In short - mostly there is no need to worry despite a High Court decision…
I have found the most difficult factor in making any decisions for my business is the uncertainty of how long the close down will continue and when it is lifted, how long will the economic recovery take, and what will customer demand be both in terms of volume and services required.
If the lockdown was definitely 4 weeks, different decisions would be made than for a lockdown of 8 weeks. The reality for nearly all business owners I have spoken to is the difficulty of deciding whether to close now, as there is no point in continuing to accrue debt/costs, or waiting another few weeks but then finding that decision has to be made anyway, however now they risk greater personal financial implications because of the added debt they have accrued. It is a really tough call. Here is how I have approached it. I have asked myself the following questions:
- What is the cashflow in various scenarios over the next 12 weeks?
- What do I actually know, and what are my best guesses with the information I have? This is primarily around the length of the closedown and the economic predictions.
- How much would it cost to close now, at 4, 8 and 12 weeks? I need to ensure I have sufficient reserves to cover those costs.
- How much am I willing to invest/risk in keeping the business operating?
- What is my willingness to take risk?
- What factors will change my decisions and when will I review it e.g. the lockdown period changes, employees don’t agree to take annual leave or reduced pay.
I write this all down. Firstly because that is how I order my thoughts, secondly it is something I can share with my team, and finally it is evidence for the subsidy and any subsequent decision I have to make that I have considered the variety of factors. If you are approaching your bank it would also be helpful to demonstrate you have completed a thorough business analysis.
Here is a link to the base format I have created which I have made a little more generic so others can use it. You are very welcome to use the format and information, and if it would be helpful to talk your scenario through with me, please call. I am not a business advisor but I am a business owner grappling with the same questions as you, and it can help to talk.
Also here is a link to some government information on continuity planning that may be helpful.