England's third period of national lockdown began at midnight last night and Chancellor Rishi Sunak has reacted quickly to fears that this will cause a wave of business collapses in already struggling sectors. This morning, the Chancellor announced a new scheme worth £4.6billion that is set to benefit around 600,000 businesses with a £9,000 one off grant.
The grants will be available to businesses in the retail, hospitality and leisure sectors, as the areas most affected by new lockdown restrictions, but what about other small businesses across the UK? To offer advice for these firms, IW Capital CEO Luke Davis has prepared his key dates for 2021 and how firms can adapt.
Luke Davis, CEO of IW Capital:
“Britain has always been a nation of shopkeepers, and the UK's community of small business owners and entrepreneurs will be key to our economic recovery in 2021. Making sure these firms survive this third lockdown will be crucial to recovery and growth in future years.
If you are eligible for grants and government support this is undoubtedly a good option in the short-term, I would, however, be careful not to overextend in terms of loans. Interest and loan repayments can quickly become a big issue for your cash flow. Equity and angel investment can help and also provides expert advice and experience in many cases. Talk to an adviser and explore all your available options - there's more help out there than you think.
If plans set out yesterday come to fruition this could be the time that England begins its return to normal. Boris Johnson predicted that, by this point, the top four groups of the most vulnerable will have been vaccinated, opening the door for the relaxing of restrictions. This will be a key time in reopening and making sure that you can communicate with your customers or clients that it is safe to do so will be key. Communicating with staff will be just as important and will help you navigate what can be a moving goal.
The majority of predictions thus far have predicted a return to normal for the UK by summer 2021. After 18 months of online sales and services, preparing for a return to the physical world is just as important a transition. While some areas will remain virtual there will likely be huge pent up demand for spending in physical shops, face-to-face meetings and hospitality. Being prepared to do this in a safe and effective way could put you ahead of the pack and back on track towards growth. It sounds obvious but the return to normal will be an adjustment for just as many as the original shift.
By the latter stages of this year we all hope to be looking back on Covid following a successful vaccine program and the development of new treatments. That is not to say, however, that things will be the same as they were before, and this is not necessarily a bad thing. Weathering a storm such as a global pandemic will hopefully give entrepreneurs the confidence to overcome any obstacle, learn from it and come out stronger. If members of your team work better remotely - don't enforce a 9-5 office culture. If your online sales are booming - continue to focus on optimising that offering. The main thing is to be flexible and do what works for you.