As the coronavirus pandemic continues to spread, businesses around the world are facing significant uncertainty. With the forced closure of many companies, both in the UK and further afield, having a huge impact on supply chains, sales and business survival.
Although much emphasis has been placed on how the pandemic is affecting the travel, retail and hospitality industries, a much wider range of sectors face disruption. IT services will likely be hit hard as any large projects or upgrades are cancelled.
To protect themselves, businesses are likely to be cutting costs and managing tasks in-house instead. Business development and relationship building are also expected to be difficult without the opportunity to meet face to face.
With such high levels of uncertainty, both domestic and commercial construction companies are at risk. Many building sites are being forced to close indefinitely to reduce the spread of the disease, and businesses are unlikely to prioritise new building projects as they try to keep themselves afloat.
Additionally, a large percentage of construction workers are self-employed. As questions are raised about whether the Government is doing enough to protect this demographic, many in the construction industry will struggle to survive.
How to Protect Your Business
Although it’s difficult to predict the overall impact of the coronavirus, there are some key steps you can take to minimise risk to your business.
• Monitor your clients carefully
The effects of the virus have the potential to disrupt businesses at all levels of the supply chain, sometimes with severe knock-on effects. It’s important to monitor your whole supply chain and not just direct customers.
• Get in touch with clients and have an honest conversation
By acting fast, you’ll know where you stand and be able to plan ahead.
• Plan and prepare
Be realistic about the situation, and take the time to think about how your business can adapt. Many services can be provided remotely, and there is a lot of technology that facilitates remote teamworking.
• Improve cash flow
Think about the cost-cutting measures you can take to improve cashflow by tightening credit terms, consolidating debt and reducing interest payments to relieve some of the pressure on your business.
• Ask clients to pay outstanding invoices (where possible)
This is particularly important for the self-employed or small businesses, who may need the cash to tide their business over in the coming weeks and months.
• Strengthen your balance sheet
If you can, consider leaving the dividend, for now, keeping some cash and improving liquidity.
• Check your business insurance
As this may protect you if your business has been forced to stop trading indefinitely. Look for Business Interruption Cover in the policy wording, and get in touch with your insurance providers if you are unsure. If you do have business Interruption cover, you’ll need to make sure it includes “notifiable diseases.”
• Get in contact with your bank
Find out if you can apply for the Coronavirus Business Interruption Lending Scheme. The scheme is currently being set up by the British Business Bank and will provide your lender with a government-backed 80% guarantee against the outstanding facility balance.
• Take the time to review your business
This includes thinking about how to reduce unnecessary expenditure. This could mean cancelling subscriptions that aren’t essential or delaying the start of new projects.
• Consider setting up a Time To Pay (TTP) arrangement
Set this arrangement up with HMRC to help you spread out your business tax payments over a longer period. Although the government has already stated that they are waiving late payment penalties and interest for missed tax payments, setting up TTP will provide you with a realistic schedule that takes some of the pressure off your business.
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