With so many unknowns as to what will happen to businesses during and after this crisis, I thought I would share some Coronavirus business help advice and tips.
COVID-19 has the potential to be an exponential crisis. It is, from a government perspective, a brutal trade off between deaths and saving the economy. This is a situation like no other, and there is unprecedented uncertainty about what the future will look like and the impact on people’s livelihoods.
Furthermore, many countries are now facing multiple crises – a health crisis, a financial crisis, and a collapse in commodity prices. All of which make for a complicated road to recovery.
Coronavirus Business Help
Most Governments worldwide have chosen to support households and businesses during these times. However, what does this mean for the economic landscape after lockdown?
Current UK Government’s guidelines mean potentially more deaths and the general consensus is, recession is inevitable. Even more than that, many expect to experience the worst recession since the great depression.
Take a look at the possible exit strategies below. On the assumption that we are able to contain the virus, and the pandemic recedes in the second half of this year, every option still leads to recession.
Now take a look at the very stark graphic below highlighting exit strategy trade-offs and the options available to Governments.
Some of the best sources in the World are very clear about the inevitability of recession and the tough economic times ahead.
This is a truly global crisis with no country spared.
For the first time since the Great Depression both advanced economies, emerging markets and developing economies are experiencing a recession together. Stock markets have plummeted.
Countries that rely on tourism, travel, hospitality, and entertainment for their growth are experiencing especially large disruptions. For emerging markets and developing economies it means unprecedented reversals in capital flows due to currency pressures, weaker health systems and limited opportunity for fiscal support.
The above analysis was undertaken on 6th April.
The table below identifies thinking by the same author, Ian Mulherin from The Tony Blair Institute.
A valuable source of information is The Financial Times. In my view, they have led the analysis of the forthcoming recession and its general consensus.
Both tables below are from April editions.
So what to do?
1.0 80% of Surviving the Pandemic Relates to Cash
1.1 Government Grants & Loans
1.1.1 Q2 VAT Delay
1.1.2 R&D Tax Credits
1.2.2 Be aware
1.3 Clients and Suppliers
1.3.1 Cash Flow
1.4 Stock & Inventory
2.0 Sell More; Improve Margin and Reduce Costs
2.1 Sell More
2.2 Improve your margin
2.3 Reduce your costs
2.4 Look at the structure of your business
Now that’s a bit vague, I understand. But you will find all the details here in this blog post. I hope this helps to provide you with some guidance and reassurance during this time.
There are some clear signs that this health crisis will end.
Countries are succeeding in containing the virus using social-distancing practices, testing, and contact tracing. So, although the general consensus is, yes, we are heading into a global recession, there is light at the end of the tunnel for our economic outlook. The Bank of England is expecting “only limited scarring to the economy” over a 3 year period.
Make sure you are still around then.
If you would like to discuss this further, or would like more Coronavirus business help then please do get in touch. We’d be more than happy to help!
Good luck and stay safe!