While big businesses, supermarkets and giants like Amazon are coping well in the midst of the unprecedented Coronavirus crisis, it’s small business owners that are feeling the pinch more than anyone.
Many small businesses will be looking for news about current tax updates and how to improve finances, as they search for ways to survive the worldwide pandemic.
From furloughing staff to taking out COVID-19 support loans, we take a look at how small businesses can cope with Coronavirus.
There are many ways for small businesses to battle back against Coronavirus. One of the general trends in the accountancy and finance field, for instance, has been to work remotely, setting employees up with video conferencing software like Zoom or Google Meets, that allows easy communication.
Many jobs can transition seamlessly to the remote work lifestyle, but of course, there are many more businesses that cannot do this. If your business relies on face to face customers, you may struggle to do this, while if you don’t have the existing technology and software, the transition to remote work can be tricky too.
Adapt your business model
Ultimately, a lot of small businesses are being forced to adapt their business models, whether they like it or not. Change has never happened so quickly in the UK, at least not within our lifetimes, and the government and individual companies are employing radical changes overnight that in any other circumstances would have taken years to implement.
Now is the time for all businesses to adapt, and small businesses have the opportunity to change their model in response to the crisis. If you’re a restaurant, you can start delivering food, if you’re a lettings agency, you can conduct virtual tours with potential clients via zoom.
These are frightening times, but equally, the opportunity to adapt and to change for the better, can also be taken as an exciting prospect, rather than just doom and gloom!
Delay tax payments
Importantly, the government has been making changes and passing legislation that could potentially help your small business to cope better with the current pandemic, and to help you financially going forward in the next few months when things do start to get better.
One such benefit that small businesses can make use of right now, is a deferral of tax payments. This will help small businesses, as well as freelancers and those in self-employment, free up finances in the short term while sales are down or clients are dropping off.
Remember though, that it’s just a deferral, and that tax will still need to be paid in full in the future. Of course, there’s no interest, so you could see it as a great loan to keep you afloat.
Small business loans
The government is also offering specific loans with low interest rates to small businesses that need more cash to tide them through the uncertain months that lie ahead.
These loans are specifically designed to help businesses keep afloat, but of course, they do need to be paid back in the future with interest, even if it is at a low rate. If you are facing financial disruption, then it’’s never been easier to get hold of a loan to help your business out.
Renegotiate business terms and debts
Businesses can also take the initiative themselves and find ways to cope with the coronavirus on their own accord. One way that small businesses can do this, is by taking a look at their businesses terms, debts and expenses.
A renegotiation of business leases, or contracts might be in order given the current situation, while many banks might be able to provide relief from debts, or a consolidation of debts to help small business owners out. On simpler terms, businesses can look at cutting down any unnecessary expenses, to free up finance for use elsewhere.
If it’s not possible to keep your business open during the pandemic, then there are other options too. It might be that the costs of continuing to trade outweigh the sales you can make, in which case, it’s not realistic that you should keep doing business in the short term. It might simply be impossible for your businesses to trade with social distancing measures in place.
In these scenarios, it’s possible to put your business into hibernation, by furloughing your workers and staff. You can even furlough yourself as a small business owner or director. While on furlough, your staff can’t work, allowing them to remain in lockdown, while your business will also receive 80 percent of their salary from the government.
Riz and Co is a firm of experienced chartered accountants and specialist service teams, offering a wide range of services, including accounting, taxation, financial planning, corporate finance and management consultancy.
Contact our expert staff today, for your free one hour, no obligation consultation, and to find out how we can help your small business through the Coronavirus crisis.