The Easy Part Has Now Passed. Whilst we won’t deny the fact that the past few weeks and months have been challenging; as we fast approach a further announcement regarding the potential easing of lock down, more troubled times await us in the business world.
I have said on a number of occasions already that the business curve is most definitely behind the health curve and will be very different to it also.
We don’t say this to make people feel uneasy as we want to remain calm, but we don’t want people to grow complacent over the coming weeks and months. To maintain this calm, we must retain control to the best of our ability and that means not letting up as we strike back against the current challenges that we have faced and those that still await us.
Let’s first start with some fairly obvious issues that lie ahead:
- These Government-backed loans will need repaying and whether they are 80% backed or 100% backed, if they are not repaid, it will impact your credit rating as a minimum.
- Aside from the loans, the Government has provided significant financial support such as local authority grants, furlough payments, self-employed grants etc. These will all need to repaid but indirectly; in some shape or form, and we expect this to be via any or all of the following:
- Increase in personal tax rates
- Increase in company tax rates
- Increase in national insurance
- Increase in VAT
Some of these may come subtly through the reduction of some allowances and some may just be in terms of a hike in rates such as a jump in company tax from 19% to 30% would not be beyond the realms of possibility. Whilst it would unreasonable and probably unlikely that these hikes will come immediately; we would be shocked if they don’t come at all, and whilst some industries might benefit from some respite such as hospitality, they may also not benefit at all nor may anybody be given any degree of leniency.
- Whether you have accessed any of the financial support or not, we cannot realistically see any way in which you will not be part of the repaying of it!
There are then the operational challenges that may await such as:
- Suppliers reducing or revoking credit terms
- Delivery timescales for materials being longer
- Staff not wanting to return to work
- Customers delaying orders, cancelling them or wanting extended credit
- All of the above and more!
You might even think a lot of the above might not apply to you but it will impact you in some way or another as prices just in day to day life with regards to shopping are likely to rise!
Our key message and support
The support you have benefited from to date must continue in some shape or form to help you through the times we have ahead. We encourage you to engage with us over the coming days and weeks to discuss this support in greater detail as we grow our team and other resources to be able to deliver this on an ongoing basis for you.
We know concerns will remain and cost will be a barrier for some if not many, but we have worked hard to find solutions to this that we can discuss at the same time.
Remember these two messages
- With the government support to date and the announcements made and pending, they may have whetted our appetite with regards to more positive times ahead, but it will not go far enough to quench our thirst.
- Finally, never forget – calm is the word but not complacency.
Webinars (NOT TO BE MISSED)
With us coming back of the bank holiday we have focused on just the one webinar this week that is ran alongside our software partner that assists with cash flow management.
Cash flow planning beyond COVID-19
Friday 29 May, Midday (book here)
Would you like to have the answers to all of the questions I have raised in the section above?
Join us for this webinar to hear how we as a business have adapted, how other businesses have adapted and how you too could to not just survive but really strike-back!