11 things businesses can do to survive the economic fallout of COVID-19
Businesses are now operating in unprecedented times and never has the phrase “Cash is King” been more appropriate. Businesses should prepare cash flow projections going forward to identify where problems may exist and take immediate action to remedy those problems. The actions that all businesses should consider include the following:
- Cancel all unnecessary expenditure. No point incurring advertising expenditure to promote the Easter Sale when your premises are in lockdown
- Ensure the local councils are cancelling rates payments where appropriate
- Ensure you obtain all the grants that are available to you
- Apply to your bankers for a Business Interruption Loan. Given the unprecedented demand make your application online and not through your local branch
- Approach your landlords for a temporary rent reduction or holiday. It is not in their long-term interest to lose a good tenant
- Consider furloughing some of your employees but, as your most valuable asset, talk to them to explain why this action is necessary and obtain their agreement to doing so. Making employees redundant should be avoided at all costs
- Defer your current VAT quarter payment to 2021
- The self-employed can defer their 31 July 2020 interim payment on account to 31 January 2021
- Agree time to pay arrangements with HMRC for tax and payroll liabilities
- Agree extended credit facilities with your suppliers but do not withhold payments as they are attempting to survive just like you
- Talk to your Debtors to agree payment arrangements with them. Remember that the self-employed will not be receiving their grants until June 2020 when agreeing payment terms.
Finally, new allegiances will be formed during the lockdown period. New businesses will start, some businesses will fail and cease but those who treat their employees, customers, suppliers, landlords and financiers with respect and empathy during these difficult times will ultimately prosper.