As a company director, you should always be looking forward and taking cautious measures to help your business. There are a lot of areas you need to look at, but for example, if you have recently carried out cash flow forecasts and the coming months are looking difficult, then may now be the time to look at creating a business survival plan. Advisors, Forbes Burton have listed out the different areas you need to consider when creating your business survival plan.
The first step to creating a business survival plan is knowing what your strategy is going to be. Can you manage to keep your business running? Or are you going to need to reduce the business operations until the situation is better? No matter what the answer is, your strategy is the way you are going to reach your objective.
It is always important to think about what external help you can get. For example, can you get assistance from the government? Or could you apply for a specific loan to help you. Quite early on, you are going to need to look at where savings can be made to reduce costs, don’t be afraid to reach out for help with this, as a business owner you may be quite biased to how you run your business, so ask people to assess and advise you.
One of the biggest concerns for business owners is how am I going to pay my bills? This is particularly important right now with the crisis we are all facing. When is it going to end? Try not to panic, as there are ways you can handle your financial problems.
Create a cash-flow budget that lists your fixed and variable costs. Once you have done this, create a list of priorities and work out which costs can be put aside for now and which ones you need to focus on.
No-one wants to have to terminate their employees contracts, but depending on your situation it might be one of your only solutions. Layoffs and furloughs are quite popular at the moment and could be a good step for your business. It is allowing you to save money, but it also means you can have your staff back when things are looking better.
Debt restructuring is one of the most common motivators that we see in business survival plans. You have various options for debt restructuring, one of the main ones is to introduce a Company Voluntary Arrangement. This is a legally binding agreement between you and your creditors. If you are sure that you will be able to make profit again in the future then this agreement will provide you with short-term relief.
Businesses can find it difficult to pay tax, VAT or PAYE when faced with cash flow problems. We recommend that you contact a HMRC specialist who will be capable of deferring your tax payments to HMRC. Recently, HMRC have announced that they will waive penalties for late-payments and mixed tax payments. However, it is important that you make the effort to contact the specialists and don’t just assume that it will all be put in place for you.
Vamp up Your Marketing
Cutting costs down doesn’t mean you have to stop all your marketing activity, but it does mean that you need to stop wasting time and money on things that are not returning you sales. It is really important to reassess your marketing strategy, including social media and your website. Look at what your competitors are doing for their marketing, is there something they are doing that you could be benefiting from? If you are working with a marketing agency, discuss your requirements with them and see if there is anything else they can do to help and support you also.
Businesses After COVID-19
It is quite clear that it is going to take some time for economic activities to return to normal and that the cost of doing business may also increase. Companies are going to find it harder to trade and may need new ways of dealing with the changes. But the most important thing to remember, is that if we all stick together and remain positive then we will get through it.
No one wants to get to this stage, but if liquidation is your final option, then it is important that you seek advice with this. The directors of the company can obtain a free assessment for possible director redundancy pay, and the average payout for this is about £9,000.
Even after you have created your business survival plan and put some of the points into action, the plan is still fluid and reactive so you can keep referring back to it. You can also change areas on it if you feel they are no longer necessary.
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