Top priorities for businesses during a downturn
Many businesses have suffered over the last year. If yours is one of them, what should you be prioritising?
Forecast when you will have cash coming in and out – redo your cash flow forecast.
Review costs and outgoings – can anything be switched off or toned down?
- Look at deferring costs where sensible and talk to suppliers
- Can you reduce, defer, suspend any costs?
- Can you negotiate discounts or reductions with suppliers?
- Can you extend payment terms?
- Recognise that not all costs can be got rid of and must be paid
- Talk to your landlord about your rent (or mortgage provider)– many landlords recognise their tenants have difficulty paying the rent and are trying to help (also new measures mean no business can be evicted if they miss a payment in next 3 months)
- Keep suppliers sweet, build relationships with them and remember they are in the same boat as you and you will need to work with them when everything gets back to normal
- Be careful how much cost you defer as this may store up problems for later as you will still need to pay at some stage (discounts / reductions are better)
- Debtors – keep chasing money you are owed! Get cash in even if you offer stage payments, discounts and reductions
- Review staffing levels and consider furlough scheme where appropriate
- Keep work coming in where you can – be proactive getting work; can you adapt your business and move on line or deliver goods (eg butchers and restaurants)
- Use zero interest credit card to pay for goods, if possible
- Contact your bank to request an overdraft /short term loan
Government Support Schemes
- Consider deferring paying your VAT (just cancel the direct debit) and income tax deferral schemes but remember you will need to pay theses eventually so consider ring-fencing this money
- If you have existing loans, ask for a capital repayment holiday to save cash
Review the government grants that are being offered to assess if you’re eligible:
- Staff furlough scheme, Small Business Grant and payments for self-employed.
- Review marketing costs and ensure they are still value for money
- Ramp up social media advertising and marketing, but maintain your brand values. Be tactful by using appropriate pictures (i.e. don’t use pictures of crowds, shops, restaurants or beaches!)
- Join in with on-line networking – networking groups have gone on line using Zoom, Skype or Twitter. It’s a new way of networking and everyone is finding out what works best, so join in!
- Keep in close contact with staff whether WFH or in premises – many enjoy the social contact with colleagues and will be missing this and also worried about current situation
- Regular team meetings and manager meetings
- Think about their well-being and mental health, you will need them when everything gets back to normal.
Clients and Customers
- Keep in touch with clients via social media, email, telephone , indirectly or one to one
- Keep reminding clients you are still there and available to help and support where you can.
Take this as an opportunity to review processes in the business and get it working better.
- Can you reduce paper in the office?
- Can you adapt the business?
- Does your website need a refresh?
- Can you and your staff update their skills with some training?
- Write or update your business plan and think what the world will look like post Coronavirus
- Take action and make decisions now.
Business Advisor – STANTA
Mark joined STANTA in 2016 as a business advisor and now uses his experience advising small businesses how to be successful and to keep and eye on costs and profit margins.