Things are changing as we begin to get back to work and for some businesses, the landscape has changed dramatically. This will, we believe, become more evident as government funding reduces for many larger SMEs.
From this month, a company can offer ‘flexi furlough’ to their staff and bring them back part-time. From August, employers will have to pay NI contributions and pension contributions for their workforce. From September the government will reduce their wages contribution to 70 per cent and then to 60 per cent in October. The scheme ends in its entirety on October 31 (subject to the Covid19 situation).
Whatever changes business owners or directors are considering – cash flow and financial management will be critical to survival and growth. As July starts, now is the time to put a plan in place to survive and thrive as best as one can over the economic recession.
One of the things you may be looking at as a business owner with a team is what premises do you need? Are those premises still fit for purpose?
If your business has grown during this period, you may be considering getting new premises or increasing the size of your warehouse or factory. Or have you realised that some back-office staff may be better off working from home, and you want to offer that flexibility?
If your company workload has dropped during this time, you may as a board feel that the time has come to contract and get rid of some office space when you can – perhaps having some of your team working remotely permanently.
All of this will require financial planning from investment to intelligent borrowing, through to exiting leases, expenditure on technology solutions or ensuring a staff home office is fit for purpose and secure.
One of the biggest challenges for larger businesses will probably revolve around staff. The first one may be redundancy.
A business which has struggled may need to reduce its wages bill and directors may need to consider that as the government contributions start to reduce from August 1. With less work, redundancies may be on the cards. Working out the financial implications of this will be critical and also emotional – an impartial view may be helpful so that these difficult decisions can be made with all of the relevant and up to date information.
On the other hand some companies may find they want staff to return and some cannot – they may still have home-schooling commitments which means they need to stay at home and they cannot be a functioning member of the team. This needs to be addressed now.
There may be some staff members who are told to come back to work but don’t want to -they may not be convinced they are safe and are too afraid.
Also, some may want to leave your employment – lockdown may have made them reflect on what they want from life and you are not part of that future plan. If this is a senior member of the team then recruitment needs to be considered now.
We believe your people are so important to success that this all needs to be managed with care and compassion – we are experienced in helping companies navigate finances through choppy waters.
Lockdown may have shown up inefficiencies in your systems and processes which you and your fellow directors need to address. You may have not embraced tech beyond adopting systems when you’ve had no choice.
While working remotely, you may decide that certain functions could now be outsourced more cost effectively – like financial management, telephone answering, customer service, PR, marketing.
Or you might want to invest in new software or tech to make your company more efficient and just smarter. You may want to be ready to cope if an event like this pandemic comes around again. Indeed, you may want to take out ‘pandemic’ insurance or get a clause in your existing insurance to cover it.
That will inevitably lead to conditions being imposed around security, tech and cyber security and an ability to prove that you are ‘pandemic proof’.
All of this will require investment and planning and should be part of a discussion with your financial advisers.
If this has not happened and you feel you need professional advice and ongoing support please email us at firstname.lastname@example.org and let’s talk.