Please listen carefully, this is a safety briefing

Remember when we used to fly away to exotic places on holiday? 

Well maybe we didn’t appreciate how exotic they were at the time but now? Well Benidorm seems exotic compared to a whole day spent inside our home offices.

As it’s the weekend and we all need a break from delivering or absorbing technical news, the marketing department allow me to go rogue so I started thinking about the June holiday I won’t be going on this year and the inflight safety briefing I won’t get to hear. 

So just in case you’re also pondering aspects of life that are going to be on hold for a long time, I thought I’d remind you of the contents of that briefing you never listen to properly but have heard so many times. And along the way how they might correlate to the situation that we as small business owners find ourselves in currently.

The Safety card in the pocket of the seat in front

Yep, the one you always have to move to wedge in your bottle of Oasis and family pack of Maltesers. No? Just me then. Anyway, that laminated card that tells you what to do if it all goes wrong. 

What’s the equivalent in this situation? Well the simple answer is there isn’t one. It hasn’t been written. As an Aussie friend of mine said this week (although I think he was quoting someone else) “there has never been an economic situation in history where supply and demand have collapsed simultaneously”. In years to come, there will be analysis of the current situation and we might all work out what we should have done. But as it is, we’re winging it (no pun intended) so you better listen to the rest of the briefing.

Fasten your seatbelt

Ok so now we’re in business. The first thing you should be doing is looking at your personal finances so you’re ready for whatever is to come. Cut out unnecessary costs, get a mortgage holiday (apply online because you’ll never get through on the phone), work out what other income is coming in (from other adults living in your house) and calculate what you need to live on. 

Your business could be struggling for at least 6 months. From this, you’re ready to work backwards to a break-even point. Ask your A4G Client Manager if you’re a client and you need some help. Alternatively, it might be more appropriate to put your business into hibernation for a few months. Time to “turn off that electric device” and do some self-improvement maybe. 

Look out for the oxygen masks coming down from above. Pull the mask towards you

The good news is that you’re still airborne at this stage but clearly we’re in a bit of trouble. 

But there is oxygen coming from above. Reimbursement of wages for furloughed staff and you if you’re self-employed, grants for those in the hospitality business and any companies who benefit from small business rates relief. This will help you breathe for a bit.

Make sure your own mask is correctly fitted before helping anyone else

This might be most important thing of all if you are the leader of your business. You must look after yourself both physically and mentally. Eat healthy food and take daily exercise. Find something relaxing away from everyone else.

You need to be in good shape, not just to lead your team through difficult times but to fight off if the dreaded Covid19 if you are unlucky enough to catch it.

The life jacket under your seat

No matter how much pruning of costs you do and how inventive you are at generating new sources of income, it’s possible that you will still not be at or above your break-even point. If that’s the case, then it’s likely that you are going to start to reduce whatever cash reserves you have. 

There is help available in terms of deferring leasing payments, next quarter’s VAT bill and time to pay for other tax liabilities but these will need to be paid eventually. And if those are not sufficient, the Business Interruption Loan Scheme may be able to help if you can get through to your bank manager!

Brace yourself

It’s possible you may need to make an emergency landing in the form of a visit to an Insolvency Practitioner. We have a nice one that we recommend to clients when all else has failed. 

And don’t think that means that business is over. You may be able to do what is known as a Creditors Voluntary Arrangement or worst-case scenario buy the assets of your existing business and start a new company. We’d like to think it won’t come to that. You don’t need to put your head between your knees though. That would be taking things a little too far.