Coronavirus – Know exactly where you are…
Following on from our earlier video around the most important step to beat Coronavirus, today we’re looking at the following:
1. How you know EXACTLY where you are as a business and how to keep a strong grip on things over the coming weeks.
2. How to get ready, and potentially get ahead in terms of your preparation for when we all get details of the forthcoming Coronavirus Business Interruption Loans and grant options.
We’re also talking about our FREE 90 day Cashflow forecasting tool, and how that could be really helpful.
Hi, and welcome to another episode of BaranovTV, designed to demystify the world of accounts and tax, and to help your business to grow.
In the current environment with Coronavirus, we’re trying to make sure that we’re getting as much information out to everybody as we can. Ostensibly, obviously, this information is for clients, but we’re also putting it out on other platforms as well, in the hopes that it’ll be helpful for any small business owner.
The strongest advice that we would give is please make sure that you’re using this information in conjunction with conversations with your own accountant. They are the ones that understand your business and have a better understanding, potentially, of the current situation that we’re all in. So please do, if you’re watching this and you’re not one of our clients, please make sure that you do have conversations with your own advisors, because this is meant as a thought starter and as a conversation starter for our own clients.
In this episode, I want to talk about the next big step you need to take as a business owner right now.
We’ve covered about what’s coming from the Budget and the additional information that’s come out form the Chancellor and from the Prime Minister over the last few days.
We’ve also talked about the idea of pivoting the business and trying to find other ways of generating income.
But the next big thing is thinking about these finance options that are coming.
We know that there’s the grant for small business rate relief coming, which will be coming through the local authorities which you will need to apply for, but as yet, we don’t know when that’s going to be available or what process you will need to follow to get that.
The other big benefit that’s coming for small businesses, is the Government’s Coronavirus Business Interruption loans.
Now, we have heard through everyone that we’ve spoken to, in terms of our usual contacts, we have heard that the information about this is coming out hopefully next week.
- We don’t know as yet, where this money is coming from, we know that it’s coming from 44 different lenders.
- We don’t know what their lending criteria are going to be.
- We know that it’s been increased from the original £1.2 million maximum per business, up to £5 million per business.
But that’s about as much as we know.
There is preparation work that you can be doing now in your business, if you think you need to obtain some of that finance.
What you don’t want to do is end up that you’re waiting until that information is available, and the process is available, to start then thinking, well, what do I need to do?
The first thing is to make sure that your books are up to date.
Now whether that’s Xero, whether that’s manual books, if you aren’t VAT registered. Whatever process you usually take, make sure that that is given priority within your business right now.
You will only know where you are when you know where you are.
I know that sounds a bit counterintuitive, but you need to make sure that you understand what your business is looking like right now.
Then you will be able to do what we talked about in the earlier video about finding your gap, keep making sure that you know what your costs are and you are absolutely looking at every penny that you are getting in and you are letting go out of your business right now.
I’ve had conversations with several people around their marketing, do I stop?
If you have a business that you can continue to offer, or if you have managed to pivot your business, and can serve your customers in a different way, then keeping your marketing going could be a really shrewd move.
So really think about it for YOUR business – there are no hard and fast rules right now.
You need to make the right decisions that you think are right for you.
It could be, we spoke to somebody just as an aside. We spoke to somebody who’s actually doubling their marketing because they are convinced that the market that they’re in, which is home improvement and interiors. That people sitting at home and surfing, whose holidays have been kiboshed, will want to spend that money and will want to improve the home that they’re living in, not necessarily now, but when we come out of this. They’re actually going to be doubling their marketing spend. So it’s not necessarily something you want to necessarily stop.
However, you need to focus on making sure you know exactly what your numbers are.
And that means that you need to get your bookkeeping up to date, and you need to keep it there.
The market has been shifting considerably for some time in terms of the bookkeeping market. A lot of bookkeepers are offering, accountants to that fact, are offering daily bookkeeping.
And actually, that’s what you need be to looking towards getting to if you can, at the moment, because you need to know where you are and you need to make sure that you know where you are each day.
And as any money comes in or any money goes out, you need to make sure that you’re maintaining those records.
What you need to be able to do is prove from those records, that your business was solid prior to Coronavirus. That you have every expectation that you will be able to get back to that healthy turnover after Coronavirus, if you get the loan.
And you need to prove that one of those loans is affordable for you and that you are going to be able to repay those funds, because otherwise, you won’t get it.
The banks won’t give it, because they are historically, massively risk-averse. And their first question is, how will you repay me?
So you need to be able to prove that affordability, and the first thing is to make sure that you know where you are right now.
The other important thing is making sure that you have cashflow information and a plan going forwards.
Now if you are a client, some time ago now, we gave everybody access to a 90 day cashflow forecasting tool called Fluidly Lite, entirely free of charge.
If you’re a client and you haven’t yet used this, please get in touch, we will resend you the invitation. We are also going to be sending out to clients today, a link to a webinar that Fluidly have given us access to, which is an 18 minute webinar to take you through some training on that system. That should be really good to help you forecast right now and know where you are.
There is no guarantee that the Government loans are going to accept everybody. But what we’re hoping is that if you put yourself in the best position, you’re increasing your chances all of the time.
Try to avoid if you possibly can, taking out any other sort of finance right now that could be more expensive, unless you have the opportunity of repaying it, if you do get the Government loans, once you know what the criteria are. Because what you might be able to do is get a stop gap now as we talked about before, and repay that, once the Government loan comes through. You need to try and just hang on.
Communicate massively with your suppliers, with your team and with anybody that you are having to pay, or also anyone that owes you money. Communication right now is key. We’ve been speaking to people who have managed to negotiate a three month rent holiday, we know about the mortgage holidays that are coming. It is all about communication right now, and your bookkeeping.
So that’s the end of today’s video. If you need any help, as ever, please do get in touch, it’s what we’re here for. We’re trying to get these messages out, and get as much information out as possible, but there’s no substitute really for a conversation so please do get in touch if you need to. Otherwise, we’ll see you all very soon.