Coronavirus

Helping SMEs Create a Plan

OPEN HONEST FAIR www. .co.uk

 2 Key Points
Blame
This is not your fault, however, you do need to take action that will
involve tough decisions.

Communication
Now is the time to talk; engage staff, suppliers, customers, landlords,
banks and anyone other business stakeholders.

OPEN HONEST FAIR www. .co.uk

 Understand the Situation
Over the next 6 months
your sales are likely to
drop significantly before
coming back up.

As sales drop, unless

costs change, profit falls Costs
and we must use up
cash to keep trading. Sales

This will eventually run Profit

out. March April May June July August September

OPEN HONEST FAIR www. .co.uk

 Accept where we are
This is the unfortunate reality of the situation
for all businesses. Run your cashflow scenario
with these sales figure decreases:
20% 40% 60% 80%

How long could you keep trading if the

business generated no revenue and you relied
on cash reserves?
1 month, 3 months, 6 months, 12 months?

OPEN HONEST FAIR www. .co.uk

 Preserving Employment
Many business owners have a emotional
attachment to their employees and don’t want
to let them down.

Talk to them and let them know the situation.

When you engage the team they will respond

and want to help, their ideas will help you
safeguard jobs and potentially reduce
overheads.

OPEN HONEST FAIR www. .co.uk

 The Grim Reality

Create asset
YES focussed plan
Will our cash Engage your
reserve see us YES team and explore
through? Can we reduce options
NO costs enough to
survive?
NO Insolvency

OPEN HONEST FAIR www. .co.uk

 Asset Focussed Plan
Preserve your assets to trade through and beyond…
Assets Include:
• People
• Culture
• Customers
• Distribution channels
• Suppliers
Focus on relationships and communication with all the business’
stakeholders.
Payment Breaks
Talk to your bank, landlord and finance partners to look at short term
financial relief.

OPEN HONEST FAIR www. .co.uk

 Cost Cutting Strategy
This is a short-term strategy that allows the business to remain solvent.
You may have to let staff go and reduce your product/service offering:
• Where can you be saving money across the business?
• Can we reduce staff hours to avoid redundancy?
• Are there any slow product lines we can cut?

Insolvency
The option we all want to avoid but sometimes it is the only choice. If
there is no viable route forwards then you should consider liquidating
the company before you deplete the reserves.
OPEN HONEST FAIR www. .co.uk
 What Should you do?
What you decide to do should be an informed decision based on the
context of your unique circumstances.
Every business is different and will require a different approach.
However, you should always put things into context.
Why will we be affected?
What is the potential impact?
How can we plan accordingly?

OPEN HONEST FAIR www. .co.uk