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The Government has been praised for its swiftness of response and for its generous allocation of funds to help small and medium sized businesses to get through the challenges caused by Covid 19 and the long haul back to a more positive economic period.
For once the Government is acting at speed and the bounce back loan application is simple and quick allowing SMEs to access much need cash in a matter of weeks and sometimes days, depending on their business banking provider.
An injection of cash for smaller businesses is a much welcome boost but my advice would be to take a step back and have a plan on how you are going to use the funds to effectively relaunch.
As businesses come out gradually from lockdown, they will notice a very different landscape than before.
- If they are dealing directly with consumers many of them will be worried about their futures as their employers may look at scaling down workforces to reduce costs and return to profit.
- On the positive side many people with disposable income are waiting patiently to have their new bathroom or kitchen done so there could be a surge in demand for these trades. Also, as the housing market picks up so the demand for furniture and furnishings will return, although there may be a move to more careful ‘shopping around ‘to save money.
- If they are B2B some of their customers may have disappeared as they couldn’t stand the cashflow drought of a couple of months and have simply folded. This of course offer opportunities for those who do survive to take on new clients and increase their market share.
- In some instances, companies may need to rethink their business model and target market. For example, contract cleaning companies may find that many of their customers are downsizing their office space as they find they can operate with much less and staff working more from home. So, these companies may need to look elsewhere for regular contracts. There could well be a short-term demand for disinfecting and deep cleaning of pubs and restaurants for example.
- Others may have to think about a merger or takeover of another company to ensure they have the size and scale to compete profitably.
How do you react to all of this change and turmoil? The answer is to have a plan. As I say to my clients it doesn’t need to be a long document but a well thought out plan with clear, smart objectives and measurable targets.
Many of my clients have been using the lockdown period to look at scenario planning and I have been running workshops where we look at every option and make sure we are really prepared. The ultimate situation may be different but at least my clients will be ahead of their competition and ready to bounce back positively and quickly.
If you would like any help or advice with business growth, acquisition and transformation, corporate counsel are here to help you with that.