The information around coronavirus (COVID -19) is changing rapidly and there is also a lot of hype and rumour which, when taken with the escalating problem in Europe and the rest of the world, is changing behaviours here in the UK.
Countries are closing their borders and restricting travel, large sporting fixtures are being cancelled or postponed, there has been panic buying of various household items as well as the expectation of school closures and self-isolation for the over 70s, if not for all of us.
Understandably, people are concerned and this is already affecting businesses. The UK, along with other countries, have cut interest rates in a bid to lessen the economic shock and to fend off recession but, undeniably, businesses are going to suffer.
First, there is the matter of keeping our people safe. Business owners tend to feel a responsibility for the individuals who work for them and safety and well-being of their staff and customers will be of utmost concern. People are understandably concerned and I feel communication and planning are essential to allay fears and set out how the business can continue to operate in the event of restrictions being imposed or if individuals need to self-isolate either as a precaution or through actual illness.
- Communicate how the business is going to operate if restrictions are imposed;
- Make arrangements, in advance, for remote working if possible;
- Communicate what pay arrangements will be adopted in the case of self-isolation, premises closures or time needed for childcare if schools close;
- Implement general good hygiene practices in the working environment;
- Keep everyone up to date when circumstances change;
- Have a plan on how to contact everyone if you have to implement changes or restrictions.
Secondly, there is the economic effect on the business. Already businesses in the travel and hospitality industries are seeing business dwindle and this is likely to spread to other sectors if freedom of movement is restricted. Also owners are generally being more cautious about investment due to current uncertainty. The main issue, I feel, in the short term will be cash flow. Income will reduce but overheads will remain, particularly salary costs. It is not unfeasible that salary costs will be incurred in situations when the team are unable to work but owners will not want to lay off staff as they know those people will be needed again once this crisis has passed. Not many businesses operate with large surplus cash reserves.
Financial planning is therefore crucial. If help is needed talk to your bank and accountant sooner rather than later. In last week’s budget the chancellor, Rishi Sunak, offered help for Britain’s small and medium sized businesses.
- “Time to pay” arrangements can be requested from HMRC for those having difficulty paying their tax bills
- Business rates will not be charged on companies in the retail, leisure and hospitality sectors in 2020/21
- £3000 grants will be available for the smallest business who are already exempt from paying rates
- Loans to businesses affected by Coronavirus will be underwritten by the Government with a guarantee of 80% of each loan
- 14 days of sick pay can be reclaimed for each employee
Thirdly, let’s not forget the business owner themselves. These are people who tend to carry the financial and emotional burdens of their businesses and it can be a lonely place to be. Rising concerns over staffing, finances and possibly even the viability of the business will only increase the pressures they already face. In these circumstances, it is more important than ever that they utilise their support networks, take advice and try to keep an element of work life balance to keep themselves healthy and able to make the tough decisions that are going to be needed.
We are here to offer support to all our clients so if you have concerns please contact us. We have put contingencies in place so all our staff can continue to work even if we cannot make it to the office so you can rest assured that we will continue to provide the support you need.