Businesses –

Coronavirus: Operating in a New World

Four weeks ago, the prospect of a coronavirus outbreak was a spectre that most of us eyed anxiously on the horizon. For many, its rapid emergence into the foreground has been all-consuming. These are uncertain times, but there are steps businesses can take to mitigate their current challenges and expedite their recovery.

Published

20th May 2020

Author

Stephen Fletcher

Category

View of empty Westminster Bridge

Protect

This is a time of national crisis. A quick glance on social media teaches us that businesses who are not following guidelines face a serious reputational risk. Putting the safety and interests of colleagues, clients and suppliers first is paramount. It means listening to the experts and doing our bit to ‘flatten the curve’ by helping reduce the exponential growth of reported infections. The quicker we abide by the current restrictions, the quicker business can start to return to normal.

At Arbuthnot Latham, we have followed government guidance closely and before the situation escalated, pre-empted the current restrictions by asking colleagues to work from home. This was a huge undertaking behind the scenes, but much can be achieved with the right energy committed to it. There are, of course, challenges posed by changing how you work, but these can be mitigated.
 

Communicate

Everyone is adjusting and few will expect things to carry on as before. Communication, therefore, is key. There are two strands to this:

Colleagues want to know that you value them. Few can have escaped the reports of imminent economic decline and many will be worried about their future. No one knows exactly what is to come, but letting staff know they are valued does not just engender a common sense of purpose, it can also drive productivity by keeping the workforce motivated and informed.

Equally as important is communicating with customers and clients. Many businesses will not have finalised their contingency and procedures, but transparency and honesty is vital. Be up front about service disruptions as you are working to fix them. Clients are good dealing with what they know; frustration comes when there are unknowns, so manage expectations where you can.
 

Retain

The Government has announced an unprecedented package of support for businesses. Perhaps most important is the Coronavirus Job Retention Scheme, which offers an element of job security for employees. If you can keep your staff on, do so. It will give them a sense of security at a time of crisis and save you recruitment costs and precious lost time when things return to normal. Other schemes such as COVID-19 Commercial Financing Facility (CCFF), VAT deferral and Recovery Loan Scheme (RLS) could be right for you, so find out about what support is there for you. This information is always subject to change so it is best to get the latest information form the dedicated government website.
 

Plan

It is worth considering contingency plans for disruption to working practices and services, logistics and distribution. Have you recently made enquiries about the rigour of your suppliers’ contingency plans? It is definitely worth reviewing your supply chain to identify if an over-reliance on any one supplier could slow you down in the event that their services become disrupted.

Also, make sure you develop a plan for the worst-case scenario. Decide on your priorities and carefully think through your course of action. Executing a plan is much more effective than improvising in a panic, which undoubtedly leads to mistakes and oversights.
 

Test

Take time to review your current expenditure. It is definitely worth stress testing cash flow in the event of services being disrupted, such a reaching out to HMRC for flexibility. Only by having clear and defined oversight of business critical expenditure and non-business critical costs, can you start to develop a plan to maintain liquidity. Part of this testing means identifying the most profitable lines of business, having a clear idea of your financial cushioning and reviewing your borrowing options.

Author -

Stephen Fletcher

Stephen Fletcher

Deputy Chief Executive

Stephen is Deputy Chief Executive with responsibility for Arbuthnot Latham’s client-facing business teams. Arbuthnot Latham offers banking services and wealth management as well as specialist finance solutions for individuals and businesses through its subsidiary businesses, Renaissance Asset Finance, Arbuthnot Commercial Asset Based Lending and Arbuthnot Specialist Finance Limited.