Information available to support businesses tends to focus on recovery planning or what to do during or immediately following a flood. This article is aimed at maintaining your business activities and more specifically looking at the questions around cash-flow.
Once you have assessed the situation in terms of damage, premises, stock, staff, health & safety there is a single issue that can make or break your business and it needs your attention – cash-flow.
The suggestions below are aimed mainly at small businesses and sole traders but some of the principles apply equally to larger companies. They are in no particular order or priority as they will depend on individual circumstances.
The continuity of your business is likely to depend on how much working capital or cash you have available while you can’t trade fully. There are a range of options you can take into account to help manage your cash-flow.
- Seek financial advice and counselling
Don’t hold back on seeking professional advice and support on how to improve your finances. Talk to your accountant, or financial/business advisor.
- Make an insurance claim
If you have insurance, particularly business continuity insurance then make a claim as soon as possible or at least make your insurers aware. Check out the advice available on making a full and effective claim. At some point don’t forget to discuss with your accountant as some insurance pay-outs will need to be considered for tax purposes.
If you have insurance make sure you claim ASAP
- Speak with your creditors
Explain your current financial situation to your creditors. Suppliers may extend credit and your bank may agree to freeze your loan or offer you other options until you're able to trade fully again. When speaking with your bank make sure you can support your request with facts and figures.
- Chase up your debtors
If you have debtors contact them and explain your current situation. Chase up as many outstanding payments as you can to get some money coming in.
- Consider self-funding as an option
Look at any assets you might be able to sell quickly, even personal assets (Facebook and Ebay can be invaluable). Find any cash reserves or possible investors willing to fund your recovery.
Alternatively look at ways you might be able to reduce your personal outgoings and dependency on the business.
- Talk to government agencies
Speaking with government agencies will provide you with some insight into arrangements in place for businesses in flood affected areas. HMRC and others may provide a deferment of payment or extension. Can your local council help?
- Apply for government funding
There is a range of government funding and assistance available for floods and other natural disasters. Check out the links below.
- Seek non-government support
It doesn’t always ‘feel right’ but sometimes it’s worth speaking with local charity organisations. Following an event such as flooding charities may receive generous donations to help the community get back on its feet.
- Beware of scams
You and your staff should be aware that some individuals take advantage of crisis situations and find ingenious ways of scamming you when you are most vulnerable. Make arrangements to keep informed about current scams e.g. register with Trading Standards.
Make sure to look out for scams
Other businesses might not have been flooded themselves, but have still been affected because their subcontractors are underwater, or the roads around them are closed, for example. They might not think to call us, but they should, as we can give them advice too. A lot of the financial support, such as the £10m Business Support Scheme, which will provide money, through local authorities, for businesses suffering hardship as a result of the floods to spend on things like clean-up costs and materials. Companies House and HMRC will also accommodate late filing and payment and we can direct businesses to the right contacts if they need to do this.
Helen Watson, Advisor at Business Support Helpline funded by the Department for Business Innovation and Skills.