COVID-19 has been around for some time now and, as it, and the rules imposed on us keep evolving, pressure, especially on SME businesses owners, is high.
Many SME businesses, like other organisations, took strong immediate steps to protect their employees, customers and communities by limiting non-essential work and making the move to remote working wherever possible. Some had to shut down completely, relying on the government furlough scheme, CBILS, VAT deferral arrangements etc.
These actions were and continue to be essential, but economic worries are also critical for businesses. Many businesses have shifted their ambitions over the last several weeks/months to survival rather than growth.
You should find it encouraging that historically SMEs have been more resilient than other organisations when unexpected economic downturns have occurred. SMEs have typically been in business through multiple downturns and crises, which is the basis for their consistent long-term strategic focus.
There are three key areas where businesses might consider focussing to help brace themselves for the weeks and months ahead.
A main priority for businesses during these changing and challenging times is supporting employees. Smaller businesses are inclined to have strong employee retention and loyal staff as a result of goodwill built up over time. Clear communication and information sharing with your employees are ways to build trust and ease anxiety to loyal employees.
Financial stability in the face of an uncertain market will continue to be the main challenge facing many businesses. Fortunately, smaller businesses in particular tend to be financially conservative and debt averse. This helps to limit their exposure during economic downturns. But, low debt alone does not mean that your business will be immune from challenges that may result in enforced downsizing or business interruption.
There are several steps which businesses can take to bolster or maintain their cash flow. Government TTP arrangements, and VAT payment deferrals are just two, and if you missed the VAT payment deferral scheme, it might not be too late to request a refund
At the outset, most of us, including business owners hoped that this disruption would be only a few weeks but they now having to shift their thinking to longer-term scenarios.
Cash distributions may be impacted and even where businesses have made plans for situations where cash flow would be disrupted, business owners are advised to consider the worst-case scenario – cash flow forecasting for business owners assuming that the cash from the business dries up is strongly advised.
The implications of coronavirus on individuals and business are causing stress and strain across many areas of daily life. Business owners and their key staff are having to make business decisions to help protect employees and ensure the survival of the businesses. As the economic fallout of this crisis continues to evolve and the country is now in recession, acknowledging and reacting to challenges as quickly and efficiently as possible can help your business survive the current climate, and position itself to recover robustly once this pandemic is behind us.
For further advice, please email firstname.lastname@example.org and one of the team will be in touch.