It is safe to say that not many people have expected the year 2020 to be as bad as it currently is. The main culprit behind the misery of the current circumstances is undoubtedly the COVID-19 pandemic. The coronavirus outbreak has led to many lives being lost and has also changed the way we experience our day to day lives. But COVID-19 has had a truly severe impact on the economies around the world with no exact date given for when there is going to be a full recovery.
The United Kingdom was no exception and has also experienced a massive hit on its economy. The first problems started to be felt in March when the GDP fell by 5.8% which was then followed by the largest monthly GDP fall in British history: 20.4% in April. In May the economy grew by 1.8% compared to April which was lower than expected by the analysts from PwC. This has led them to estimate the GDP growth for the rest of 2020 to be between -10% to -13%. The worst-hit sectors continue to be the food services, hotel, transport and retail sectors. Experts expect those sectors to shrink by 15% to 25% in 2020 in the best-case scenario and by 25% to 40% in the worst-case scenario.
After reading this, it is ok to be scared for your business’s future but don’t worry! In this article, we will give you tips to keep your business afloat during such turbulent times.
Communicate with Customers
It is essential to keep your customer base informed and updated about your plans. Use social media and emails to tell the customers about the change in working hours, new distancing rules and other important information. It is very important to assure your clients that their needs are still valued even during such rough times and having a strong communication channel with them will do just that. It is important to keep a calm tone with a positive message, using relevant and clear language. Showing customers that you truly care about them will go a long way and will encourage them to keep supporting your business.
Not all of the businesses have been affected by the pandemic in the same way. Some are not doing as bad as the others. What are they doing differently? Learn from the companies that continue to thrive even during this economic hardship. By studying them you will be able to revise your current strategy to maximise the opportunities currently available to you. Also, knowing the situation of your competitors during and after the crisis will put you in the advantage as things will start to come back to normal.
Be Flexible With Your Plans
The COVID-19 crisis is unlikely to end abruptly. The date of when the pandemic stops is unknown and depends on many factors including the development of the vaccine. The businesses should plan for multiple scenarios and should be constantly reviewing their strategy. Don’t be afraid to get a consultation from the experts as it is normal to not know what steps your business should take in the current times. They will also help you develop multiple plans for the future and identify key priorities that should remain of main importance in all your plans and strategies.
Applying For Financial Support
The Coronavirus Business Interruption Loan Scheme (CBILS) was introduced by the British government on 23 March 2020. It is managed by the British Business Bank and its intention is to help SMEs. The loan size can range from £50,000 to £5 million. The first 12 months after securing the loan are free and the government guarantees 80% of the finance to the lender. It must be noted that the borrower remains 100% responsible for the loan to be repaid.
However, not all businesses are eligible for CBILS. There are several CBILS criteria that a business must meet in order to get the loan. As said beforehand the loan targets small and medium-sized enterprises – CBILS criteria define SMEs as companies with an annual turnover of less than £45 million. The main operations of the business must be based in the UK and it must be able to show that it has indeed been severely affected by the pandemic. Also because the least amount of money that can be borrowed is £50,001, businesses must also show that they were not classed as a business in difficulty on 31 December 2019.
To apply for the loan, businesses need to contact one of the accredited lenders. There are currently over 50 accredited CBILS lenders with all of them being listed on the British Business Bank’s website. The documents required for the application will differ from lender to lender and will also depend on the amount the business wants to borrow. The CBILS interest rates also depend on the lender you choose. It is important to mention that if you have been turned down by one of the lenders you should not worry. There are no limits on the number of applications and you can just apply to another accredited lender.