5 Ways To Help Rebuild Your SME After COVID-19
It is evident that COVID-19 has caused both financial gain for some industries, yet put financial strain on others and this financial strain is very visible in many SMEs. The COVID-19 pandemic has even caused some SMEs to have no choice but to stop operation.
In this article, we will discuss five tips on how you can rebuild your small business following on from the effects of the COVID-19 outbreak, including analysis, financial support, business planning and future preparation.
1. Assess How COVID-19 Has Financially Damaged Your SME
It’s a no brainer that the main issue caused by the COVID-19 outbreak for your SME is the financial damage as operations may have slowed down or completely come to a stop. Therefore, it’s crucial that this financial damage to your small business is assessed as soon as possible. The best way to do this is by updating your financial statements as soon as possible, including profit and loss and cash flow statements.
Analysing your SMEs profit and loss and cash flow statements during the COVID-19 outbreak, even if you can’t operate, means that you can compare to this time last year. This way, you might realise that the financial damage isn’t as bad as you thought it was in the first place. However, if it is, you are now able to assess what, when and where it all went wrong.
Other financial factors your small business should consider is that you might have to think about the potential of laying off some of your employees, having to cut your marketing and advertising costs or even your customers/clients shifting towards a competitor. Once you have assessed the financial damage that COVID-19 has caused your SME, you can then easily plan for the future.
2. Does Your SME Need Financial Funding To Recover From COVID-19?
After identifying the financial damage from COVID-19 on your SME, you might want to consider financial funding to help with the recovery process. The government has now made this available for small businesses in many forms, from job retention to loan schemes.
The Coronavirus Job Retention Scheme
You have probably heard the majority talking about furlough and the government’s support with employee salaries. Well, this is known as the Coronavirus Job Retention Scheme. The Coronavirus Job Retention Scheme involves the government supporting all UK employers by helping pay 80% of each employees salaries. The Coronavirus Job Retention Scheme is now running until the end of October under the circumstance that all employees will be asked to pay a percentage of their part time employees salary from August onwards.
To find more information about the Coronavirus Job Retention Scheme and if your small business in the UK is eligible, click here.
Coronavirus Business Interruption Loan Scheme
Another type of financial funding offered by the government for your small business during the COVID-19 outbreak is the Coronavirus Business Interruption Loan Scheme. Run by The British Business Bank (BBB), this allows SMEs to have access to loans and overdrafts from the bank. This Coronavirus Business Interruption Loan Scheme will help any SME with a turnover of up to £45m to access financial funding of up to £5m and any interest payments will also be paid by the bank for up to a period of 12 months.
If you want to get more of an insight into the Coronavirus Business Interruption Loan Scheme for your small business, then have a read of our blog post here all about the conditions and how to apply for this type of financial funding.
Bounce Back Loan Scheme
If your small business is still having to operate and is in need of cash instantly, then the Bounce Back Loan Scheme could be for you. The Bounce Back Loan Scheme is allowing UK SMEs to get access to a loan from £2,000 to £50,000 in just a matter of days by simply filling out an application form online. The Bounce Back Loan Scheme for your small business is interest free for the first 12 months and no repayment is needed for the first 12 months either.
To sign your small business up for the Bounce Back Loan Scheme, you can find out how to here.
3. Analyse Your SMEs Current Business Plan During COVID-19
Even though your SMEs business plan might have been ideal in the past, the COVID-19 pandemic probably means you need to make some slight changes. This is when you should identify your SMEs previous strengths that might be weaknesses now, and how you are going to turn them back into strengths.
For example, one of the biggest ways your business plan could have changed during COVID-19 is the increased amount of online shopping. Now everyone is isolating at home, online shopping is becoming even more frequent. So, if your small business relies heavily on its brick and mortar traffic, you might want to introduce a more online based future business plan.
As well as analysing your SME itself, it’s also helpful to analyse your overall business industry and how that has been affected by COVID-19. This way, you can identify the downfalls caused by the COVID-19 pandemic, but also what opportunities, such as new gaps in the market that your competitors haven’t satisfied yet.
4. Create A Rebuilding Timeline For Your Small Business
The COVID-19 pandemic might have affected a large number of factors in your small business. Therefore, your new business plan will feature many different changes that you will want to put in place all at once. However, this is not realistic. The best way to manage your new business plan post COVID-19 is to create a rebuilding timeline for your SME which features all priorities first.
For example, if you are in need of financial funding, this is going to be your main priority because without this government support, you might not be able to pursue your future business plan.
5. Has Your SME Prepared For Any Future Crisis’?
Although the COVID-19 pandemic might seem like a one time event that is unlikely to happen again, the fact is it happened so unexpectedly in the first place and there could be another outbreak or a different unexpected circumstance in the future. Now that you have learnt from the effects once, ensure that you use this to help you manage your small business correctly next time.
Some examples of preparing your small business for any future crisis could be keeping non-essential spending low, paying your debt sooner rather than later or ensuring all employees are able to work remotely in future if needed.
Does Your SME Need Financial Guidance During COVID-19?
If you are an SME that has been affected by the COVID-19 pandemic and need guidance on how to manage the financial effects, Stonehouse Accountants are here to help. We can offer you advice and guidance on what type of financial plan, support or funding is best for your small business to aid its recovery and where to start. Go ahead and contact our financial experts here or call us today on 01733 265888 for more information.