If your business is in a precarious or desperate situation due to the coronavirus (Covid-19) lockdown, here are some actions you can take right now to keep you going.
1. Check to see what support you’re entitled to
Try not to panic. Billions of government funds have been set aside to support businesses and self-employed individuals through this difficult time. These include:
- Coronavirus Business Interruption Loan Scheme – a non-taxable grant for businesses to cover financial losses.
- Coronavirus Job Retention Scheme – a temporary scheme enabling businesses to ‘furlough’ staff and claim back 80% of their wages.
- Self-employment Income Support Scheme – a non-taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month.
- Business Rates Relief – a rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.
Accessing this support could make a massive difference to your financial situation so don’t do anything drastic until you’ve checked out what’s available. Further information, including eligibility, can be found on GOV.UK.
2. Consider alternative funding options
Although the Coronavirus Business Interruption Loan Scheme (CBILS) is generous and wide-ranging, there will be many businesses who will be unable to access this scheme due to the financial profile of their business PRIOR to the coronavirus pandemic.
Just because you may not be eligible for the CBILS support, does not mean that funds are not available. To see the full breadth of funding options available to you, try Informi’s Funder Finder tool. We’ll assess your situation and connect you to the right lenders for your needs.
3. Don’t pay any tax or VAT
Now, that’s not something we would normally say! HMRC has announced the deferral of both Income Tax and VAT payments for any businesses struggling with cash flow due to coronavirus.
- VAT payments due between 20 March 2020 and 30 June 2020 can be paid later on (more information on when will be available soon)
- Anyone due to pay a Self Assessment payment on account by 31 July 2020 can defer this payment until January 2021.
Support is also there via HMRC’s Time To Pay scheme which allows you to structure any tax liabilities you may owe. You can call HMRC’s dedicated helpline for help and advice: 0800 024 1222.
However, do pay your tax if you’re overdue on your 2018/19 tax return. Not only should you pay it because you’re already late, but this will also mean you’re able to apply for the Self-employment Income Support Scheme.
4. Get a handle on your cash flow
Cash flow, of course, is the number one concern for businesses right now and following the tips outlined in this blog will have a positive impact on your cash flow position. If you’re not already doing so, you can make your life a lot easier by plugging your numbers into dedicated cash flow software.
In order to support businesses during this difficult time, Futrli are offering free access to all the Pro features of their award-winning cash flow software for the next three months
Here’s a quick demo of how Futrli uses AI to bring all your numbers into one place and translate them into daily actions and real words.
https://www.youtube.com/watch?v=evAb0UykQlk&list=PLDjp9GqRZ1mlVbDYMK5-y4Rh4uibET-co
To access the limited time offer:
1. Go to Futrli
2. Register for free
3. “Upgrade to Pro” and use the code COVID_INFORMI at the checkout.
5. Look to make savings
Despite the financial support available, it’s inevitable you’ll need to look at your expenditure and make savings. A no-brainer for a lot of companies will be to take up the Coronavirus Job Retention Scheme and furlough staff members. This is clearly a much better option than having to let staff go, meaning the government will pay employee wages whilst they’re not working.
Whilst wages will be one of your biggest fixed costs, you’ll also want to review other outgoings. Look at your rent, insurance, and utility costs to see if there’s any movement there that you can negotiate. Speak to suppliers and look on the market to see what savings you can potentially make. For example, using a site like TopCashback to switch broadband provider could save you money on your bills and also generate cashback in the process.
Make sure your advertising campaigns are switched off and pause non-essential activities (check your direct debits and standing orders!). Spend only what is business-critical. Another way of saving money is being proactive with spending, using a free business bank account.
6. Improve efficiencies
This should be a goal at any time but often we don’t have the time to review our processes and systems. Now could be your chance. And every small improvement could make a big difference.
We’ve noted how cash flow forecasting software can assist you, but think about other ways you can potentially work more effectively.
Ensuring you’re properly equipped to work from home is obviously integral to the current situation. However, also consider how technology could help you to work smarter not harder.
For example:
- Maximising accounting software for your credit control and invoicing process.
- Automating your marketing and social media activity.
- Utilising communication and collaboration tools.
Undoubtedly, there will be ways you can improve. If we can look to the positives in the current situation, it has forced us all to adapt and revealed new ways of working we maybe hadn’t considered before.
