To help SMEs make the most of The Winter Economic Plan, Zoe Bailey director and chartered financial planner (CFP) at Tilney outlines a few steps for them to consider.
Research the support on offer
With furlough ending, looking at what other government schemes you qualify for, any expenditure that can be reduced and identifying other sources of income is vital. The Job Support scheme, running from November for six months, is eligible for all SMEs. With the government paying 22% of hours worked, and the rest covered by employers – there is support out there. Small businesses can also apply for a 100% Government-backed loan worth up to £50,000, with no interest charged or repayments needed in the first year.
Explore ways to protect your business should key staff fall sick
Thinking about your staff’s welfare as part of any business plans is also important, as this will help with your preparation and ensures productivity continues should someone contract the virus. Key Person protection has never been more important for businesses to consider. Should an employee fall ill, this policy will pay out a lump sum to the business to help you cover loss of profits and the general costs of hiring a suitable replacement. This will go some way to protect businesses against lost revenues, lost productivity and lost skills.
Keep an eye on the future
The future looks quite uncertain for most people at the moment, so it’s important to have a plan but also accept that it might need adapting at short notice. Cashflow Modelling will help clarify whether you are on track with your desired retirement age and lifestyle or if you need to make changes now. Whether you need to continue working, can keep your preferred retirement date or if you can bring forward retirement thanks to now having a clearer overall picture or innovative thinking and positive sales despite the pandemic – speaking to a professional about this kind of financial planning is a key starting point.
This year has been particularly tough for SME’s, entrepreneurs and smaller independents – and we’re not out of the woods just yet. Indeed, lockdown has forced numerous businesses to rapidly pivot their offerings to survive financial hardships and lack of consumer spending. While the Chancellor’s extension of the Self-employment grant and other business loans will certainly go some length to help, employers need to take their own steps to balance out the financial impact of this year. Having a thorough financial plan of action now and well into 2021 will be key in order to support retaining staff and maintaining productivity, ensuring these businesses continue to thrive as we move into the Covid-19 reality.