written by alastair barlow [blog]
Here’s an important email that I sent out earlier today to flinder clients:
Dear all, following on from my note last Friday please see below additional business exercises to consider in these testing times. Businesses need to prepare for potential significant business disruption and adverse impact to demand (some may actually see an increase in demand depending on their sector).
This is a very fast changing environment and we will be sure to share any information or knowledge we obtain in these difficult circumstances. Please do pick up the phone to your business advisor or key flinder contact as needed. This email is the start of an ongoing document which will evolve over time and be available on our website and covers the following:
- Risk assessment & business continuity planning
- HMRC & government support
- Compliance reporting
1. RISK ASSESSMENT & BUSINESS CONTINUITY PLANNING
Performing a risk assessment is an important exercise to work through with senior decision-makers to understand the greatest risks in the business and discuss how to mitigate them, if possible. We’ve pulled together a risk assessment tool in Airtable to enable you to capture, discuss and rank risks in order to further explore how to monitor and mitigate them. Risks will be bespoke to your business but considering the following areas may help to identify specific risks. You can see our Airtable risk assessment model here. You will need to copy this base into your own Airtable environment. Areas to consider include are below.
- Health & safety
- Supply chain
- Security – cyber
- Security – physical location
Key areas to think about for business continuity planning will largely be the same areas as above. Depending upon your business, one of the key considerations currently, after the safety of your team, is the provision of home-working and continuity of communications. Your business continuity plan should allocate owners to specific actions and a timeline.
Most of our clients have people that will work from home at times but as we head into what looks to be an unprecedented period of working from home there are some things to consider and it’s important to have policies and ways of working in place.
- Work from home policies
- Do you have a lone working policy in your staff handbook?
- Have you done a home working risk assessment for your employees?
- Wellbeing, engagement and routine
- Encourage your team to keep a routine (and get changed from their PJs!)
- Stay connected with each other, use the video on Zoom or hangout calls
- Get some fresh air (if not self-isolating)
- Take regular breaks
- Check in with the team to make sure their ok and have one to one calls
- Organise virtual socials – order takeaway for the team and get on Zoom to play an online game
- Collaboration tools (most of you are using these already)
- Google Hangouts
This is a good resource for people related questions for home-working here.
SPEND: It’s critical that you review your current spend levels and establish business critical spend, and if relevant, your cashflow projections. Specific categories to review will be bespoke to your business but some generic ones to consider include:
- Marketing and customer acquisition costs: This depends on your market as some will be in greater demand, however, many will be in less demand
- Rent: Are any of your team hot-desking? Can this be put on pause?
- Contractors: Consider necessity of contractor costs
- Capital projects: What is committed and necessary during uncertainty? Can any of this be pushed out?
- Travel and entertaining: This will naturally reduce but is there anything committed here that needs to be reviewed?
- All other discretionary spend: Remove all discretionary spend
- Don’t forget to cancel pre booked or scheduled costs for refunds where possible:
- Fruit deliveries
- Supplier – consider speaking to large suppliers with greater working capital facilities to negotiate time to pay
Overall, react to what’s happening in your business much quicker.
FUNDING: Expect investment funding to be scarcer in the current environment. Some considerations include:
- Revolving cash facility: Considering taking a revolving cash facility as an emergency back-up i.e. draw down £1k of a £100k facility. This way it doesn’t expire and you can draw down if needed.
- HMRC: There are a few schemes in place to help. See below for further details. Being proactive and speaking to HMRC will be key.
- Coronavirus Business interruption loans: See below for further details. However, banks will still go through their stringent lending requirements. We expect that if you have existing facilities with lenders, then extending these facilities will be the easiest route of finance through the mainstream lenders.
Alternative finance lenders open up further options, with flexibility and lenders who will fund differently to mainstream banks, and different instruments. The British Business Bank will be supporting SMEs as well however, this is still to be defined. You can read more here.
4. HMRC & GOVERNMENT RELATED SUPPORT
We are in a very fast-paced situation and, like the measures the government has introduced to stop the spread of the virus, the measures to support businesses may also change. The below are those that are currently in place:
- HMRC Time To Pay scheme: HMRC are offering this service to allow payments to be spread over a longer period of time. Contact HMRC on their Coronavirus helpline 0800 015 9559. Read more here and here.
- Coronavirus Business interruption loans: There are a number of institutions that can provide this finance and 80% of the loan is guaranteed by the government. We can help with the application through our partner Capitalise.com.
- Statutory sick pay relief scheme: SMEs will be able to reclaim the cost of 14 days of sick pay per employee. Read more here.
- Small business loan: The government, through local authorities, will provide support to small businesses that pay little or no business rates. If your business is eligible, you will be contacted by your local authority – you do not need to apply.
5. COMPLIANCE REPORTING
We may see some recommendations from the accounting bodies in the coming days for relaxation on filing deadlines for annual accounts and corporation tax. We will monitor these and keep you updated accordingly.
This is a very fast changing environment and we will be sure to share any information or knowledge we obtain in these difficult circumstances. Please do pick up the phone to your business advisor or key flinder contact as needed.