How can businesses cope with the effects of the coronavirus?
The economic impact of the restrictions announced by the Prime Minister on 23 March is being increasingly felt across virtually all business sectors. The instructions to stay at home, the closure of leisure and hospitality businesses and the limit on all face-to-face interaction has caused a financial earthquake. Three days later and ground is still moving under our feet as business owners start to count the cost of the government’s attempt to slow the spread of the coronavirus and protect those most vulnerable to the virus.
Many companies have seen business dry up overnight. Some may be, on the face of it, better placed than others to cope with the weeks – if not months – of turmoil ahead. Others may have been struggling even before the current crisis unfolded and are now simply unable to cope with the current situation.
The question that we are being asked by business owners is: what should I do?
The starting point is that every business is different so there is no ‘one size fits all’ approach to saving struggling businesses. Much has changed in the past few days, but that principle remains as the central pillar and is the starting point for everything that Graywoods does as a firm. However, there are some key points that every business owner must bear in mind as we feel our way forward through the current crisis.
We normally say that it is vital to take advice at the earliest opportunity and to act quickly to avoid the situation getting out of hand. We know that many business owners already feel overwhelmed and simply don’t know where to start. Our advice is: as always, talk through the issues with a trusted advisor who has experience of dealing with financial problems. We are here to help.
As the situation is unfolding quickly, we are taking the view that businesses will broadly fall into three categories:
Firstly, there are some organisations that will be largely able to continue as before, because they are able to work remotely and/or their products or services are still in demand. These include logistics and supply chain services, as well as food producers and the FMCG sector.
Secondly, there are some businesses that were struggling prior to the emergence of the coronavirus and for whom the past few days have been the final straw. These businesses need to explore the turnaround and insolvency options that are available to them, although for practical reasons it may take a few weeks for the correct procedure to be started.
Thirdly, there are those businesses that have seen a sudden and dramatic drop off in business, entirely due to the measures introduced by the government to counter the spread of the coronavirus. To those businesses, we are able act as a sounding board, to talk through the issues and to help with formulating a pragmatic and realistic response, with the aim of keeping the business going or effectively mothballing it until more normal trading conditions return. As the detail of the government’s support measures becomes clear, we will be better able to advise companies on their options.
The UK, like much of the world, is currently in lockdown but when it ends, the long-term economic wellbeing of the whole country will rely on businesses being able to dust themselves off and bounce back. The country needs everyone to do their best at a time like this, and Graywoods’ promise is that we will do our utmost to counsel and advise business owners who are worried about the future, to rescue struggling businesses, and to do our bit to ensure the economic turnaround of the country.
If you would like to discuss how Graywoods can help, call us today on 0114 285 9500. We are here to listen, to advise and to help.