Get the spreadsheet out
Planning ahead is always sensible anyway and getting a firm handle on what's likely to happen to your cashflow over the next few months is a really good idea. You should explore all the ‘what if ‘ scenarios you can think of and while you should certainly not shirk from plotting out the ‘worst case', you should also look at the ‘best case', and what lies in between. Doing this will give you a sense of perspective, highlight the key factors and show you where you need to focus your efforts.
Take professional advice and use government schemes
Your first ports of call for financial advice should be your accountant and your bank. They should be able to offer you advice and real assistance, respectively. They will also be able to give you some guidance on the various government schemes that have been launched to help ease the pressure on businesses. The Coronavirus Business Interruption Loan Scheme (CBILS) is available through 40 accredited lenders, and the Small Business Grant Fund and / Retail, Hospitality and Leisure Grant Fund schemes are designed specifically for smaller enterprises. There is also a grant for the self-employed. Many of you will already have taken advantage of VAT deferral and there is also a scheme for deferring self-assessment tax payments. There are also programmes to support PAYE (the job retention scheme), and to cover statutory sick pay. If you are in doubt about whether you should or can apply for any of these schemes, you should speak to your accountant.
Reduce costs where it makes sense
It's obvious that you would want to reduce cost, but what you do has to make sense for the business in the medium as well as the short term. You will already be saving on travel and hotel costs, and your every-day running costs will be reduced right now. While you may be able to cut back on areas such as events and marketing, it may not be necessary or wise to curtail all non-essential activities completely. You will want to come out at the other end with some kind of pipeline. A lot of customers will be reviewing their approach to IT and business contingency - so different opportunities may arise as the situation evolves.
Talk to your customers and suppliers (i.e. your debtors and creditors)
Some customers will owe you money and you will owe money to some suppliers - Tech Data may well be one of the latter. The more you can do to ease the pressure on your cashflow, the better. Expectations need to carefully managed - your own included. Simply ignoring the issue and not paying bills is not an approach we'd advise anyone to take.
Of course, some customers may find it difficult to pay until business cycles return to normal, others may be better-placed to stick to the agreed schedule. Likewise, your supplier creditors will also want to know how you are positioned. But if you can slow down the flow of money out of the business, that's going to help as well. Everyone will be in a similar boat of course, so keep that in mind.
Tech Data has a range of finance options available, from leasing, loans and deferred payment facilities through trusted partners and may be able to offer a solution. The best way to unlock the potential for your suppliers to help you is to be entirely open and transparent and be ready to provide any information requested that will enable them to help find a solution. It's already an overused phrase, but these are unprecedented times, so we all need to understand that every vendor, supplier and customer is doing their best to protect their own businesses and employees, just as you are. The best outcome is for every business in the supply chain to stay intact.
Keep the wheels turning
It's really important not to simply stop doing business. We saw a rush of activity when the WFH directive was issued and we are now at the stage where different sectors are adapting to the different levels of activity that are possible. Businesses have started to adapt and while many projects are on hold, some are still being advanced. Many customers are also taking the opportunity to review and update key parts of their infrastructure. Also, customers are going to need support - and as they are working at home, they will be uncovering different problems - and they may yet find that they need additional licenses or equipment. It's important to be there for them, and to keep your business up and running and the wheels of industry turning.
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