Lyndon Wood, CEO of constructaquote.com, explores what SMEs should now be doing to survive current challenges and what the future will look like for businesses once coronavirus is over
British SMEs are currently fighting two viruses – one that is being passed from person to person and one that is economic. Both are obviously troubling. Companies throughout the UK, and indeed throughout the world, are having to make difficult decisions at a time when there is no real end date in sight. Even the best business forecasts are now based on many different scenarios that may or may not come to fruition.
Britain’s construction sector contributes £117bn to the UK economy, 6% of total economic output, and provides 2.4 million jobs. Coronavirus has knocked construction firms sideways. As construction companies now play catch up in joining the majority of other companies and send staff home, a new set of challenges are faced on top of having to meander our way through Coronavirus which could potentially be around for some months to come.
What can SMEs do now to help survive the fallout?
Firstly, it will be of little surprise to know that many SMEs will not survive the coming months and small companies are likely to be hardest hit. However, the UK Government has made grants and loans available for SMEs and for the self-employed, abolished taxes for smaller companies, enforced statutory sick pay for workers, and we have seen the Bank of England reduce its base rate.
We now have Business Interruption Loans and a £20bn package that includes £330m in Business Loan Guarantees. Unfortunately, companies have to prepare forecasts simply to access this financial support so just how quickly grants and loans will become accessible is anyone’s guess. Some companies will have to shut their doors before access to financial support becomes available.
At a time when many are quickly learning to be grateful for small mercies let’s hope a speedy process is imminent as most cannot afford to wait around for funding.
Companies need to prepare a worst-case scenario and create a detailed cash flow forecast. Talk to suppliers and revisit current payment terms. Reconnect with investors and attempt to raise money. A Business Continuity Plan is useful for working out what can happen in a variety of scenarios. At this difficult time, companies need to be more entrepreneurial than ever before. We’re already seeing how important a lesson financial awareness is – people are ultimately more aware of the importance of savings, planning, and investing for bad times and the future.
Top 6 essential websites for SMEs and startups
The Economic Resilience Fund
Businesses can now apply for this help in the form of grants of up to £100k.
Support for Businesses
This COVID-19 guide offers advice for employees, employers and businesses
Government Coronavirus Cash Grant
To support small businesses through the Coronavirus outbreak, the government has increased its cash grant to £10,000.
Advice and guidance for small businesses & the self-employed
From advice and guidance on reducing the risks from the Coronavirus to you and your business, this website offers information on measures, from the UK, Welsh, Scottish, and Northern Ireland Government websites.
British Business Bank on Coronavirus Business Interruption Loan Scheme
If you are a small business or a business advisor, the British Business Bank is now in a position to provide a Coronavirus Business Interruption Loan Scheme.
From paying your bills to guidance on how the UK is affected by the Coronavirus, Citizens Advice offers guidance for employers and employees.
For those working for SMEs from home, many people have had little choice than to pull resources together. Teams are adapting to using technology that perhaps they weren’t familiar with in the past and executives are exploring improved and more direct ways of communicating with colleagues and customers using tools such as video, webchats, and webinars to get their message across.
One of the luxuries we now have is that thanks to technology businesses can adapt, if willing, and what is taking shape now may be the way forward in terms of how we do business, where we do business, and in what format it takes place in the future.
We’re already seeing creativity and a change in mindset. Just look at JCB, Dyson, and Mercedes Benz who have engineers working on developing and designing ventilators for hospitals across Britain.
It’s somewhat ironic that during a time of a pandemic there are already positive lessons to be learnt by businesses across all sectors. Employees now have the opportunity to learn new skills and companies have (and must) be able to use alternative ways of doing business. One has to wonder if in the future there will be industry reforms and new financial systems put in place. Will some companies continue with flexible working for staff? Will we see a surge in new job roles that have never existed before that will affect the way people are recruited further down the line? People’s goals and ambitions may change.
For now though, until we experience the ‘V’ curve, (which I go into more detail on in my recent Podcast Experience called Raw,) which will inevitably bring big opportunities with it post Coronavirus, it is time for SMEs to reflect on achievements and goals until we’re once again robust enough to move forward.