In business, we make decisions on facts; if the facts are lacking, you test & measure. If the data isn’t there, you wait to make decisions, and you delay, you pause while the KPI (Key Performance Measure) becomes available.
Most of the thousands of SME business owners who have heard me speak will testify to my views on how to prosper. The decisions we need to make to drive our businesses forward. The methods of obtaining a commercial advantage. The areas of opportunity that many companies miss. Or too swamped with the pressures of the day to day to make the most of the opportunity.
So to examine the UK Conservative governments actions, the shared western democracy panic as the first wave of the Covid 19 pandemic hit. Would have been premature.
The economic recovery is already taking shape nicely – and the shape looks increasingly like a “V” after all. Despite this, many commentators are still pessimistic and even eager to emphasise the downside risks. It is time to view the glass as “half full” instead.
Let us start with what we already know. The economy shrank by an unprecedented 25 per cent in just two months between February and April, but it could have been even worse. The Office for Budget Responsibility’s projections for the public finances are still based on a 35 per cent fall in GDP, sustained for a full three months. The Bank of England had warned of a 30 per cent decline.
What’s more, there is now ample evidence that April was indeed the trough, and that activity picked up sharply in both May and June, even while large parts of the economy were still in lockdown. This evidence includes surveys of business activity, such as the Purchasing Managers Indices (PMIs) published by Markit. The handful of official numbers released so far have generally been better than expected too, including a 12 per cent jump in retail sales last month.
Indeed, both the OBR and the Chief Economist of the Bank of England, Andy Haldane, have now acknowledged that the economy is performing less badly than either had predicted. Even the record level of Government borrowing is slightly below the path that the OBR had pencilled in.
Of course, it is still too much to hope for a neatly symmetrical “V”-shaped recovery, where GDP returns to its pre-crisis level as quickly as it fell. But the latest data suggest that the UK economy should get back close to this level much sooner than many had anticipated, and the picture will look far more like a “V” than the “U”, or even “L”, that some had feared.
In the meantime, some households have been hit disproportionately hard, including many poorer families and the self-employed. Many of those on the Government’s furlough scheme are worried about losing their jobs when it ends. Nonetheless, most households have actually built up their savings during the lockdown. Pent-up demand is therefore still likely to be strong.
However, you should encourage your employees to work from home unless it is impossible for them to do so.
Sometimes this will not be possible, as not everyone can work from home. Certain jobs require people to travel to their place of work – for instance if they operate machinery, work in construction or manufacturing, or are delivering front line services.
Many UK SME businesses are misunderstanding what the government instruction is… relating to COVID 19
All companies can carry on working, and the direction is that people should not breach social distancing. So Retailers, Pubs, Restaurants and Businesses that necessitate people to meet, Theatres, Clubs etcetera, should not open.
Remember that deliving your food or product to the customer is not only OK, in many ways for businesses it’s A unique opertunity. First you learn who and where your customers reside and secondly the delivery person, drives afficency as the customer will be available to receive the order.
You can, however, trade if you can protect the public, your customers and perhaps most importantly, your employees.
Consider social distancing, don’t have teams travelling in the same vehicle. If you can work from home, do so, so clerical duties can continue.(more…)
On Thursday the Federation of Small Businesses (FSB) complained of a “nightmarish” experience for business owners that have already tried to seek help from lenders.
The finance ministry said it will ban lenders from requesting personal guarantees for loans under 250,000 pounds — one of the FSB’s demands — and will make operational changes to accelerate approvals.
Banks have now been banned from requesting personal guarantees – which allow them to take a director’s property if they cannot pay funds back – on loans under £250,000. Most high street lenders have already promised to do this following a backlash but the government will now force all of them to act.
The government has also removed a requirement for businesses to demonstrate that they have no other means of accessing funding in an attempt to widen the scheme.
There have now been more than 130,000 enquiries from companies for the loans, according to new data from UK Finance.
But only 983 businesses have had their finance approved, with around £90 million of loans.
Companies trying to apply for the loans said banks had been demanding the guarantees and charging double-digit interest rates after the first interest-free 12 months.
The Treasury said all viable small businesses affected by coronavirus will now be eligible for the scheme and they will not have to offer any proof they have looked elsewhere first.
Mr Sunak also offered a lifeline for mid-cap businesses.
About 5,000 companies had been previously been too big for the loan scheme – which is capped at firms with turnover of £45m – and too small for Covid Corporate Financing Facility, which helps multinational companies.
A new Coronavirus Large Business Interruption Loan Scheme which will provide a government guarantee of 80pc for loans of up to £25m to firms with an annual turnover of between £45m and £500m.