How To Be a Solvent Business During COVID-19
As we expect the coming year/s will be tough for the business. It is really crucial that businesses should plan their activities very carefully and prudently.
If you have managed to retain profits in your business this fat-on-the-bone will help to see you through loss making periods as we endeavor to emerge from COVID disruption, hopefully, later this year.
How long these reserves may last depends on how effectively you manage the process.
If you are impacted by COVID disruption, you will need to ensure that you avail yourself of any Government funded grants via your local authority and wage costs can be 80% covered by the extended furlough scheme. But these will not cover all your fixed costs.
Accordingly, planning is absolutely vital.
You need to figure what your short-term prospects for trading are likely to be and then quantify the minimum level of costs that you will need to carry in order to meet:
Existing fixed commitments, rent for example, and
Other variable costs to deliver any future trade.
If these calculations reveal that you will be trading at a loss for an extended period the only way your business can survive is if:
Your retained profits and personal capital introduced cover these losses, and or
If reserves are exhausted, are you prepared to borrow funds – Government bounce-back loans for example – to fund the excess losses?
We are helping business in devising a business strategy that will ensure that thee business survive during this crises times.
Feel free to contact us to book an appointment.