for many business owners, the impact of the lockdown has led to a significant loss of earnings.
In an attempt to rescue businesses from going under, the Chancellor of the Exchequer has pledged billions of pounds towards implementing emergency measures.
Unfortunately, not all of these measures take effect immediately, so it comes down to you as the business owner to take the right steps to ensure your business’ survival.
Get Help from the Government
To begin with, you should take a look at the assistance the government is offering as you may be eligible for any of the following:
- Cash grants of up to £25,000 including: Small Business Grant Fund; Retail, Hospitality and Leisure Grant Fund; Local Authority Discretionary Grants Fund; Self-Employed Income Support Scheme
- Claim back Statutory Sick Pay
- Business Rates Relief for Nurseries and Retail, Hospitality or Leisure.
- Wage payment relief from the Job Retention Scheme
- Deferral of VAT payments
- Deferral of Self Assessment payment
- Business Interruption Loan Scheme for SMEs and large businesses
- COVID-19 Corporate Financing Facility
Even if you are only eligible for VAT and tax deferral schemes, this can give you extra time to get your business back on track and put money aside to pay later.
Chase Up Debtors
If you work on an accrual basis, you may still have some outstanding payments from customers. Whilst it is important to keep good relationships with clients, it is also essential that you invoice and receive payment for the work you have done for larger clients who can afford to survive throughout the crisis, and continue to pay you on time.
A study from the Federation of Small Businesses (FSB) claims showed that almost two-thirds (65%) of small businesses and the self-employed had no plans to cope with threats to their business operations or supply chains.
At the time, the biggest potential risk, according to 51% of small business owners, was customers who fail to pay for services or goods.
Set Up An Emergency Fund
Unfortunately this lack of preparation meant that when the coronavirus crisis began, many businesses were at risk.
One of the best ways to prepare for emergencies in the future is to keep savings aside each month. Whilst it can be tempting to invest any extra money into something for the business, such as a new office coffee machine, a coffee machine whilst keeping everyone awake, won’t save your company should another disaster strike!
Pay Your Own Debts
Like many businesses, you may have found yourself having to rely on government support or a private loan in order to keep your business running. In order to avoid being stuck in debt later down the line with added interest, prioritise paying your debts off when possible, you don’t want these debts to cause an even bigger problem for you further down the line.
Forecast Your Cash Flow
By using historical data from your business, you can gather information about how your cash flow has been impacted by the pandemic. This can then help you to estimate your business’ future cash flow.
By utilising this information effectively, you will be able to make changes to your current budget plan to get back on track financially, and ensure you don’t spend outside of your businesses means.
Once you have reevaluated your budget plan, you can start to work out where costs can be cut. For short term cuts, you may consider cancelling unnecessary expenses such as gym memberships for staff.
Although employee benefits keep your workforce happy, most gyms are currently closed and employees would rather have their gym membership cancelled than lose their jobs due to the business failing.
For example, if you are paying for a monthly £30 gym membership for just 50 members of staff, you could save £9000 by cancelling it for just 6 months.
Reducing fuel costs can also save your business lots of money. By driving less optimally, taking longer routes and not monitoring employee’s personal use of company vehicles, you could be incurring very expensive fuel costs.
There are various ways to save money on travel, including the use of fuel cards to manage your fuel spend and vehicle tracking devices, which can provide detailed reports every time the vehicle is driven.
Continue to Work From Home
On 23 March, the UK went into lockdown, forcing many businesses to either furlough their staff or have them work from home. Despite the guidelines on the lockdown easing, it may be wise to keep your staff working from home if possible.
Bringing them back into work would mean a rise in gas, electricity and other costs that come with running an office. By working remotely for another 6 months, you could be saving anywhere between £1200 and £5000+ depending on the size of your business premises.
Seek Professional Guidance
An accountant can provide you with expert advice, that is tailored specifically to your business, on how to save money and keep running after lockdown.
At Ryans, we can guide you on how to save and make more money by identifying the problems and providing solutions. We have years of experience advising the local business community and a wealth of expertise for you to draw on.
With straightforward and in-depth advice, we can establish your current position and make informed decisions to help your business function at its best in the future.
We’re always looking to make the complex clear, so you’ll never be bamboozled by complicated accounting jargon.
If your business could use advice on how to save money after COVID-19, let’s have a chat.