Let’s save money where we can, but what else?
Furloughing employees as part of the Job Retention Scheme is probably the most discussed topic amongst our team and with our clients. Over the weekend HMRC published some very comprehensive notes to address many of the unanswered FAQ’s. Have a look, and if there is anything that is not clear or requires further explanation please do not hesitate to get in touch. For many businesses, this is an invaluable lifeline at this difficult time and I urge you to take advantage of it if at all possible.
Cash and Brand (Goodwill)
Just about all of us who run businesses just now must have two primary goals in their sights – managing the cash, and maintaining (or increasing) goodwill. Here’s some action you can take, starting today.
Maintaining the cash
The Government has introduced many measures to help ‘manage the cash’, perhaps nowhere near as much as we would like, but it is what it is and it’s our entrepreneurial spirit that will help us find a way through the melee and allow us to pick up the pieces when this is all over. Some of those measures we have discussed and will, for the business owners, be a combination of;
– job retention scheme grant to cover 80% of the cost of furloughing employees (or £2.5k whichever is the lower)
– grants for small businesses – that pay little or no rates – £10k
– grants for businesses in the retail, leisure, hospitality category – £25k (where business rates are £15k – £51k)
– VAT due in June 2020 quarter – postponed until March 2021
– payment on Account of personal tax due July 2020 – postponed until Jan 2021
– other taxes (PAYE, Corporation Tax etc) – extensions to the Governments rules for ’time to pay’
– where the business is a limited company – the ability of the directors to furlough themselves when not providing fee earning work for the company, or any services (see comment below)
– if self employed (including partnerships) earning less than £50k – claiming a grant up to 80% of trading profits (or £2,500pm, whichever is the lower)
– a loan, 80% backed by the Government where they also pay the interest for 12 months
– read more about all of the above here
It may hearten some of you to learn that I am having more conversations about opportunities these last few days. The expression ‘every cloud has a silver lining’ appears relevant at this crazy time, and that in no way belittles the monstrous impact this whole matter is having on our economy. In fact, managing the economy is absolutely vital if we are to (somehow) lessen the impact of this virus for many years to come. However, what we must not lose sight of what our businesses look like in, say, 3 years time. Yes I know that we have a huge challenge getting through the next 90 (180, 360??) days but that needs to be put in perspective of where you want your business at some point in the future. If you are clear of the slightly longer term destination, the finding a route there is much easier. The decisions that you make today are clearer. The plans that you draw up will reflect this aspiration. You probably all think I’m nuts – how on earth are we supposed to know what it will look like in 3 years? Well, some things are certain, your best chance of survival is to not ‘let the business go’ but continue to maintain goodwill with your existing (and future?) customer base. This can be done in any number of ways, but I feel it’s important not to disappear off the face of the Earth for 3 months then jump back into the limelight shouting ‘we’re back’. I’m sure many customers will be thinking ‘great, where the hell have you been?’
So I feel it is important we continue to maintain good relationships with our customers and explore the opportunities that lay ahead. It will undeniably be a different World that we return to, but one thing won’t have changed and that is who we trust (unless we give reasons not to trust). If any of you want to talk through some of your ideas and how you might continue to build goodwill with your clients, I’d be more than happy to listen, and throw in my 5 pennyworth.