Government support for businesses during the recent lockdown was unprecedented and has allowed many small businesses to stay afloat during a particularly challenging period. But with the various schemes now entering the wind down phase, and with the main ‘furlough’ scheme due to close at the end of October, how can businesses using the various schemes re-focus their efforts?

Cash is King

We have said this many times over the years, but having an accurate forecast of your cashflow is crucial to a business’s financial health, regardless of how big or small the company is. Uncertainty around a full return to trading, adapting offices to accommodate social distancing and ‘Covid Secure’ regulations and a concern that the public’s fear of contracting the virus will lead to protracted slump in the economy can make financial projections tricky. While it might sound contradictory, focusing on the worse case scenario is key in this instance.

Furlough Reductions

From when the furlough scheme was announced through to the end of July, the state has covered all employee associated costs up to a total of 80% of a salary. From tomorrow, the scheme begins to wind down, with employers due to pay national insurance and pension contributions for all staff on furlough. September sees the state contribution drop to 70%, followed by 60% in October, with employers expected to make up the difference. Many experts have predicted that this is when the true scale of the Corona crisis becomes apparent, with a swath of redundancies predicted.

Address the Downturn

It is a rare business these days that isn’t concerned about a downturn, and actively considering how to address it, while depressing, will help in the long term. Speak to shareholders and directors about how they can help, whether this is by delaying payments or providing cash injections or financial acumen. Speak to people in your supply chains and communities to get a sense of behaviours in their industry and how this could affect your business. Consider re-structuring your company; this could include a review of the corporate structure, re-deploying staff, looking at current assets and financing or perhaps creating a subsidiary company.

Contact Us

At Smith Butler Accountants & Business Advisors we offer our clients a Business Advice service specific to your industry and clients. If you would like to find out more on how we can help you and your business, get in touch via or on 01274 588115.