As you may or may not have seen, we recently released a playbook that we distributed to our clients, partners and suppliers on how we plan on operating during the outbreak of covid-19. In light of this, we have put together a guide on how businesses can make accommodations for their employees, clients, suppliers, and partners.
To begin, I will say that I’m by no means an expert, I do not possess all of the facts on the coronavirus, the economic climate or do I know everything there is to know about business, however, I have been a business owner of a successful business for over 10 long years and I’d like to share my experience with you. Hopefully, my journey and the learnings that I’ve applied along the way will be beneficial to you and your company.
The word Novi in Latin means the plural version of new, i.e. many new things. As you’ll hopefully see in this article, as well as others that I’ve written, we try to adopt new ways of thinking throughout everything we do.
In this article, I’ve tried to split out the key takeaways into a number of key points:
- What are the government doing to help and how can you benefit?
- What does the coronavirus mean for your business right now?
- What does the impact of coronavirus mean for the future?
- What can you do to help other businesses?
Before I begin, this isn’t an official guide, however, if you are looking for government direction, there is a comprehensive guide here: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19.
In summary, here is what the UK government is doing to help:
(As of 19/03/2020) The Chancellor of the Exchequer has announced a large economic stimulus package designed to protect businesses, with a focus on the hospitality and leisure industries.
We thought it might be useful to summarise the key parts of that support:
• A short-term lending scheme for large firms: provided by the Bank of England. More detail will be released this week.
• The Coronavirus Business Interruption Loan Scheme: offering loans up to £5m with a six-month interest-free period. The loans will be provided through normal banks and other lenders. If you want to use the scheme you should speak to a bank or lender.
• 12-month business rates holiday for retail, hospitality and leisure businesses: available to all businesses in these sectors. If you think you might be eligible you should contact your local authority.
• Increasing grants to small businesses from £3,000 to £10,000: available to any business which benefits from small business rate relief. Your local authority will get in contact automatically, and the scheme will be available from April.
• A £25,000 grant for retail, hospitality and leisure businesses operating from smaller premises: available to businesses in these sectors whose premises have a rateable value of between £15,000 and £51,000. You should contact your local authority if you think you qualify.
• A three-month mortgage holiday: for homeowners who need it. If you want to use the scheme you should speak to your mortgage lender.
• Relaxation of some regulations: including allowing pubs and restaurants to offer takeaway without a specific licence. We expect more information to follow.
• Support with tax: if you need help with your tax liabilities, you should speak to HMRC’s Time To Pay service on +44 (0) 800 0159 559.
• Insurance claims: confirmation that government advice to avoid hospitality and leisure is sufficient for businesses to claim on their insurance where they have appropriate business interruption cover for pandemics in place. You should speak to your insurer if you think you may be covered.
Make sure that you share this information to your colleagues, employees and your wider network – it is there to be utilised, so ensure that people are aware.
In addition to this, as of Monday 23rd, these additional options are available:
- HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
- The government have agreed to support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 ‘under the Self-Assessment system’ will be deferred to January 2021.
What does Coronavirus mean for businesses?
Neil Patel is an industry expert in search. Unlike social which can be used to control behaviours, search marketing looks at the behaviours when people are actively looking for something. This leads me to my first point. If you are to trying to continue to generate revenue during this time, then you need to look at where the demand is. Details of affected industries are shown here https://neilpatel.com/blog/coronavirus/. The article further explains this image:
As you can see, most industries have seen a decline in demand, shown in a decline in traffic searching on Google.
There are many websites that you can use to find opportunities, however, I’d advise that you start with Google Trends: https://trends.google.com/trends/. You can use Google Trends to see whether a search term trend is increasing or decreasing. Equally as useful is https://explodingtopics.com/topics-this-month. Take a look at both of these to see where there are opportunities for your business. This is called inbound marketing. During times like these inbound marketing is your only option, as it provides you with customers who are looking for your products services. Outbound marketing, such as social media, magazines, email marketing etc target a large number of people in the hope that they ‘might’ be interested. SEO and PPC Ads target those with a higher-intent to purchase, and if you do your maths correctly, as I discuss in this post, then you can do so profitably.
Some industries will benefit, this is clear, but many more will suffer.
We’ve already seen the first wave of businesses close in the events, travel, hospitality and tourism sectors. We will inevitably see another wave of businesses close in business supplies, particularly surrounding offices, followed by travel and transport, alongside others. This isn’t a prediction, but rather an expansion of what we’ve seen already.
No matter whether you are a business owner, a key decision-maker, a manager or an employee, you must continue to contribute as best you can. As people, this means physical distancing and isolation, as consumers, it means avoiding panic-buying, but also continuing to buy from your local suppliers (online if possible) and for businesses it means innovating and continuing to trade.
Why does this matter?
This is a serious pandemic, period. I’ve seen those claiming that it isn’t as bad as WWII – this is a ridiculous statement, for a start, it is not comparable, it is different. Secondly, and in many ways, it is worse – it’s global! I’ve heard of people ignoring the information available and socialising, this is very real – we need to be learning from those further ahead in the process.
We have a proportion of the population who are taking this pandemic seriously and ‘due to understanding the benefits of social distancing and practising self-isolation these people are trying to help’ and then we have others who are ignoring it.
I’ve seen people comparing the sickness rates and death rates to total population numbers, but this doesn’t work. It doesn’t work because the two are mutually exclusive and not representative of one another. Not all people who could be infection have been infected and the global population is constantly increasing.
There are the more widely known aspects surrounding social distancing and self-isolation that should most definitely be adhered to. From a business standing, we MUST continue trading by any means possible.
Within one month the FTSE has dropped from 7500 to just over 5000. Let me put this into perspective that’s a drop of 33%! Other global markets are the same.
Business contributions to the NHS
During the past 10 years, our business has contributed well in excess of £1 million in taxes, 20% of which has gone to the NHS. We work with on average 50 managed clients and over 50 training clients per year, all of which turnover an average in excess of £1m. All these businesses, they will pay VAT, NI and Corporation Tax, let’s say that this contributes £250k per year in taxes by way of an example, this is £2.5m in tax, of this a further £500k to the NHS. If you need a reason to continuing trading, it’s to help contribute directly toward the NHS.
Novi employs 10 employees directly, we also have 10 UK freelance contractors that we work with on an ongoing basis, that’s 20 people we keep in jobs as a direct consequence of trading. We have 30 to 40 suppliers that we work with who employ range from 1-person companies through to 250 person companies (we tend to work with small businesses where we can, alongside some larger suppliers – thus thousands of employees salaries are contributed to by the payments we make. In addition to this, our clients employ thousands of people, so the same can be said here. We enable our clients to grow exponentially, in turn keeping many people in jobs and creating many more jobs. It’s a cycle and everyone benefits.
What can you do?
As an individual:
Instead of buying from Amazon directly, find the website of your local supplier, this might be on Amazon, or on their own website, but if you want them to exist at the end of this coronavirus virus pandemic, then continue to buy from them online.
- Agree to pick up tasks that are outside of your usual job description, change approach at short notice etc.
- As a customer, you could also send an email to a company to offer your support.
- As an employee, be flexible with your employer, understanding that they are likely to be going through a challenging time. Running a business isn’t easy at the best of times, nevermind the worst of times.
As a business owner:
For business owners or decision-makers, Digital Marketing matters during this time more than ever, it’s not just about selling products online. It’s about selling products and services to the right people, who are in need of such things. Ecommerce sales have sky-rocketed and will continue to do so, the revenues going mainly to the big players, Amazon and Google, but this doesn’t mean that as a business you can’t also adapt your business model to survive.
Continue to be open with your team and ultimately be kind to everyone, not just your employees. It is difficult for you, but it is also difficult for everyone else too. Be flexible with your team(s).
Further ideas that might help:
- Offer vouchers or credit for future purchases.
- Offer smaller monthly payments for a future purchase in advance.
Digitising your business to survive
Events can go online. Training can go online. Consultancy can go online. Gyms can go online. Pubs can go online (to a degree). My point here is that we MUST continue to innovate and do so quickly. Closing your business isn’t the only option. As mentioned above, the government is helping businesses by way of employee costs, rates and taxes. Now is the time to be innovating and investing in digital.
Start saving
Since starting the company in 2009, the year after the financial crisis of 2008, I’ve always reinvested money back into the business to maintain a bank balance for times of crisis. We refer to this as maintaining a rainy day fund. It’s not too late to start saving now, this can be done through reducing spend, however, be careful not to remove the revenue-generating aspects of your business.
What can we do and what are we doing to help?
- We are offering a price-lock for any current rates if a client wishes to return at ANY point in the future.
- We are offering free services to NHS, Healthcare, Healthtech, Medtech and any health-related businesses.
- We are offering free audits and free consultancy phone calls to any business in the following sectors
- Events
- Hospitality
- Travel and Tourism
- Health and Healthcare
- Baby Products
- Industrial and Business Products
- We are offering a Performance-based SEO option at £100 + VAT admin cost, plus an agreed amount per lead that we generate.
- We are currently offering a 25% reduction to our business consultancy services from £90 per hour to £67.50 per hour for any business struggling with their business – services can include advice on remote working, hiring of remote workers, reducing costs, how to benefit from trends in consumer behaviours and how to digitise your service offering.
If there is anything that we can do during this time to help assist your business, please don’t hesitate to get in touch.