It certainly is good to see that by July 25, the majority of the local economy’s businesses will be allowed to open their doors again, with gyms and leisure facilities joining bars, restaurants and other hospitality venues.

I know from my own family’s experience – my three daughters are looking forward to opening their business, Utopia Martial Arts & Fitness, after four long months.  They have managed to keep in contact with their customers via Zoom and, indeed, have found new audiences as far away as the USA, enabling them to teach weapons classes to fellow martial artists, so lockdown has not been all bad!

The business community in the Sheffield City Region and beyond will now be working under very different operating conditions. Ensuring they comply with Government COVID-19 guidelines, firms will need to restrict staff and customer numbers in their premises to maintain social distancing, increase cleaning protocols, have constantly updated risk assessments, and use appropriate PPE.

Now we are in the post lockdown phase, it is important everyone helps each other, and we become more patient as we all find our feet in the ‘new normal’.  As we move from Zoom and Teams to more face-to-face meetings, hopefully this will help local hospitality businesses get much needed revenue into our city and town centres and get them buzzing again, plus give retailers a much-needed boost.

While we might have to wear face masks, let’s be positive and see that as an opportunity to get out there once again, as safely as we can so that businesses can recover and we can all move forward – a strong message from the Make Yourself At Home campaign.

It is very important all business owners now look to the future and take steps to protect their businesses and as many employees as possible.  Planning is key, so while government interventions are still available, make sure you have reviewed staffing levels and run budgets with ‘what if’ scenarios – look at various sales levels and how they impact on your profitability and cashflow.

If you look to be carrying too many staff, consider entering consultation for redundancies whilst you still have access to the furlough scheme, rather than waiting until the scheme ends and then having to find the sums to make redundancies.  Look at taking on either a Bounce Back Loan or Coronavirus Business Interruption Loan to give you some additional headroom – they can be repaid with no penalty if not required and are interest free in the first year. Below £250k there are no personal guarantees and you can have multiple £250k loans from different funders without giving guarantees, so worth shopping around.  The loan schemes are scheduled to finish in September so don’t delay.

Having been involved in corporate finance for over 25 years, the one thing that is certain is forecasts are rarely right, therefore make sure you have contingencies in place to cover: lower sales levels than anticipated; higher costs; or higher sales and therefore greater working capital levels.

The old phrase “cash is king” has never been truer.  Lots of businesses run out of cash despite being profitable, so the more scenarios you run the better prepared you will be.  You can always return cash that isn’t needed but if you run out, it can be very costly indeed and quite often results in business failure.

If you own a business and are daunted at the prospects of post lockdown / furlough, please don’t go straight to winding up your business. There are alternatives that may save your employees and also potentially release some cash for you.  We are seeing a lot of these situations at present and I’m delighted to say we have helped to save several companies already and protected jobs.

I hope you have a great summer and hopefully enjoy more prosperous times ahead.

 

Patrick Abel

Corporate Finance Partner

Hart Shaw LLP

patrick.abel@hartshaw.co.uk 

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