The coronavirus pandemic has created one of the biggest threats to the British economy since World War II. The country going into lockdown has put an immense amount of pressure on small businesses up and down the country. As such, experts are predicting that the United Kingdom is heading towards another recession. The government has been putting a number of measures in place to support small businesses through this crisis. They have announced the furlough scheme, for instance, which ensures small businesses can retain their employees at a time when they may not have work to do. They have also delayed certain changes, such as the IR35 reforms, in order to help small businesses maintain their stability. However, very few small businesses will find themselves safe from the adverse effects of the Covid-19 crisis, regardless of the efforts by the British government. One in five British firms are warning that they have less than one month’s worth of cash in reserve, whilst just under half saying they have three months’ worth of cash.
The first and most important step that SMEs can take in order to offset some of these effects is to support their staff. A struggling small business will only continue to struggle without productive, happy employees determined to help your company weather this crisis. With most small business’ staff now working from home it is crucial that they have all the necessary equipment and supplies to work at full capacity. Managers should check that their employees have access to wireless internet, laptops and any other technology they would usually have in the workplace. Also ensure that important documents are safely accessible online via a file sharing platform like Google Drive. Furthermore, whilst there must be an element of trust given to staff whilst they work remotely, managers should utilise project management tools to ensure work is being completed. Project management platforms Monday, Asana, Trello and Basecamp are ideal for establishing tasks, assigning team members and setting deadlines.
It is not only important to reflect on the impact coronavirus will have on your staff though; it is also essential to consider how it is going to affect your customers and suppliers. This will allow you to see a clearer picture of how your cash flow might look in the next three to six months, for starters. If there are high paying suppliers that are being heavily impacted by the crisis, you may be able to put precautionary measures in place in case they drop your business before it is too late. Being aware of suppliers’ conditions may also help you to negotiate alternative payment terms and strike deals that are mutually beneficial to both of you. You could offset payments for six months, for example, or put small deposits in place to ensure there is still money coming into the business.