Back in July 2020, our finance blog talked about the financial uncertainties facing many SMEs as they began to tentatively reopen. Today those uncertainties are still firmly with us, but at last, we hope that we can see light at the end of the tunnel, as we start on the roadmap to lift lockdown.
Verity, our Head of Financial Planning, shares her thoughts on what actions business owners can take to help steer themselves through any choppy waters over the coming months.
Coronavirus has impacted businesses across the UK including many of our valued customers, but there are always active steps that you can take to help your business through these difficult times.
The first step is to make sure that you have a clear view of your cash flow. Forecasting your cash inflows and outflows will help you to identify any pinch points and give you the opportunity to seek help to bridge any gaps. If there are gaps in your cash flow, there are always a number of options that you can consider:
- Payment plans: Negotiating payment holidays or simply working with your suppliers to delay payments for a few days, can create breathing space until you have sufficient income to cover your bills. Presenting a cash flow that clearly shows when your income will increase and your cash flow pressures will reduce, demonstrates that you are in control and is often a key part of your negotiation.
- Top up your income: Has the coronavirus and people’s changing habits created any new opportunities for your business? One great example of this, close to my foody heart, is the number of restaurants offering amazing ready to cook meals that will turn us all into top chefs. Well I can always dream!
- Cutting costs: Are there costs that you can cut completely, or perhaps you can negotiate savings or find a cheaper way of doing things? At CNG we have improved our customer communications and reduced costs and our carbon footprint, simply by increasing our text and social media communications.
- Are your expenses out of control? As part of our continued commitment to support our customers through new products, we have partnered with Caxton Business to help you streamline expense management and get control over business expenditure. Caxton support businesses in taking control and gaining visibility over business spend, offering a business management platform that provides corporate cards and tracks real-time spending for easy expense reconciliation. They can also provide guidance on building a robust expense policy to manage employee spend and cash flow. Find out more
- Marketing: Talking about social media reminds me of the importance of great marketing: How are you communicating with your customers? Now would be a great time to update your social media to make sure that your customers know that you are open, to tell them about any exciting new services that you offer and share your Covid safety actions with them to reassure them that your business offers great customer service in a safe environment.
- Government support: Finally, the government continues to offer a number of financial schemes to support SMEs, including furlough support, business interruption loans (ends 31st March), business rates relief and grants.
You can find all the information that you need here.