Stepping up in a crisis

It goes without saying that we are all experiencing a time unlike anything else in history. 

Work – and life – as we know it, has become almost instantly unrecognisable, and it looks like it will be staying that way for the foreseeable future. 

And then, even beyond the potential next few months of isolation, the economic impact will be far longer lasting, and changes that businesses are having to make now will have ramifications for years to come. 

Help with government support 

The government has finally stepped up to help – with an ever-expanding support package covering everything from loans and grants to business rate discounts, deferred VAT payments and salary support via the Job Retention Scheme. 

The figures promised are definitely headline-grabbing, but the devil is in the detail with these things and the pressing question is still how easy it will be for business owners to actually access the support, understand all the options and find the best route for them. 

Previously, an accountant’s relationship with a small business might have been fairly reactive, your clients get in touch with particular questions, or you have regular meetings around certain financial crunch points in the year. 

But now, businesses need you to be proactive, to step up and step in. 

They need your expertise. What are the new government loans? What do they mean? What should they be preparing right now to access that funding? 

Having looked at the application form for one of the major high street banks for the CBILS scheme, it is incredibly complex, and coupled with the press around banks abusing the scheme – it’s a potential minefield. 

As things stand, there is still no cap on the interest rates banks can charge. The government is at least iterating and removing the ability for lenders to require business owners to personally guarantee loans of up to £250,000 two weeks in. 

And there’s no quick fix. Banks are swamped with potential applications and questions. The British Business Bank is saying it’ll take weeks not days for funding to go through. Since going live on March 23, it’s telling that in the first 10 days around 1,000 out of 130,000 loan applications had been approved. 

Businesses are going to need help – and fast. 

Dealing with the unknown 

Alongside help with accessing the government’s support packages, general priorities will also have changed for businesses. 

While normally most firms will worry about their topline, right now there are so many unknowns, they’ll be focusing on funding options, cashflow and debtors and creditors instead. 

For a lot of businesses, cashflow will be a huge concern. They may be looking ahead to cancelled events and projects and periods of no work. 

There’s nothing scarier than trying to imagine how you might maintain and run your business without money coming in. 

More than ever, businesses will need help understanding cashflow, how it works and what the key levers are. There may be ways to bring more income in, improve margins, reduce costs and manage payments – it’s just knowing what to do. 

At Fluidly, we’ve expanded our Goal Planner tool, which allows you to plan out different scenarios, including modelling a revenue adjustment, so you can get a sense of the impact certain changes could have on your cashflow over the coming months. Then you can begin to understand what the hard lines are in the decisions you’re making. 

Some businesses may even find the situation isn’t as bad as they first feared, but you need to know where you are today, before you can start thinking about where you might be in another scenario. 

Emotional support 

What’s more, while practical support and advice is key, now is also a time when your clients might need some emotional support, a friendly ear to talk to or even a shoulder to cry on. 

Being a business owner can be lonely at the best of times, but right now, the pressure on entrepreneurs’ shoulders is huge – and there’s some potentially really tough calls being made, and fast. 

The bigger picture 

Companies are having to make difficult decisions to see them through these uncertain times, but it’s really important that the pressure of right now doesn’t outweigh the longer road ahead. 

We could be looking at a challenging economic environment for at least 18 months, so long-term outcomes need to be prioritised – and sometimes an external viewpoint can help you see more objectively. 

The only certain thing is that we are all in this strange boat together, and – as you’re probably experiencing – your clients are going to need you more than ever. 

Caroline Plumb OBE is CEO and co-founder of cash flow management software Fluidly