How can businesses in Tier 3 ride out the lockdown storm?
27th October 2020
As businesses across Sheffield and South Yorkshire ride out tier 3 restrictions to mitigate the spread of Covid-19, what key advice should companies take on board to survive the Covid-19 storm?
Sheffield City Region mayor, Dan Jarvis, drafted an open letter to residents, backing the decision to elevate the crisis level, calling it a ‘much-needed measure’ to curb the spread of the virus. As the countdown begins for winter and the festive season, businesses need to recharge and remain poised to relaunch business operations at short notice.
Tier 3 lockdown restrictions order the closure of non-essential businesses, such as pubs and bars that do not serve substantial meals, betting shops, adult gaming centres, casinos and soft play centres. Many pubs and bars are developing creative ways to avoid temporary company closure, such as introducing Covid-19 exclusive menus. If your business is subject to closure as a result of Covid-19 restrictions, here are some of the ways you can gear your business for its reopening.
Plan your exit out of tier 3
As Yorkshire enters a new wave of restrictions, Communities Secretary, Robert Jenrick, stated that "the restrictions we have agreed together will only be in place for as long as they are absolutely necessary. They will be reviewed jointly in 28 days’ time.” Focusing on crafting a relaunch strategy for your business, reviewing your inventory and replenishing stock can help you meet any surges in demand following the one-month pent-up period.
The housing market accurately illustrated consumer response following six weeks of compulsory closure, leading to the overwhelming outpour of demand after the reopening of the sector. The industry is operating at a slow crawl following the withdrawal of competitive mortgage products, supply chain delays and material restrictions, however, it continues to be on the receiving end of unprecedented demand.
The coronavirus pandemic has led to the unfortunate demise of businesses across all sectors, from independently operated shopfronts to veteran, household names. Check-in with key suppliers instrumental to your service delivery to ensure that they are still in operation, if service delivery is delayed and if stock is widely available. This reduces the burden on your business when preparing its reopening, helping you beat any surges in enquiries from other customers.
Conducting business health check
If your business has been ordered to close, it is instrumental to keep a close watch on the financial health of your business as liabilities and business maintenance costs continue to mount. Although your shopfront may be closed, your business may still be exposed to financial pressure, resulting in slow company deterioration and eventual insolvency if left ignored. Conduct a health check on your business to ensure that it has sufficient cash to survive the Covid-19 tier 3 shutdown/trading restrictions.
If your business is struggling to keep up with payments, a Time to Pay arrangement can help restructure tax liabilities into affordable instalments. If you require urgent breathing space from creditors, negotiating a payment plan through a Company Voluntary Arrangement (CVA) can provide the necessary relief to your business. It’s common for businesses to suffer from poor cash flow due to insufficient credit control measures, resulting in the accumulation of bad debt. A simple restructuring of your credit control strategy may help speed payment delivery and recover funds from unpaid invoices.
By forecasting your chances of survival, you can make the necessary changes to streamline business operations and minimise outgoings, protecting the viability of your business during the tier 3 lockdown.
Accessing Covid-19 financial support
In addition to initial support measures unveiled by the government, such as the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Job Retention Scheme (CJRS), the Winter Economy Plan consisted of further support to help Covid-hit businesses weather the winter months.
The Job Support Scheme which comes into force on 1 November 2020 following the closure of the CJRS is designed to protect viable jobs, ensuring workers receive 77% of their typical pay, depending on the hours worked.
The Coronavirus Local Restrictions Support Grant provides support to eligible businesses required to temporarily close due to Covid-19 local lockdown restrictions. Your business will receive a cash grant between £1,000 and £1,500 for each three-week period your business it is required to close, depending on the rateable value of your business and eligibility.
The future success of your business will be determined by a combination of financial caretaking efforts between the company director, an accountant or licensed insolvency practitioner, and the local Covid-19 infection rate which determines trading restrictions. If you suspect that your business is no longer viable due to existing issues or as a result of the coronavirus pandemic, get in touch with an experienced licensed insolvency practitioner to protect your financial position from further worsening.
At Begbies Traynor Group, UK’s leading provider of corporate insolvency and restructuring services, they have a dedicated confidential advice line for distressed directors. Contact Kris Wigfield, Partner at Begbies Traynor Sheffield on 0114 275 5033 or email email@example.com for a free business consultation.