As the economic effects of the Covid pandemic are beginning to hit UK Business, Abbey Taylor have put together this survival check list.
Our MD Tracy Taylor MIPA FABRP has made it quite clear to the Senior Management Team that, “Cash is King” and liquidity in any business will be one of the major factors in deciding if any business is solvent and can trade forward.
Firms must try to balance their working capital and match creditor payments with debtor bills.
Managing your creditor book, you must get your internal credit control up to maximum to increase debtor payments in.
Business owners and FD’s need to keep a clear position between the finance required for the business, look at factoring, invoice discounting and extending an overdraft facility and funding its losses utilising cash reserves and or a loan.
This strategy can be bench marked against the “new” cash flow forecast you have built for the quarter. This will need maintaining and monitoring and will be the basis for the new 12 month cash flow forecast post the cost saving exercise outlined.
Q: Have you claimed; schemes, grants and loans available?
If you haven’t then speak to your Accountant or Abbey Taylor before it’s too late!
How to build a cost saving strategy?
If you haven’t, ask Abbey Taylor for our simple checklist. It gives a with hints and tips on what to review and how to reduce cost without damaging your business.
|Training-related travel costs
|TOTAL Planned Expenses
|Monthly Actual Expenses
|TOTAL Actual Expenses
Build a new cash flow forecast, with your new cost savings and realistic sales forecast.
If you would like support with this we have specialised software and Abbey Taylor’s in house super user can help your business project your business outlook.
Has your business growth been adversely affected by Coronavirus Pandemic?
Depending on your type of business there are various proven options available to grow your business sales and maximise your current customer base.
- Free digital assessment of your website.
- Free fact sheet on how to utilise social media.
- Free advice on opening new channels to market.
How to make real Cost Savings
Freeze All Spending – Review your ongoing costs
Hold off on any “new” initiatives and projects for at least 3 months. Bring in a ban on overtime. Tighten up your expenses policy (no flights, first class travel and bring in a maximum budget for overnight stays).
All Blue-Chip Firms follow this strategy from time to time. Often linked to a “profit warnings” or a major restructure within the bigger organisations. But it works, it buys you time to make the cost saving changes outlined below and gives you a baseline of costs.
You must communicate this effectively but with a positive tone, to all colleagues face to face, explaining what you are trying to achieve and why. You will receive some difficult questions but answer them honestly and reiterate the importance of a stable financial position for the Company during these difficult times.
Utilities – Gas Electricity Water
If you’re not sure when you last switched, then switch now U Switch or Love Energy Savings. If you are tied into a fixed deal check the contract. You can often switch with the same provider in the last 12 months of a long fixed contract.
Mobiles, Telecomms and Internet – Broadband, Cloud and Calls.
Review your current packages, check your contracts and switch. You might be offered far better rates just by calling up to “cancel” with your incumbent providers. We recommend The Business Mobile for huge savings and we use ETI Cloud for managed services Telco/Wifi.
Look at your lease agreement, is it up to date? If your Company is on a “rolling” contract ask the Landlord about a rent review. Check if you’re paying buildings Insurance to the landlord (common with multiple occupancy offices or business units) if so make sure your not paying twice.
Insurance – Buildings & Content, Company Car, Professional Indemnity, Group Life Schemes.
Do Not Auto Renew! Time for action…. Get all your insurance policies out and check them one by one. Build a simple list of renewal dates and put them in your Calendar 2 weeks before renewal date Cancel duplicates immediately, speak to your broker. And shop around!
Office Supplies – Printing, Stationary, Postage.
Boy can you “save some pennies” here. Review your contracts if applicable. We had an old tired printer that had the engineer out to fix it that often we gave the guy his own mug. But seriously we went to market and got a fantastic new digital printer and re-negotiated our terms. The new firm even paid up our old tied-in contract.
We’ve now reduced our annual printing postage and stationary spend by £20,000. By sending the majority documents electronically through our NEW website portal.
Discretionary Spend – Free Tea Coffee, Office Fruit, Staff Incentives.
These are tough times, on the back of cost saving program you communicated. Move the discussion to colleagues and ask them to come up with cost saving ideas. If you don’t already have one in place set up a brew fund, where everyone contributes towards the costs.
Outsource functions – Marketing, Digital, Software.
As part of your cost saving program you must review your sales and marketing outputs.
The most cost-effective way to achieve this is by outsourcing some or all of your marketing activity.
We have seen some fantastic examples of businesses diversifying their old business model very quickly to adapt to the last 90 days pandemic.
Our strategic partner Abbott Browne work very closely with us to drive new channels to market and initiatives.
Cash is King, so have you exhausted all the loans and grants available to your business?
Freeze Spending, review all contracts and insurance you have within you business.
Make Cost Savings, switch and save.
Cashflow Forecast, build a new 13 week forecast and monitor it.
Get your Marketing right, make sure your online and offline marketing spend is giving you the best return on investment it can.
Outsource, if you are looking to restructure some roles and functions, considering an external partner with industry expertise is key to your continued success.