April 8, 2020
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by  Pradeepan Velayuthan

FIVE Important Steps Business Owners must take to prepare for the COVID-19 Pandemic

FIVE Important Steps Business Owners must take to prepare for the COVID-19 Pandemic Praddy Financial Consultancy

COVID-19 has caused unprecedented business interruption and lots of businesses are not prepared to face this unexpected business interruption.

Prevention is better than cure; and if your business is not prepared to handle the current crisis, it could be fatal to the business.

Be sure to work closely with your advisory team (internal and external), your finance team, mentors, industry colleagues; and plan how to be resilient during this difficult time.

Here are Five IMPORTANT things you should be focusing on right now:

1.    Safety of your team

More than anything safety of your team is paramount. Make sure they are protected during this pandemic. Educate the team how to stay safe during this pandemic and set up remote working and avoid non-essential travel.

Set up regular calls and online meetings to keep the team motivated and look after their mental health.

2.    Plan your cash flow

Cash is king and the lifeblood of any business. Do you have a cashflow forecast for the next 12 months? Cashflow forecast will provide you with a good indication how long your business can survive with the downturn in sales and what you should do for the survival of the business.

a.    Contact your suppliers and creditors and try to negotiate payment flexibility. During this difficult time, many suppliers will agree to extend their payment terms.

b.    See how you can reduce your monthly overheads

·     If you are paying for any services that are not important to the business, consider cancelling them

·     Re-negotiate your costs with your suppliers

·     Consider whether you can freeze your monthly cost if the service is not used by the business during the period

·     Re-consider your budgets – For example if you are not selling your products or services during this period you may consider reducing your marketing budget.

c.    Business Rates:

·     Check you are qualified for the business rate relief if not speak to your local council and request a payment holiday.

d.    Cash Grants:

·     Government is offering cash grants for small businesses which occupies a property. Keep an eye on the letters from the council regarding this grant. Some local councils have requested the clients to complete an online form to claim this grant.

e.    Rent:

·     Speak to your landlord and check on a payment holiday

·     Government has confirmed that commercial landlords cannot evict the client for unpaid rent up to 3 months.

f.     Furloughing:

·     If you must close your business due to COVID-19, consider furloughing your employees.

·     Government has confirmed they will cover 80% (maximum of £2500) of the salaries for the furloughed staff.

·     It’s important not to lose your key employees and protect their value to the business and you will need them even more when this pandemic is over.

g.    Check with your Bank on the financing options available:

You should be in regular contact with your banks and get the best financing plan in place so the business can survive during this difficult time. You should discuss what type of financing is required depending on your company’s needs, for example:

·     Overdraft – if you need finance for short term

·     Bank Loan – if you need financing for a long term

·     Invoice finance – If your customers are taking more time to pay

·     Asset Finance- if you are looking to purchase a business asset  

3.    Insurance

Does your insurance policy cover business interruption and loss of profits? Please make sure you check with your Insurance provider what is covered. If you are not already covered for the business interruption and loss of profits, there is nothing much you can do at this point. However, it’s worth making a note and discuss this when your insurance is due for renewal. This is not the first-time businesses are affected by a pandemic and possibly the last time either.

4.    Cyber Security

More and more people have started working remotely due to the lockdown and there are lots of emails and information available in regard COVID 19. Cyber criminals are very busy during this period targeting vulnerable individuals and businesses. Cyber security is quite important during this period, and following are few precautions you must take,

·     Make sure all the computers have up to date Anti-Virus software

·     Take special care on emails and be super vigilant when opening suspicious links

·     Password protect your computers

·     Activate 2-factor authentication whenever possible

·     Use of VPN links to access secure data

5.    Brainstorming

The leadership team should be in regular communication to discuss how to handle the business during this crisis and survive unscathed through not only the pandemic itself but the likely recession that will follow.

6.    Look for opportunities

Lots of businesses may crash during this pandemic. It’s expected nearly one million businesses will be closed during this pandemic. It’s not always bad news as there are some businesses, they do thrive during situations like this. So, please prepare yourself and look for opportunities and there will be always light at the end of the tunnel.

Good luck and take care of yourself and one another.

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