What options do I have for help?
There are various government schemes, as well as wider business support available during this time. If your forecasts indicate that you will need a loan to continue trading in the short- to mid- term, the Bounce Back Loan scheme offers loans of between £2,000 and £50,000 which are government backed and interest-free for the first year. At this stage you may also have considered applying for a Business Interruption Loan, which offers finance of up to £5m, and is also interest-free for the first year. These loans should offer the stimulus needed to cover costs during the crisis and subsequently restart trading, and, if your needs allow, the interest free period will allow these to be repaid without impacting your longer-term finances.
Business Info Point has compiled a helpful guide to business support available at this time.
How should I change my approach to finance?
It’s crucial not to treat finance as a “business as normal” function during the lockdown and into restarting operations. Creditors, such as suppliers or landlords, may switch to upfront payments, which can put more pressure on your cash flow. Therefore, it is important to conduct a thorough review of your expected revenue and outgoing costs each month, and perhaps move to a weekly forecasting system. Whilst this may mean more paperwork, keeping on top of costs and finances in the first weeks of operations is crucial, and will offer a strong foundation to expand and return to operations over the mid to long term.
What should I do about my fixed expenses?
Overhead costs can constitute a large part of any outgoing expenses, and support on these can go a long way to ensuring a healthy cash flow and sustainable financial forecast. As well as government loans and the Coronavirus Job Retention Scheme, there are measures to help with fixed expenses such as rent and payroll, as detailed on our rent and business rates guide.
The government has announced a rates holiday for companies in the retail, hospitality and leisure industries. This holiday covers the 2020/2021 tax year and your business needs to be based in England to qualify. There are some full details of the criteria to access this holiday on the government’s dedicated webpage, but if you are eligible the process should be automatic.
Should I change my terms with suppliers during this time?
It’s important to not expect your relationships and pre-existing with creditors, debtors and suppliers to simply fall back into place, given the crisis has led suppliers to default on their payments, and this can easily throw your finance forecasts into disarray.
We’d recommend being proactive and chasing suppliers for payments before these become overdue and raise invoices promptly. Moving to upfront payments for both debtors and creditors is a quick and easy way to manage cash flow. Similarly, don’t bury your head in the sand regarding your company’s payments. Paying invoices as soon as you receive them where possible and forecasting future outgoing costs effectively will allow for better cost controls. This will avoid bills piling up and becoming unmanageable, and ensuring these outgoing costs are accounted for to keep your cash flow consistent and healthy.
If your debtors are experiencing difficulties during this time, make sure to consider switching to upfront payments or changing clients. Receiving prompt payments and invoices can go a long way in improving the effectiveness of your financial planning.
How can I plan for a second wave?
Whilst the impact of coronavirus on UK businesses has been unprecedented, following the first wave of the virus, we do now have an understanding of the disruption it causes, and the ways in which future disruption can be mitigated.
Law firm Pinsent Masons has put together a helpful guide of the practical steps business owners can take to protect themselves in the event of a second wave, including a warning that we cannot expect the same level of support from government, employees, clients and customers as seen during the first wave.
Key guidance includes making sure employees’ contracts are as flexible as possible, as well as ensuring they have the capabilities to work from home if required, and reviewing your response to the first wave to confirm what worked effectively and what might need to be changed.
How can I reduce my fixed costs and make my operations as lean as possible?
When a business can no longer operate due to coronavirus, having reduced or flexible fixed costs can be the difference between surviving or going under. Much of the government’s support during the first wave was focused on reducing these fixed costs, from their furlough scheme to measures to prevent struggling companies from being evicted by their landlords.
It is unlikely that businesses will receive the same level of support from the government in the event of a second wave, so it is important they you take steps to reduce your fixed costs where possible, and introduce as much flexibility with payments as you can.
This could include introducing lay-off clauses into existing employee contracts as well as negotiating rent reductions with your landlord. Given the uncertainty presented by a possible second wave, it may also be worth reconsidering any upcoming investments or outlays.
How do I make redundancies and other tough staff decisions while managing capacity?
Making members of staff redundant is a serious decision which needs to be thought through carefully. If you do decide redundancies need to be made, you should seek legal advice. You are also required to consult the impacted team members. Impacted individuals may be entitled to redundancy pay and have the right to reasonable time off to look for a new job or arrange training.
Introducing flexible contracts or lay-off clauses is a useful way of managing your fixed employment costs, whilst still being able to operate at an appropriate capacity. When amending employee contracts, you should seek specific legal advice and consult with the impacted employees.
To incentivise businesses to continue to employ staff following their return from furlough, the government has announced a £1,000 per employee “furlough bonus” for businesses who are still employing previously furloughed team members by January 2021.
What other funding/grant options are available to me now?
The full list of government support measures available for businesses can be viewed here. Whilst some of these measures, including the furlough scheme, are no longer open, there is still plenty of government support for businesses as the UK recovers from coronavirus.
Available funding includes the government’s “Bounce Back Loan”, which offers small and medium sized businesses loans from £2,000 to £50,000 with no repayments in the first year.
How do I manage inventory when consumer habits are still so unpredictable?
The coronavirus pandemic significantly impacted businesses’ supply chains and consumer demand, both of which present challenges for managing inventory. As you start to resume trading it is important you assess your existing inventory, taking stock of its total size and the number of perishable, or time sensitive, goods within it.
Your priority should be ensuring that you have enough stock to take advantage of returning consumer demand as we emerge from lockdown, whilst avoiding spending more than you need to on suppliers. By studying your sales data over the last few months, you should get a clear idea of what items are performing well, and which are struggling. You can then reduce or pause the supply of those underperforming goods into your inventory, reducing costs and avoiding unsold goods piling up, which has associated storage and waste costs.
If you have perishable items in your inventory that you are struggling to sell, you should also consider discounting prices to stimulate customer demand and avoid waste, which is expensive.
Should we raise our prices to recoup the losses we’ve made, or lower them to build trade back up?
Whilst raising prices can help you to recoup losses inflicted by coronavirus, it is important to remember that consumers (and other businesses) have also been impacted by the virus and have less spending confidence. This means that whilst increasing prices might improve your profits on paper, in practice it could reduce your overall sales because of its effect on customer demand.
Of course, where additional cost has been incurred in acquiring stock – due to the impact of coronavirus – then it is fair that you consider passing this on to your customers.
Reducing prices will certainly improve customer demand, but it is important that this is not done at the expense of your business’s bottom line. It is also worth being aware that such action can deplete your inventory putting additional stress on your supply chain which is likely still recovering from the impact of the virus.
Discounting perishable, or time sensitive, goods to avoid wastage is also recommended. It may also be worth discounting goods that have performed badly over the last few months to avoid unnecessary storage costs and provide funding for potential pivots to better selling categories.
Finance 
One of the principal concerns during the transition from lockdown to “business as (new) normal” is cash flow. As we noted in our how to guide on managing finances throughout the crisis, cash flow is king and managing it has become ever more important during the crisis. While resuming operations should give a clearer picture of your finances and some sense of normality to cash flow through the business, it’s important to take stock of what your new operations look like, and how this will impact your finances. 
