Companies across Northern Ireland should start preparing a plan to resume business once they are able to start trading again, it’s been claimed.
The SME Support Forum, set-up by law firm, McKees, accountancy firm Harbinson Mulholland and financial services practice, Kerr Henderson, is advising businesses to start preparing a ‘business resumption plan’ now to ensure they are in the position to start trading once the Government’s exit strategy is announced.
“Most people are currently firefighting to save their businesses, and accessing the relevant government support schemes,” Chris Ross, managing partner of McKees, said.
“However, we must not lose sight of the weeks and months ahead. It is vital for business survival once the government announces the exit strategy, to make sure there is a plan in place and the necessary resources available to resume trading. Don’t wait until the time comes because you will have lost vital time and it could then be too late.”
The group says firms should “take the time now, to prepare your business so that it is ready for whenever there is an easing of current restrictions and able to function in the future. Look at what steps you will need to take in preparation for the exit of lockdown – consider the areas you need to plan for including cash flow, communication planning, both internally and externally, staffing issues, for example furloughing and when is the right time to bring back furloughed employees, supply chain issues, credit risk analysis and social distancing measures”.
As part of the SME Support Forum, McKees, Harbinson Mulholland and Kerr Henderson have been providing local businesses with free support and guidance at this unprecedented time, and from the feedback we have received, people need help with the steps and action they should be taking now.
Some of the steps include:
- What will your business look like after lockdown? This should include several assumptions and different scenarios depending on how the government exit strategy is rolled out in the weeks and months ahead.
- What resources will you need to start trading again?
- What do you need to do to have your supply chain ready?
- It is likely that social distancing will be in place for some time, what will you need to do to ensureyour business can enforce/manage this?
- Check your insurance policy to see if it includes Business Interruption Cover and if so, consider what information is required to initiate a claim.
- Communication is key, with your employees, bank, customers, suppliers and stakeholders.
- Look at your manpower. In preparation for a return to some level of normal activity you may wish to bring some furloughed employees back into work. Remember that employees can be furloughed multiple times, but each separate instance must be for a minimum period of three consecutive weeks.
- Cash is still king. Continue to prepare weekly cash flows. Assume a baseline of activities continuing as they are now. Work out if your existing cash resources will be enough to sustain the business for the coming months after accessing the government support initiatives of the job retention scheme, the grants for small businesses, deferred VAT and self-assessment payments and CBILS lending.
- Having carried out the above base line analysis, consider if you have sufficient working capital for resumption of business activities. Operationally once you start to bring staff off furlough do you have the working capital to pay them until your income starts to flow again? If not, you may need to go back to your bank for further credit or consider other ways of bridging this gap.
- Review key contracts with customers and suppliers to ensure you understand your duties and obligations. Each contract will need to be carefully considered to ascertain the impact, if any, that Covid-19 may have. The current crisis may excuse or postpone the performance of certain contractual obligations.