The COVID-19 pandemic challenges our health, our economy and our way of life. People and businesses urgently need support.
The Government announced a series of measures to help businesses in its Budget. This included the creation of a Government-backed loan scheme of up to £330bn.
Below are several practical steps you may be able to implement to minimise the impact of the COVID-19 outbreak:
Stay in touch with customers
In any crisis, customers look for reassurance. We are all facing similar challenges and if possible a quick email or phone call to see how your most loyal customers are managing may make a big difference to them, to show that you truly care. If you are temporarily closing your doors and unable to trade then reassuring them that you plan to return once this crisis is over will be key for future business. Consider offering Gift Cards to capitalise on the loyalty you have already created to support short-term cashflow and retain future visits once the outbreak is over.
Review your business model
People now need to work from home and businesses need to start adapting to this new reality. Is yours ready for this? Are you offering delivery service? Do you use companies like Deliveroo? Do you have access to your own drivers? Have you developed your menu? Are you working in collaboration with other businesses such as taxi firms and restaurants in your area to support your local community? Some businesses may already offer Delivery service as core to their proposition, but it is going to be a challenge to support huge demand following the government lockdown and there will be opportunities to enter, and maybe even re-invent, this market. You may need the necessary IT to support a new business model.
The New Job Retention Scheme
Many restaurants have unfortunately needed to reduce staff costs and make redundancies, reduce working hours, unpaid leave, etc. The Government is urging caution and asking businesses not to over-react to the situation. This is difficult, if not impossible, to do when income is falling rapidly and you need to protect your livelihood.
The Government has introduced a new job retention scheme that will cover up to 80 per cent of wage costs backdated to 1 March for a period of three months or longer, if needed, for small businesses. Grants are due to be available to businesses within weeks.
Unfortunately, for many cost control will be inevitable and staff costs will be a key part of this. If you do decide to take this action to protect your business make sure you consider employment law and seek advice should you need it.
It’s also worth bearing in mind the costs and challenges of recruiting once the crisis is over and you are trying to return to ‘business as normal’.
Delayed VAT payments
The Government has announced that it is deferring the next quarter of VAT through to the end of June. Those payments can now be paid at the end of the financial year.
Statutory Sick Pay (SSP) arrangements
The Government is introducing legislation to allow employees to reclaim SSP relating to absences as a result of COVID-19. This refund will cover up to 2 weeks’ SSP per eligible employee. The repayment mechanism is still being developed by the Government, but it’s important that you maintain records of staff absence and payments of SSP to ensure you can claim when the system is up and running.
The current rate of SSP is £94.25 per week. Note that SSP can now be paid from the first day of absence.
Understand your finances
Understanding how your business is performing is critical in difficult times. You are likely to have to make important decisions to help support the business and this needs to be based on an accurate view on where the business is and where it’s going. Cashflow is going to be key.
Make sure your accounting records are up to date and work with your accountant. Now may be a good time to update your systems and take advantage of some of the tools and technology available to help you understand the numbers and save time and effort (e.g. Xero integration with your POS) especially in preparation for better times.
Once your figures are up to date you can more accurately predict demands on your future cashflow, make more informed decisions and get a clear picture of what your business and, more importantly, you and your family may need over the next few months. If you are using a modern POS system like Syrve, you should have easy access to a real-time view of your finances out-of-the-box.
Cashflow
Most businesses will have some working capital available, but this can quickly be used in challenging times. Use your knowledge of your numbers and understanding of future income, orders, costs, commitments, etc. to look at how you and your business can cope with a fall in income. Your POS should be able to provide you with an up-to-date picture of your finances. Alternatively, ask your accountant to help if you need support doing this. Consider how you might respond. Do you need to control costs? Is there a need for further funding?
Think about funding available
The Government announced on Monday 23 March the availability of business loans which will now be interest free for 12 months (was 6 months).
Your bank is also a good point of contact as they will know you and your business – many of the major banks have stated they have options that businesses are able to access should they experience temporary setbacks as a result of COVID-19 affecting their business.
You should also consider alternative lenders who may be able to help you in the short term.
Coronavirus Business Interruption Loan Scheme
At Budget 2020 on Wednesday 11 March, the Chancellor announced a ‘Coronavirus Business Interruption Loan Scheme’, to help businesses during these difficult times.
The scheme will be delivered by the British Business Bank and, as well as business loans, there are many other types of finance supported by the programme, depending on the provider.
For further information regards availability of finance products and eligibility criteria, please see the British Business Bank website.
Business Rates and Cash Grants
The Business Rate Relief announcements in Budget 2020 have been extended so that the Business Rates Retail Discount will be available for all businesses occupying retail, leisure and hospitality properties for 2020/21, in most cases reducing the Business Rates bill for 2020/21 to Nil.
In addition, grant funding of £25,000 has been announced for smaller businesses occupying retail, leisure and hospitality premises. These will be businesses with a rateable value between £15,000 and £51,000.
Grant funding has also been announced of £10,000 for all businesses, whatever their sector, who already receive small business or rural rate relief. Businesses will not need to apply for grant funding, you will be contacted by your local authority.
Talk to HMRC
Among the series of support packages, the Government pledged in the Budget, was an enhancement to HMRC’s ‘Time to Pay’ arrangement scheme to help those with upcoming tax bills plan how they can pay with an individual plan. To support this, it has also launched a dedicated helpline – 0800 0159 559 – with increased staff numbers, to help those businesses and self-employed people who are concerned about not being able to pay their tax due to coronavirus.
Look at your insurance cover
Check your insurance policy to see if your commercial insurance includes Business Interruption, Supply Chain or Denial of Access cover. This may include cover in the event of your business being affected by a ‘notifiable disease’. The UK and Scottish Governments have declared that COVID-19 is a notifiable disease.
If you do feel you have some form of cover, speak to your insurance provider or broker and ask them how this would work in your particular circumstances.
Business regulations
It is inevitable that the Government will consider relaxing some regulations which apply to business. The Government have already said that it will support the food industry and help provide meals for people who need to self-isolate.
Useful Articles
COVID-19: Support for F&B Industry:
Syrve is offering support to all UK F&B customers forced to close their doors due to COVID-19 government intervention by suspending their software renewals during the period.
Actions Syrve is taking to help its customers navigate these difficult times.
