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How Small Businesses Can Approach a Temporary Shutdown

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Summary

COVID-19 is leading to unprecedented and widespread business closures. Discover tips for how your business could weather a temporary shutdown.

      As governments around the world look at ways to "flatten the curve" of COVID-19's spread, new rules and measures mean businesses will need to temporarily shut their doors.

      Here are some things to consider to help you navigate the uncertain days ahead.

      1. Change what being open for business means

      The UK’s business landscape is evolving quickly as the coronavirus spreads, with small businesses having to adapt to a new normal that is anything but normal.

      For some small businesses, weathering the storm means a radical overhaul almost overnight. Government rules for cafes and restaurants, for example, mean customers can no longer dine in. Yet hospitality businesses are still permitted to sell takeaway food.

      Cue a rapid pivot for many cafes and businesses as they switch to takeaway and delivery-only approaches, aided by the temporary lifting of the requirement for planning permission to change business use in this way.

      Serving up takeaways helps hospitality businesses keep their kitchens open, albeit in a limited capacity, and generate some cashflow that will be critical for the months ahead.

      Getting the message across to customers about how your business has changed the way it works will be essential to capture traffic. “Bring awareness to your delivery service through apps and by promoting deals and discounts on social media,” advises James Jacobi, business advisor and founder of Jacobi Enterprises.

      If you do reduce or change hours and offerings, Bill Schwartz, a retail and restaurant consultant at vcfo, recommends keeping a close eye on the financials.

      “Whether sales will exceed variable costs—food costs and labour for restaurants—is a base determining factor,” he says. “If you’re selling so little that it costs more to keep people working, it may be better to close and pay the fixed costs, such as rent. Doing this will preserve capital to help weather the crisis.”

      2. Sell at a distance (socially)

      For small businesses that typically rely on personal interactions through in-store experience, the current situation will place greater emphasis on online services instead. Now is the time to get your e-commerce operations up to speed and explore other ways to take orders.

      Switching to phone orders is one option. Justin Wheeler, co-founder and CEO of non-profit fundraising software company Funraise says: “A small business could leverage a cloud phone service provider to ramp up their ability to handle an influx of customer calls, with store staff manning the new phone lines.”

      For customers who are self-isolating but still want to browse a physical store, consider taking them on a virtual tour. Scheduled one-to-one FaceTime or WhatsApp appointments could help customers stuck at home feel connected with the outside world and help you sell at a distance.

      If you run a service business requiring in-person interaction, such as a dry cleaners, allay customer concerns ahead of time by letting them know that all interactions will comply with hygiene guidelines. Follow through by practising appropriate measures like regular sanitising, not accepting cash, and encouraging people to keep two metres apart.

      3. Take care of your employees

      Employees are the lifeblood of small business operations. They will be worried about their finances and future employment during a temporary shutdown.

      Small-business owners should take time to check in with them and answer any questions they may have. Greg Ballard, CEO of boutique business consulting firm Five C Consulting, says: “Your employees are wondering about the future and the impact on them and their families. Though you don’t have a definitive answer, you can communicate candidly with them regarding what you do know at this time. That builds trust.”

      Where possible, some companies are continuing to pay employee salaries, while many will be eligible for the UK Government’s workers’ support package. Run by the HMRC, the scheme will pay 80 per cent of salaries (up to £2,500 a month) for staff who are kept on as part of the workforce by their employer, but who are unable to work because of the pandemic.

      4. Explore financial assistance options

      Your small business and employees could be eligible for financial relief, whether under the UK government’s temporary package of measures or via other routes.

      Check the official government website for the latest guidance and keep an eye on communications from your business banking partner for support being offered on business finances.

      Regional authorities in the UK are another avenue, offering regional relief and cash grants to some small businesses.

      Additionally, your employees may qualify for government assistance. Keep abreast of these developments in order to help your employees and conserve company capital.

      In fact, keeping on top of developments in how your business can operate as well as how your employees are coping will lay the groundwork for when the temporary shutdown comes to an end. There's no indication yet of when that is likely, but adaptability in the current business landscape will give small businesses an edge when the future one starts to emerge.

      Published: 26 March 2020

      Updated: 04 May 2023

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