COVID19 - IT'S TIME TO THINK LONG TERM

We are back, one week on, for another update to quarantine life. With a 4 and 6 year old we are finding ingenious ways to entertain our impatient co-workers, whilst they frantically destroy our limited supplies - so nothing has changed there then!

For those of you that missed our last newsletter; like you we have closed our salon business due to COVID19 and like you because of this virus; our family is in quarantine.

We are fortunate to have multiple digital businesses to ride this storm but the future of our Salon business is still uncertain.

As an entrepreneur though, you know as well as I do, even under normal circumstances, business is uncertain anyway - so I am confident that we (you and I) can come out of this healthy and thriving.

At Weblocs we are constantly developing our business and working on new features to respond to trends and challenges.

Right now we have added video streaming as an addon website feature, this will help new and existing clients to stay engaged with their clients online - even if their business is currently closed.

However this blog post isn't about us, its about all of us. We have developed our businesses to work successfully without us being physically any where near it, or our clients - we have essentially been social distancing ourselves for years :)

So we thought we would take this opportunity to try our best to provide some clear concise information, and useful links in the following blog - to help prevent business owners like you and me worrying unnecessarily.

Ok, so last week our primary message to you was DON'T WORRY, and we stand by that; right now is not a time to lose your head with panic.

Yes, things are tough right now - but don't worry.

As business owners, we face problems daily, even hourly and our job is to find a positive solution to those problems.

If you face a problem with a negative mind, you will only find negative outcomes.

Every day brings further welcome announcements of support and advice from the government, financial institutions, and suppliers.

Our paths are all interwoven, and our continued success will have a considerable impact on those that we purchase, borrow and rely on the services of - 90% of them are willing to help.

In our last blog we gave tips on how to lower your outgoings and therefore reduce the impact of closure on your business (view it here)

We are pleased that the feedback we are getting from our members is extremely positive; successfully securing tax deferrals through TTP (Time To Pay), as well as members securing lease, mortgage and supplier payment holidays and deductions for their businesses.

In addition to last weeks message of "Don't worry" we wanted to add something this week that we also feel is very important - THINK LONG TERM.

From discussions with our members, and monitoring networking forums we have found a slightly concerning running theme with many businesses around the country.

Business owners are keen, if not sure, that they will be returning to work on the 16th of April (the date of the Governments first revue)

We would like to take this opportunity to state, with reasonable certainty that we (you and I) will not be opening our doors in April, May and most likely beyond June.

Even typing that now seems scary, and reading it, I can imagine, forms a great deal of disbelief.

It's not however unfounded.

As said in the previous newletter we are in lock-down in Malaysia, where our isolation has already been extended, and friends in China are just now being allowed to conduct essential travel for food; 4 months after Government lock-down started.

This is not scaremongering, and we are not being negative, we are being realistic.

Small businesses that fail to prepare for a long term lock-down, will not open their doors at the eventual end of it.

HOW CAN WE PREPARE OUR SALONS FOR LONG TERM LOCK DOWN?

MARKETING

Somehow we need to create value in our service, without providing the service (at least the one we usually do)

For us this means digital content; now more than ever it is vital that your brand, face, message is in front of your clients in the place where they will inevitably be spending most of their time - their device.

The way to do this isn't any different to how we usually would - but lets assume for a moment that right now we need to do this more, and just think of it this way - now we have more time to do it! :)

The next few weeks is all about Customer Communication

At a time when you will be seeing your clients less (or not at all) it's even more important that we open up as many channels of communication as possible.

We all know that posting regular, engaging content on our social media is vital however at times like these we need to diversify, in order to fulfill our clients needs.

Facebook pages have limited reach these days, whereas Facebook Groups give greater potential reach and better post promotion in your members news feed.

If you do not have a client Facebook group we suggest you start one now.

As with all social media, your engaging, on-trend posts very quickly become lost on your timeline and quickly lose the interactions you know they are worthy of.

Instagram Stories help you to mitigate this effect.

Create "collections" within your stories so that visitors can more easily find the content they are looking for.

The newest social media for keeping in-touch with younger clients is TikTok, although as more time in lock-down goes on, we should see an increase in age group of this audience. This is a more creative social media focused on short, often funny videos - get involved now as this channel is becoming mainstream.

On the subject of under-used communication platforms, in the UK, most definitely Whatsapp for business is an untapped resource.

Within Asia it is used by most businesses as well as Governments for convenient communication.

How about creating an "Ask me anything" group - where your clients can ask advice on their hair and products (just be clear about working times)

Video content in the form of Vlogs are as ever one of the most effective methods for enforcing your brand and conveying time worthy information, however YouTube is still the video king.

We recommend creating a channel filled with valuable content which you post to on a regular basis.

Yes facebook live gets an initial buzz of audience, but YouTube keeps your content easily searchable, providing future audience numbers which far out-weight that of any other platform.

Lastly, all this content available throughout the world wide web is great, it's fantastic really - but without a central hub to use as a directory, your brand again becomes diluted.

We know many businesses out their still do not have a website, and although we are a little bias - as we build them - we would still always encourage every business to have a professionally made website - where potential new clients can find the vital information they need.

Now, that sounds like a lot to keep on top of, even if you are quarantined.

Don't worry, much of it can be duplicated - content for your Facebook group could be vlogs uploaded to YouTube and TikTok videos could be shared to your instagram.

Right now is not about polished content either - yes your branding is as important as ever, however it is totally understandable for your videos tutorials to be conducted in the kitchen and may bring even more interest if they involve family members or pets.

FINANCES ^{(RECAP FROM LAST BLOG)}

All the marketing in the world will not however protect our businesses without financial protection.

With a difficult few months ahead for businesses to navigate through, now is the time to be planning and taking measures to manage cash flow to ensure you and your business survive.

With this in mind, the following are areas where you can look to conserve cash in the business in the short term:

1. VAT Payments

You will be able to postpone these for the next three months up to the end of June 2020. The VAT not paid during the period will then need to be paid to HMRC by the end of the 2020/21 financial year.

You do not need to apply as this is an automatic measure, however, any Direct Debits for VAT will need to be cancelled otherwise HMRC will still collect their cash.

2. PAYE/Income Tax/Corporation Tax Payments

You can speak to HMRC to arrange a “time to pay” delay/payment plan for your corporation tax and PAYE payments. This can be over a period of 6-12 months if agreed by HMRC.

Income tax payments on account for July 2020 for the Self-Employed will not need to be paid, and the tax due will need to be paid by January 2021.

3. Rent

If you are unable to pay your rent for a commercial premise you can defer the rental payment until 30 June 2020 (you will need to speak to your landlord), and you will be protected from any possible eviction by the government.

4. Business Rates

There are many schemes for the smaller business to receive grants (subject to HMRC criteria) and Business rates holidays for a larger business. It is important to ensure you check with your local authority to receive what is rightfully due to you.

5. Directors/Owners Remuneration

Be cautious and prudent about extracting money from your business. The cash conserved will be needed going forward to make payments for deferred costs, so it is important to ensure the monies released are used prudently.

If after all the above, you have simply exhausted funds and need to apply for the Business Interruptions Loan Scheme (BILS) it is important to understand what you will need in order to complete any application.

As with most loans, different lenders will want to see different documentation. You can prepare in advance by having the following information ready:

• Forecasts: ensure you have a detailed and up to date forecast based on cash flow if not your P&L. While the first 12 months of the loan are interest-free, you will still need to demonstrate what you expect to be able to repay over what period

• Going Concern: lenders are going to want evidence that your business was financially sustainable before the crisis – you will need to show this through historical management accounts and future sales pipeline
• Lenders are likely to ask for personal guarantees. Think about what personal assets these could be and whether you can afford to take the risk of losing them should the business not survive.

For the most up to date and correct information visit:

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

SO WHATS THE NEXT MOVE?

APART FROM FOLLOWING THE ABOVE ADVICE, AND LINKS AND CONDUCTING YOUR OWN RESEARCH, WE SUGGEST YOU DO YOU TAKE SOME TIME TO RELAY EVERYTHING TO YOUR TEAM, AND KEEP THEM IN THE LOOP - AS TIME GOES ON THEY MAY START TO WONDER WHAT THE FUTURE HOLDS FOR THEIR EMPLOYMENT - KEEP IN TOUCH WITH THEM JUST AS YOU WILL WITH YOUR CLIENTS.

OUR NEXT BLOG WILL INCLUDE FURLOUGH AND INSURANCE ADVICE, AND ANY UPDATES TO OUR CURRENT POSITION AND CHANGES TO THE INFORMATION ABOVE.

IF WE HAVE MADE ANY MISTAKES, IN THIS BLOG, OR IF YOU FOUND IT HELPFUL OR UNHELPFUL - PLEASE LET US KNOW.