An Insolvency Practitioner’s Tips for Your Business Surviving the Coronavirus

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An Insolvency Practitioner’s Tips for Your Business Surviving the Coronavirus

Surviving the Coronavirus

CV is the biggest disruption to businesses any of us will probably ever see in our lifetime.  None of us were expecting, prepared or trained for it.  The next few months will be fast changing and uncertain, but here are my top tips right now for giving your business a better chance of surviving the crisis.

  • Focus on cash. Don’t worry about profits, turnover, any other measure that might have been important in the past, only cash matters now.  Look for every opportunity to retain cash within the business; to maximise incoming cash and to reduce / defer outgoings.Analyse all your outgoings – what’s essential for the continued survival of the business, what isn’t?  Reduce, defer or cut entirely the latter, including your own remuneration.  When cutting, be brutal, and early, but in a way that when you eventually look back, you won’t be kicking or criticising yourself.  Barter if you can.  Focus your resources where they bring the maximum benefit.Treat this crisis as one that will last 3-6 months.  Produce short and medium term cash flow forecasts and ensure everyone in the business works hard to stick to them.
  • Remember you are not alone. Everyone is in the same boat.  Try not to feel overwhelmed.  Don’t panic.    Take short steps, small actions, not big leaps.  Talk to and watch what others do in and outside of your sector.  Take support and ideas for dealing with this crisis from anywhere and everywhere you can, no one has the complete answer.   Ask that experienced NED you’ve always respected for support now.
  • Ask yourself, what’s going to bring this business down, and which of my competitors are going to survive and why? Ask yourself what you can change quickly, and how to be that survivor.  Be bold.  Seek out new ways of operating.   Don’t hold on to the ‘old’ ways of doing things – CV is a game changer.  Put every option on the table.  Be innovative and flexible.  What ‘new’ technologies can you use?
  • Your people. Make decisions on an individual staff member basis, following Public Health England advice as a minimum, deciding who is needed for those aspects of the business that are critical to its survival, asking about and working around their personal circumstances, considering home working, and planning  for any extended absence from the business.  Create an overall plan which sees increased teamwork, work and knowledge being shared, making the business stronger and less reliant on certain key people.  A one size fits all policy will not work.  Don’t try it.  Trust you staff, give them increased responsibility – you should not be employing them if you can’t trust them.  Being shown as the caring employer now will be remembered later on.  Here’s a link to a lawyer’s guidance on dealing with employees.
  • Work with your key suppliers and customers. Ask them what they are doing, how you can work together to get through this.  Copy JCB’s way of working with suppliers – if they see a supplier hurting, they help, not look at it as an opportunity to make a one off profit.  But have a plan for if they go bust.
  • Communicate more… with everyone who’s important to your business… your customers, your suppliers, your staff, your funders. Remember that they too are probably experiencing the same things as you are, having to make similar, often tough, decisions.  Reassure them and be honest, open and realistic.
  • Grab all the government support you can get. HMRC have been told by the government to support companies effected by CV.  A hotline has been set up to ask for a time to pay arrangement.  0800 015 9559.  Use it.  (Update 20/3/2020 – click here to go to the government’s summary of the help they are giving).  Update 23/3/2020 see below this article the Birmingham Chamber’s summary of what’s available and what’s coming.
  • Don’t let your guard down. For example, if your staff work from home, ensure you remain protected from hackers – they will be looking to take advantage of any weaknesses now.
  • Document your decisions in case your plans do not work out and an insolvency practitioner is appointed down the line and looks at what you’ve been doing.
  • Think about a formal insolvency process only as a last resort – all insolvency processes damage the business, everything you’ve worked so hard for. But if you do need some insolvency advice, call or email me 01902 672323 or paul@midlandsbusinessrecovery.co.uk

Click the following for Birmingham Chamber support summary:

government-support-for-businesses-coronavirus-covid-19

Paul Brindley

19 March 2020

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