Updated: 17th March 2020
The economic devastation caused by coronavirus continues to be felt by businesses across all industries around the world, but rebuilding is now a priority for business owners and company directors.
So with this in mind, here are a few ways in which you can rebuild your business following coronavirus, return to pre-pandemic profitability, and thrive over the long-term.
Positive cash flow is key to sustainably rebuilding your business after coronavirus. Without cash available to pay the bills as they fall due you remain under threat of insolvency, particularly during this time of continued economic fragility and uncertainty.
Forecasting your cash needs over the coming weeks and months highlights any significant shortfalls and provides the time you need to combat a lack of cash. This could be by improving your own debt collection procedures, for example, or applying for additional funding.
Expert advice can pinpoint any areas of particular concern in your business – maybe costs are too high or you would benefit from improving your IT systems to provide timely management information?
Professional insight from a qualified accountant or a licensed insolvency practitioner (IP) is invaluable when your business has experienced drastic decline as a result of the coronavirus pandemic.
Additionally, you may benefit from help with creditor negotiations either on a formal basis or informally - a professional presence in these negotiations provides greater confidence to your creditors that you intend to repay your business’ debts.
If government assistance is available, it’s worthwhile researching areas where it could help you rebuild. HMRC’s Time to Pay (TTP) arrangement, for example, could offer you additional time to pay any business tax arrears that have accrued, potentially allowing you to rebuild your working capital reserves at the same time.
If sales are improving and your business offers credit, a form of alternative finance that leverages the value of your sales ledger could be appropriate. Invoice factoring and invoice discounting provide regular injections of working capital throughout each month, and are popular types of funding for a range of sectors.
Monies are typically released within 24 hours of issuing your invoices, and you may also be able to outsource your credit control facility – an extremely beneficial option if you’re finding it difficult to collect your own debts. Essentially, invoice finance is a flexible funding arrangement that grows as sales improve, and you rebuild your business.
Various other forms of alternative finance exist in addition to invoice finance, however, and depending how your business operates, they may be more appropriate. Asset-based funding, equity based crowdfunding, or supply chain finance, are just three such alternatives.
Coronavirus rendered large parts of the economy unable to continue due to the lockdown imposed in March and the general social distancing measures brought in, the result being that businesses across the country are now having to adapt to a ‘new normal’ and rebuild where they can.
If you’re a retailer with physical premises but can sell online, for example, it may be worthwhile considering a change in how you operate. Technology has been vital throughout this crisis, and could also hold the key to rebuilding your business.
For reliable independent advice and more information on how to rebuild your business following coronavirus, please contact one of our partner-led team at Real Business Rescue. We offer free same-day consultations to quickly assess your situation and present the best options moving forward.
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