Posted on April 20, 2020  
by Noel Guilford
Yesterday the Chancellor said:

I am not persuaded that moving to a 100% guarantee [of CBILS] is the right thing to do. Some people have made some comparisons with what is going on in other countries. I think when you look at the totality of what we are doing it is more significant in scope and scale.

To which my fellow accountant Richard Murphy replied:

This is utter nonsense. In Germany and Switzerland 100% loans have been available virtually on demand, with checking only to tax records. And the self-employed have been able to access money quickly. In the UK cash flow crises are now pulling many thousands of businesses down and banks will not take the risk in the 20% part of lending that they have to assume responsibility for, meaning the amount of funding being delivered is wholly inadequate and entirely as a result of failure in the government’s design of this scheme.

From beginning to end the UK response looks like a design by a none too successful banker who has ended up as a politician and who has no idea how the real world of small business works. But that’s what we have got in the treasury and the cost of that will be enormous when coupled with the failure of his predecessors to deliver real reform to banking that would have made it the servant of the UK economy once more, which it is still emphatically not.

His last comment relates to the fact that despite all the posturing by politicians after the financial crisis in 2008, the commercial lending sector is still largely unregulated and that the Government and the FCA have little in the way of powers to require that banks lend to smaller businesses now.

What this means is that, despite the rhetoric, many thousands of small businesses are on their own – no-one is coming to their rescue anytime soon. The £10,000 rates grant has been a godsend to many, giving them just enough time to circle the wagons, but now they know that’s it.

Even if they have furloughed staff that is of no help to the business; any cash they get from government will go straight out again. That is, of course, of great help to the individuals concerned but what businesses need is their staff to be working. Support with wages to keep the economy going is what is needed – not to send staff home on 80% pay to sit in the sunshine. Bonkers.

But now you’ve circled the wagons and you know that the cavalry aren’t coming any time soon, what should you do?

Here is my list:

1. Take care of yourself: you are under more stress now that you’ve ever been in your business career. That takes it’s toll. There will be no business if you fall under the proverbial bus. You aren’t superman (or woman) and no-one expects you to be. I know you’re working crazy hours, but make sure you get enough rest and exercise.

2. Sit down and work out a plan – preferably with your coach, accountant or business partner (if you have one): it doesn’t have to be rocket science but a simple plan – written down – covering how to increase cash flow and reduce expenditure, how to keep in touch with customers and how to modify your business model will make a huge difference. You are starting to take back control. Tell yourself that you’re not going to spend any valuable thinking time on the things you can’t influence.

3. Give yourself a break: been working 7 days a week? Yes, me too, so it may seem counter-intuitive but take a couple of days off and enjoy the sunshine. I know you can’t go out so this may have to be in your garden or on the balcony, but 48 hours off won’t make a huge difference to the business but it will to you.

4. Prepare for the ‘new normal’: one day this will be over and the new normal will begin. Be ready. Adapt.

5. Don’t go it alone: it’s lonely isn’t it? But it doesn’t have to be. Find a coach or mentor, pick up the phone and talk to your accountant (he or she probably understands your business better than anyone and can provide constructive advice). You don’t have to do this all on your own.

If I can help you know where I am.

Stay safe.


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Noel Guilford

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