Coronavirus Support: How can businesses turn difficult times to their advantage?

Running a business is all about peaks and troughs. Some seasonal businesses deal with them every year and plan their activity accordingly. But what if your business is going through an unexpected period of downtime?

During the COVID-19 pandemic, many otherwise successful businesses will be facing difficult times. If you run one of the businesses affected, you could be finding yourself with a lot of time on your hands and gaps in your usual schedule.

The media will soon be awash with stories of businesses reducing staff hours, cutting pay, and considering redundancies.

This may be unavoidable for some, but there are still steps that SME’s can take to improve the situation and set them up to resume activity once things go back to normal.

1.      Review outstanding debts

You can use any period of inactivity to review your accounts and make doubly sure that you know who owes you and how much.

If you’ve played fair and given your debtors sufficient time to pay then you should start making calls. Even collecting a small proportion of any outstanding amount owed to you is cash in the bank – where it’s always better to be than on a balance sheet.

2.      Stock audit

A lot of businesses keep stock and assets either on the premises or in other storage facilities, sometimes at increasing cost.

What began as a prudent and sensible measure could eventually become an expensive habit and eventually even a liability if the stock is just sitting there or even building up.

Could some of it be sold or freed up to bring in more funds for the business right now? More stock can be acquired but only if there is a functioning business there to acquire it.

3.      Financial fitness report

When was the last time you went through your business’s balance sheets from top to bottom? When did an expert review it to see what efficiencies could be made swiftly to get some quick wins and quicker cash flow coming in with some changes?

Are there any savings or surplus that could be put to good use supporting the company now? Are there any investments that could be realised for the benefit of the business? If there are any leaves to overturn then now is the time to turn them.

4.      Credit lines agreed and readied

With various options being rolled out for small and medium sized businesses including rental holidays, government backed loans and grants available – it’s prudent to explore what help you’re eligible for and take advantage even if it isn’t critical for your company’s survival at the present moment.

You should also take the opportunity to have a conversation with your business banker to ensure you have sufficient leeway and access to any potential loans, overdrafts and other funding or credit sources if required.

5.      Conversations with creditors

It’s always a good idea to let your creditors know where they stand rather than let them guess or assume the worst.

They may naturally be more nervous and anxious in the current climate so seize the initiative, get in touch and if there are going to be delays, for any reason, then let them know.

They will be more likely to understand and show goodwill themselves if you let them know there may be issues in advance. 

Reasonable precaution is beneficial for any business even if there aren’t any visible clouds on the horizon – any experienced business owner or director knows that the weather can change in an instance. Especially when we’ve all seen the damage done in these early stages of the COVID-19 pandemic.

Whether your business is experiencing the first collateral effects of the coronavirus outbreak or has so far been fortunate enough to escape any serious damage, you should get in touch with a Business Rescue Expert to discuss your concerns and ambitions and help you plan an efficient and effective way of overcoming the former and working towards the latter.

Nobody knows how damaging COVID-19 could eventually be for the economy and SMEs but protecting and improving your own business is always effective medicine.