The current climate is bringing unusual circumstances to everyone. At present, the government seem to be working hard to put lots of different support in place.
I decided that at this time we could all do with some best practice practical guidance on what to do. Now your individual circumstances may mean this isn’t perfect advice in your circumstances but if you need quick action so you can survive and buy yourself some time then here it is…
Now if you have premises and qualify for small business rates relief you will likely get a grant to cover business running costs. If you have staff and they cannot work they you will likely get a grant for staff wages. Finally, we are expecting similar measures for self-employed and possibly directors. All of those measures are currently being worked on but it could be weeks before the money is in your bank.
If you have staff and they truly cannot work then make them furloughed ASAP. This will put them in a position where you can still pay them (full pay or 80% up to £2500 per month) and then get government funding for the 80% or £2500 per month per employee. Here is a template letter you can use to start putting everything in place.
We are stating that directors can furlough themselves based on HMRC’s guidance. You must be doing no chargeable work at all during the furloughed time. You will also only get 80% of your salary. If we do your payroll then please ensure you notify us of your furloughed employees (and directors) and the date started and how much they are being paid (80% or a higher percentage).
I’m advising step 2 is to sort a cashflow forecast. We have a template you can access here and MBS clients will get help in the final stages of it. This will help you map out your pre-corona cash flow, the current worst-case scenario and how to rescue it. I’ve even created a video of how to use the cash flow forecast to plan your cash needs.
Now that you know how much cash you might need and when you will need it you can start looking at funding. The government back loans system details can be found here as well as the full list of lenders here. The cashflow forecast you created in step 2 will be really helpful in securing the funding. Now the important thing to note is that this is a loan. It will need repaying regularly. This does, however, buy you time.
So now you have some time we can wait for the government to release further details on what support is available exactly, how you access it and when it will arrive. As we become aware we will release details of how you can action claims to receive the funding you are entitled to.
I’m a true believer in taking control of a situation and taking action rather than hiding behind a rock and waiting for everything to blow over. The above is a quick and basic guide to give you space and time to think. It’s to ensure you currently act with logic and not emotion. This is not about fear setting in and panicking but securing the future of your business.