As much of the UK goes into quarantine to help stop COVID-19, your business may be feeling the pinch. If your customers are staying away and the bills still need paying, what can you do to help your business through these tough times? Article by Nick Green.
For once, we really are all in this together. The coronavirus crisis is forcing millions of Brits into self-isolation at home, and many of the businesses who would normally enjoy their custom are suffering as a result. There are some winners – supermarkets, soap manufacturers and toilet paper makers among them – but services industries in particular are suffering. Restaurants, bars, gyms, hairdressers, cinemas and theatres, taxi firms, and anything else that involves people mingling, are facing everything from a severely reduced service to total shutdown for at least the near future. This in turn means that the suppliers of those businesses will take a similar hit.
Wi-Fi provider Purple has tracked the impact of the coronavirus on businesses across Europe and in the UK. The past week has seen the UK’s retail footfall drop by 45 per cent, while restaurant usage is down by 68 per cent. Retail footfall in Europe fell by a massive 85 per cent over a 10-day period.
It is hoped that these measures, though drastic, will be short-lived if they help to slow the spread of the virus. If your business is among those affected, the key thing is not to panic. With many thousands of others in the same predicament, this isn’t the same as facing a business crisis alone. The government is promising an unprecedented level of financial support, and there is also plenty that you can do to ride out the crisis successfully with your business intact.
How is the government helping small businesses?
Chancellor Rishi Sunak announced a package of measures in the Budget to help businesses through the coronavirus slump, and more clarity on those has emerged since then. The key areas of aid include:
- Guarantees on loans to businesses worth at least £330 billion.
- The Coronavirus Business Interruption Loan Scheme (CBILS), which will lend up to £5 million apiece to viable UK businesses that would otherwise be turned down due to inadequate security, with no interest for the first six months.
- No business rates for 12 months for shops, restaurants, pubs, theatres, music venues and other leisure/hospitality businesses.
- Cash grants up to £25,000 for businesses in premises with a rateable value under £51,000.
- 700,000 of the smallest businesses will be eligible for cash grants of up to £10,000.
- Statutory sick pay relief for small and medium-sized businesses.
- An expansion of the HMRC ‘Time To Pay’ scheme for businesses struggling to pay their tax bills on time. To find out more, call HMRC’s helpline on 0800 0159 559.
The devolved governments of Scotland and Wales are matching these plans.
How do I claim government help for my business?
The CBILS (initially interest-free loans to small businesses) will be made available through individual banks, rather than via the British Business Bank. The BBB suggests that businesses approach more than one participating lender, and expects the loans to become available from this week. Currently details of which banks will be participating are not available.
If your business is in the retail, hospitality or leisure industry, you are potentially eligible for a £25,000 cash grant. Details of how this can be claimed have not yet been revealed, but expect an announcement before the end of March.
The smallest businesses – those that qualify for Small Business Rate Relief (SBBR) or Rural Rate Relief – will be able to get a £10,000 cash grant. You don’t have to do anything to apply for this, as your local authority will contact you at some point in April. If you haven’t heard anything by late April, it may be worth getting in touch with them yourself.
How do I retain customers during the coronavirus crisis?
If ever you prided yourself on your creativity, now is the time to let it shine. Rack your brains for every way that you could deliver your business while minimising customer contact. Solutions might include:
- For retailers, shifting as much as possible into online sales
- For food and drink businesses, changing to a delivery model
- For services, exploring how much can be done remotely (e.g. combining deliveries of products with online consultations – some beauticians and fitness instructors are already trying out this approach)
- Finding synergies with other businesses who are having to rethink their business model. For example, many minicab firms are now struggling. Is this the fleet of delivery drivers you desperately need?
One thing all businesses can do is expand their social media presence. This is where your customers are now. Engage with them, remind them you are there, and work together to find out if there is a way you can still serve them. Your customers have never been more ready to adapt their own behaviour – so what can you do to meet them halfway?
Most importantly, communicate clearly and regularly with your customers so that they know exactly what you are doing during this crisis, and how you are safeguarding their health if you do happen to come into close proximity.
How can I keep my business running?
The watchword at the moment must be ‘survival’ rather than growth. Don’t feel like a failure if you have to put your ambitious plans on hold. Many businesses will fare best by entering a kind of ‘safe mode’ where they aim to make just enough to keep ticking over, while reducing overheads as much as possible.
Tips for running your business in ‘safe mode’
- Think ‘cash flow’ not ‘profit’
Obviously it’s great if you can still make a profit. But a small loss beats a big loss. Think about where you can take a managed hit to your profits in order to generate ready cash to pay your bills as they fall due – as this will keep you solvent.
- Sweat your assets
Think about anything and everything that your business owns that could be used to generate revenue. Do you have stock lying unused that could be sold on elsewhere – even at a small loss? If you’re part of a supply chain and have lost a major customer, can you sell anything direct to consumers and skip the middle-men? What do you have that other businesses might need right now?
- Trim budgets that are no longer appropriate
There is no point spending money attracting customers to parts of your business that can no longer operate as normal. For example, any hospitality or catering-based business could temporarily suspend advertising and operate exclusively though social media. You could also suspend all growth-related activities to focus on your core business.
- Tap the ingenuity of your employees
Don’t expect all the good ideas to come from yourself. Encourage every one of your employees to think of ways that they could continue to work under the new constraints. Their inventiveness may surprise you. You could even offer bonuses for the best ideas.
How can I keep morale positive during this crisis?
One of the biggest dangers to your business may be the impact on morale – both your own and that of your employees. As the boss, you may feel a wide range of negative emotions: anxiety and uncertainty, and perhaps anger that your business has suffered this knockback through no fault of your own. Similarly, your employees may be worried about the security of their own positions, and frustrated that so much of their hard work might now seem ‘wasted’.
All of this can make it harder to keep working steadily in the way you need to get through the crisis. To keep motivated, follow a few simple guidelines.
- Face facts
Don’t try to be relentlessly optimistic – accept that this is bad, and that it will be tough, and that it will last for some time. This attitude will help you to accept the situation and deal with it, rather than relying on hope alone.
- Keep the faith
Once you’ve accepted the size of the challenge, you can reassure yourself that you will do whatever it takes to overcome it. Have confidence in the talents that have brought you this far.
- Support your team
If your people are working remotely, bear in mind the culture shock of being separated from each other. Encourage more communication, invite people to express their concerns to you privately, tackle the loneliness issues that may arise, and feel your way towards a new way of working. Think about what other issues may be affecting your staff at this time. Don’t assume you know what is bothering them the most – just ask them.
- Anticipate mini-crises
The journey will be a bumpy one. Don’t get thrown off course by smaller problems that interfere with your handling of the big one. Take things one step at a time, so you’re not overwhelmed.
- Picture success
Imagine yourself in a year’s time, looking back on how your business survived the coronavirus crisis, and telling a friend about it. The clearer you can picture this, the more clearly you’ll be able to see your way through to the other side.