Small Business Emergency Action Plan

Published 20 March 2020

Not all businesses are going to survive the next 3 months. There is the reality of reduced or no sales if your customers are in isolation and you can't deliver to them, they can't get to you and they can't pay you.

The situation we face is one that we can't change and it's the same for everyone. 

We believe in planning for the worst and hoping for the best.

Here's what you need to do if your sales are going to take a hit:

1) Stay healthy - It's important to follow the Government guidelines. Work from home if it is possible.

2) Work out your expenses (including salaries) for the next 3 months.

3) If you are in retail - work out your break-even point by dividing your costs by the Gross Profit margin, that's the sales figure you have to achieve to cover expenses.

4) If you are in the service sector - add your expenses to how much you need to live on and that's the break-even point in terms of billings or fees that you need to charge over the next 3 months.

5) Hotels and restaurants - work out the number of covers or rooms you need to sell to cover expenses and salaries. For manufacturers work out product sales and do the same calculation.
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6) If it looks like you're not going to be able to operate at break-even - look at your cash or bank balances, have you got sufficient money saved to survive after paying expenses?

Please contact us if you need help to do these calculations and we can calculate these figures for you, without them you can't make clear decisions.

Once you have a grasp on your figures and you consider yourself to have a "viable" business (i.e. you can survive)

1) There is Government support:

- Business rates holiday.
- Small Business grant funding of £10,000 for all businesses in receipt of small business rate relief or rural rate relief.
- Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000.
- A Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance.
- HMRC Time To Pay Scheme.

We will provide you with information and guidance on how to apply for this help if you qualify.

2) Talk to the bank if you have loans or an overdraft - They will be supportive of viable businesses.

3) Involve your staff - Have a discussion about likely trading conditions and get their input on reducing costs and maintaining revenues.

4) Review your list of products and services - eliminate those that are unprofitable or not core products/services.

5) Get rid of customers that won't pay.

6) Review your debtors list - chase up overdue invoices (if appropriate) and offer existing debtors extended payment terms and/or discounts.

7) Agree extended payment terms with all suppliers in advance.

8) Client contact - Put extra effort into making sure your relationships with your better customers are solid.

Contact us if your business is not viable and we will run through the options.

Above all stay strong! Your health and welfare is more important than anything else right now.