Has the Coronavirus lockdown exposed the weaknesses of many business models?

Robust business models should be based on a clear proposition with a plan for profitable activity.

Each model is essentially a road map of how money will flow from activity.

Business models are a financial expression of the company’s business plan in a way that summarises the strategy, funding, organisation and processes used to achieve objectives.

Given that unforeseen roadblocks and successes will occur, business models should be reviewed regularly and adapted depending on new circumstances and new information.

Tools for refining the model are also useful, such as a SWOT analysis to identify Strengths, and Opportunities to be exploited and Threats and Weaknesses to be avoided.

While arguably, few businesses and especially SMEs, will have had plans to cope with the coronavirus pandemic, it has affected most businesses in ways that were not foreseen. The lockdown has also exposed how little resilience they may have built into their business models to protect from such a...

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The latest insolvency statistics for the first quarter of 2020 don’t tell the whole story

Astonishingly given the news coverage of a financial fallout due to the Coronavirus pandemic, the latest insolvency statistics for Q1 January to March 2020, show a decrease both when compared to the previous quarter and to the same quarter in 2019.

The figures, published by the Insolvency Service yesterday, showed a total of 3,883 company insolvencies with the majority again being in CVLs (Company Voluntary Liquidations).

This was a decrease of 10% compared with the last quarter of 2019, October to December, and of 6% when compared to January to March quarter of 2019.

Construction continued to have the highest number of insolvencies, followed by the wholesale and retail trade and accommodation and food services.

While these insolvency statistics cover the period before the lockdown due to the Coronavirus pandemic was imposed a drop in insolvencies is still surprising given that economies in the UK and EU had been slowing in previous months.

There is more clarity, however, from the...

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Time for a rethink? The global supply chain and short-term thinking

A time of crisis, such as the current Coronavirus pandemic, exposes the weaknesses of inter-dependency and systems and in this case, the global supply chain.

There is perhaps also no better time to review things and perhaps change from the short term thinking that seems to have dominated economics and businesses, especially in those economies like the USA and UK that rely heavily on the purchase of foreign goods.

It is clear that it will be a long time before life returns to normal and it is not yet clear what that “normal” will look like.

In the previous “normal” it was possible to rely on adequate supplies of raw materials for the production of various types of goods, such as food stocks on supermarket shelves.

But one of the first signs of the disruption to come was the rapid emptying of supermarket shelves as people panicked and bought large supplies of various items, for example toilet paper, hand sanitiser and pasta, in anticipation of the coming...

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Five top tips for working at home efficiently and maintaining your mental health

productivity Apr 23, 2020

Many companies have adapted to the Coronavirus lockdown measures by asking staff to work remotely from home, but how do you do this efficiently and also protect your mental health?

Much as we love them, a prolonged period stuck in one place with our families can sometimes be stressful, especially if remote workers are combining working with home schooling their children.

Of course, another complication can be the facilities and space available at home, where cramped conditions can add to the stress of trying to work efficiently while staying healthy.

Here are some tips to help you maintain your mental health and efficiency:

1. Discipline and routine are important: Creating and following a timetable of tasks and activities gives structure to the day, and on that note it is much easier to get into “work” mode if you can work at a desk or table and if you don’t do it in your pyjamas!

Lists are also useful, not least because if you break down your day’s work into...

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Coronavirus Business Interruption survival will need agility not pride

Arguably, all successful businesses need to exercise agility in a fast-changing world, but never more so than now in the midst of the Coronavirus pandemic.

While there is nothing wrong with having pride in your business, pride is also associated with sticking doggedly to a plan that is not working due to a change of circumstances. Just because you have always done things one way doesn’t mean that way is always right in normal circumstances, let alone in abnormal ones like the current situation. In a crisis everything you do should be challenged and often fundamental change is necessary if a business is to survive.

Business agility is therefore a key attribute for dealing with adverse circumstances, to be creative and adapt to the changing environment. This in particular applies to three main areas: staff, customers and processes.

Social distancing has meant that for some businesses their staff have had to work remotely while others are needed in the office to maintain systems....

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Get expert help with cash flow management in a crisis

In the current pandemic situation, many businesses deemed non-essential have been forced to temporarily close for a lockdown period and it is clear that many SMEs will have serious cash flow problems when they resume trading.

Unfortunately, the cash flow problem won’t go away even though for the moment it is easy to ignore it by holing up at home.

While it is true to say that all businesses should have plans for dealing with emergencies and reserves for cash flow problems, it is unprecedented to have to deal with a period of no income and it is becoming clear that many SMEs – and larger businesses – do not have sufficient cash reserves to survive a lengthy lockdown.

Many are telling me that they paid their staff wages for the first month in anticipation of furlough support arriving in time to fund a second month but they are concerned about the Government’s promised CJRS (Coronavirus Job Retention Scheme) arriving in time to pay April wages. As for paying...

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How to manage an efficient online conference

As we all adjust to the new realities of working remotely while we self-isolate during the Coronavirus pandemic, we still need to maintain contact with staff, clients, suppliers and others where online conference calls and video meetings are proving much better than the phone.

But how do you avoid an online conference descending into anarchy with people talking over each other?

There are some simple rules that are not so different from those we adopt during face-to-face meetings.

One of the meeting platforms that is becoming increasingly popular during the pandemic has been Zoom, but there are plenty of others such as Microsoft Teams, Skype for Business and even WhatsApp. Security is an issue and all are constantly improving their security measures following concerns about uninvited intruders, in particular for Zoom which seems to have become the most popular platform.

It is important that the chair should host (convene) and be familiar with the technology since each platform has...

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How will consumer spending change as a result of the Coronavirus pandemic?

economy retail sme Apr 09, 2020

Consumer spending has become much more restricted during the Covid-19 pandemic safety measures, but will it lead to a permanent change?

From March 21, all non-essential businesses in the UK were forced to close, from hospitality, restaurants and fashion retail to car dealerships and holiday travel companies.

At the same time, many businesses have had to furlough staff and a substantial number of people have sadly lost their jobs altogether.

Inevitably the reduction in income through furlough and loss of jobs and restrictions on going out due to most of us being confined at home are having a huge impact on consumer spending.

It is no surprise, therefore that in March, demand for new cars from private buyers fell by 40.4%, while fleet registrations dropped by 47.4%.

According to Essential Retail the food retailers have clearly benefited both in-store and online to the point where they have had to limit supplies of some products and sign-ups of new online shoppers, however the picture...

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Nurture your key relationships if you want to have a future after current crisis

It may seem premature to talk about what happens when the Coronavirus pandemic is over but SMEs need to think ahead and nurture those key relationships needed to ensure their business has a future.

Many of you have had to temporarily close your business and furlough staff due to Government restrictions introduced to try to slow the spread of the virus and many or you have seen your income plummet or cease altogether, with a devastating impact on your cash flow.

According to behavioural scientists it is natural to behave cautiously, even timidly, in the face of a threat, in direct proportion to its magnitude and to what is known about it. But amid the daily deluge of media updates, it is important to remember that we will tend to exaggerate the risk so the threat looms large in our minds.

So, it is perhaps natural to invoke a so-called “bunker” mentality in which self-protection overrides all else.

But as a business owner, no matter how dire the current situation, it is...

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SMEs applying for support under the Coronavirus Business Interruption Loan Scheme should read the small print

Grabbing a lifebelt when you are drowning makes sense, but when that so-called lifebelt is a business loan to survive the Coronavirus pandemic, you need to read the small print before signing on the dotted line.

The various government support schemes for SMEs may have made big headlines, not least their claims about making loans available for SMEs, but the devil is likely to be in the details.

No matter how panic-stricken you might be it is worth making sure you know exactly what you are getting into when applying for a loan under the Coronavirus Business Interruption Loan Scheme (CBILS). The difficulty many businesses are having getting through to someone at the bank is an indication of the problem, albeit it is hardly surprising given that banks have run down their SME support teams over the past twelve years.

Before even contacting a bank the first step is to take a deep breath and ensure you know exactly who to approach and what you can apply for. There are ample details about...

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