UPDATED 27/03

In the face of coronavirus, many of us are looking at ways to safeguard our future. We’ve tried to collate all the information available into one space for you. Things will be changing all the time and we’ll be updating this page regularly as the Government provides more information and support.

Support for our community

The team at TechSPARK is here to offer any support and advice that we can, you can contact us via hello@techspark.co.  TechSPARK, as part of the TCGUK (Tech Cluster Group UK) is in contact with the government and feeding in ways in which they can support us.

Below we have detailed some of the packages announced by Government and how they could impact you

The Coronavirus Job Retention Scheme

The Government  has announced it will provide support to businesses around wages:

• All employers are eligible for the scheme.
• It’s only wages of people who aren’t working but are furloughed and kept on the payroll. We don’t know how you’ll show people are furloughed
• The grant will cover 80% of their salary and offer retained workers up to £2,500 a month
• It can be backdated to 1 March.
• Employers can top-up salaries if they wish
• There is no limit on funding and it’s open for at least three months.
• IT will be paid to businesses by the end of April

Coronavirus Business Interruption Loan Scheme

This scheme will offer access to lending and overdrafts for businesses affected by the current crisis. The government will provide the banks with a guarantee for 80% of funds loans so lenders have the confidence to still provide finance.

• Rates are 0% for the first 12 months
• This is still a commercial loan so needs repaying, will be assessed on your business and may require security for the remaining 20%
• The maximum amount to borrow is £5m
• Loans will be available from Monday 23rd March
• More info via the British Business Bank here 

Business rates – £10,000 grants.

The Government has announced that many companies will not pay Business Rates in 2020-21. Most relevant to our sector is the £10,000 grants which will be given to up to 700,000 businesses in the UK.

• Grants of £10,000 will be awarded to businesses who are eligible for Small Business Rates Relief.
• This scheme is being run by local authorities and awards should happen without you having to apply if you have SBRR eligibility. Funding will come to councils in early April to do this.
• If you are in managed space you likely haven’t done this so you won’t be eligible.
• It’s possible your managed space provider has so worth checking in.
• More info here

Statutory Sick Pay

All SMEs will be able to reclaim statutory sick pay for employees affected by Corona however no system is yet in place for this so it may take weeks to months for money to come back.

• It’s for SMEs only (fewer than 250 employees)
• It’s for 2 weeks SSP per employee who are off because of Corona
• No sick note is needed just employer records

Self employed /  Contractors / Freelancers

If you are self-employed Government offers support similar for employees

• You will receive a taxable grant of 80% of your average monthly profit up to £2,500. You can still work through this time, unlike furloughed employees.
• it will initially be for 3 months but payment won’t be until June
• You need at least self-assessment return for 2019 & payment will be calculated using average monthly profits over the last three financial years
• The cut off is for self-employed profits of £50,000 p.a.
• If you are eligible HMRC will be in touch.

Some people won’t be eligible for the above. If so Government  has said it will make it easier for you to claim Employment Support Allowance or Universal Credit at the rate of Statutory Sick Pay

• During the crisis, the Universal Credit minimum income floor will be relaxed if you are sick with Corona or self-isolating
• People can claim Universal Credit and access upfront payments without going to the jobcentre if they are self-isolating
• Employment & Support Allowance can be paid you’re sick with Corona or self-isolating from day 1 (instead of the usual day 8)
• Universal Credit has been increased by £1,000 a year for the next 12 months.
• All self-assessment payments for businesses will be deferred to 2021.
• Info on Employment and Support Allowance is here and Universal Credit here

Tax & VAT

Both business and self-employed can receive support from the HMRC time to pay scheme which means you can defer payments

• The Chancellor announced that he is deferring the next quarter of VAT payments. You now have until the end of the year to pay them
• HMRC will discuss instalments, suspensions of debt collection or cancelling interest
• They have a Corona hotline 0800 0159 559.

Other Information

How you can help

To combat the coronavirus outbreak, the Government is looking to collaborate with startups who might be able to lend support and expertise in the following:

• If you can help with vaccines: Nervtag@phe.gov.uk
• If you are able to support in the manufacture of ventilators: ventilator.support@beis.gov.uk
• For any broader support or ideas to help with the response on innovation or tech: DNHSX@nhsx.nhs.uk
• There’s also the European Commission’s funding scheme for startups that could help in treating, testing, monitoring or other aspects of the Coronavirus outbreak. The deadline for which is today Friday 20 March at 5 pm.

Bristol cases

As of 16.30 on 26/03/20, there have been 41 confirmed cases of coronavirus in Bristol. Please note, the Government has decided not to test people with mild symptoms. Local authority numbers of confirmed cases are reported on this dashboard and updated each afternoon.

Volunteering

Lots of people want to volunteer to help. You can do that in Bristol via the Can Do Website and in Bath via B&NES 3SG Community Connectors

The Quartet Foundation is also directing money to the communities in more need locally, you can donate here

Other Helpful links

• Business West have a new site called Trading through Corona with advice
• Our partners at Tech South West have released a Podcast on how businesses are reacting to the coronavirus outbreak, and the crucial role technology is playing to support them through the ongoing crisis. Listen here
• Enterprise Nation’s coronavirus support hub.
• Tech Nation has collated information on the government response alongside useful resources

Many businesses are facing severe challenges in the current crisis. Although not a definitive list, hopefully the following thoughts will give a framework for founders to consider, especially in smaller businesses.

This is my personal response – I hope you find it helpful when considering your own challenges – Rick Chapman, Entrepreneur-in-Residence, SETsquared Bristol.

Business continuity in a crisis

1. Cash flow will kill you

Even in normal times, cash flow is one of the biggest reasons for businesses going under. It’s easy to forget the importance of regular injections of cash into your bank account to meet your ongoing liabilities. In times of crisis such as this, it is even more vital given future revenue may be even more uncertain. Consider the following points:

• Minimize spending wherever you can – be brutal if neededAll businesses over time continually add small amounts of regular spending. Look at how many SaaS products you are paying a monthly subscription for. Do you really need them all at present? Larger projects such as marketing campaigns should be reviewed or, at the very least, rescheduled. Even costs that appear to be committed may have flexibility – talk to your suppliers and see if they can help, but remember they will be facing challenges too.
• Pull invoicing forward If you are in the fortunate position of having larger customers, especially public sector, approach them to see if you can get more favorable payment terms. Dorset Council have just proactively offered immediate payment terms instead of their usual 30 days, which is fantastic.Larger entities are more likely to have reserves to ride out crises, and the more nimble of them may be willing to support their supply chain more actively.If you are able to, ask your clients if you can progress work ahead of schedule and invoice for completed work immediately.
• Defer your spending, but don’t just push problems down the supply chainAs above, if you have larger entities as creditors, they may be willing to wait longer for you to settle your bills. Do not assume this will be the case – check – but don’t be afraid to ask.Larger entities are also more likely to hold insurance against business interruption, so may have protection to cover loss of income etc., from smaller partners.

2. Look for additional finance

In a very dynamic environment, many additional sources of finance are becoming available. This blog will almost certainly be out of date within hours of publication, so I won’t try and be exhaustive here – check media sites, especially for your sectors and clusters. e.g. Tech Spark, Tech Nation and of course www.gov.uk.

Some sources you may consider are:

• Government Aid (Deferred Tax Payments, Loans, Furloughing employees etc.)
• Business Interruption Insurance – check if you have this. In the last week I’ve talked to several SMEs who did not realize they had this cover as part of their insurance package.
• Short term loans and overdrafts
• Invoice financing
• Customer advanced payments – see notes on larger entities above

3. Liquify assets if you have them

As the old saying goes, do not cut off your nose to spite your face! I’m not advocating selling off your key assets here, but many companies have assets that are going to be idle for several months. Can they generate alternate revenues, or can you temporarily reduce lease payments, for example?

4. Look for alternate revenue streams as a temporary measure

Standard business advice is to “hold your focus” and “don’t try to progress too many things in parallel”. Sometimes, however, rules are made to be broken. If you are facing several months where Plan A cannot progress, does this create an opportunity to do something else in the interim?

This may be looking to your software team to offer themselves up for agency work, this could be using your manufacturing capabilities to supply products to the NHS. It could include your marketing team copywriting for other clients.  Be creative!

Don’t overlook the fact that ‘furloughing’ your staff under one of the government schemes may help your survival more than keeping them on full pay and trying to find alternate revenue. As always, consider all the options.

5. Network – you’re not alone.

Although we may be stuck at home, life goes on. Video calling is currently a boom industry! Reach out to colleagues, friends and more – they are a source of creativity and information, as well as a vital resource to keep your spirits up! Look on the bright side – we may even emerge with new cooperation models using less transport infrastructure and other side benefits.

Use the media hubs – they are working hard to keep information updated in a rapidly changing environment – but they are also starting new online initiatives to keep us connected and productive.

Business recovery after a crisis

It is important to think now about your plans as the economy improves. Those companies that position themselves for recovery are far more likely to do so. Consider the following thoughts:

1. Cash flow will still kill you

The recovery will be slow. Plan to turn on your spending taps slowly and carefully monitor your situation regularly. Be prepared for a couple of false dawns and blips in the recovery, and so be prepared to keep your spending low for a little longer than you may think necessary.

However, be prepared to nimbly upscale too if the opportunities are real.  Small companies generally have more flexibility to scale up and down, and this will be key to recovery.

2. Prepare your pipeline during the lull

• Marketing is cheaper in a crisis, concentrate on Awareness and Interest (AIDA)In general, a lot of marketing activity will be scaled back to preserve cash during a crisis. A few very targeted releases may therefore have more impact. Think carefully who you want as your first few customers in the recovery phase and target them. Go back to your go to market strategy and be prepared to almost start again in the same vein.
• Be prepared to discount recovery salesLike you did to gain traction in your early market, think of a recovering market in the same way. Hopefully your profile means you don’t need to discount as deeply now, but you need to stimulate growth.
• Time your re-entry carefully – service will be key

Once you do commence sales, ensure you are also scaling support back up. Everyone will be hurting and may need more support than normal as they may be short staffed. Plan for this and become their preferred supplier by facilitating their recovery as well as your own.

• Consider your channels

Marketing will get crowded as the economy recovers – pick your most promising channels for your first recovery sales. If the infrastructure is weaker, consider changing your channels to more direct sales temporarily. If you use distribution, look to the global recovery patterns and choose which to support in priority order.

3. Collaborate in recovery

Other businesses will be recovering too – there may well be opportunities to share costs and cooperate in new ways. Be open to the possibilities.

4. Don’t rush.

Recovery will take time. Have realistic timescales to rebuild your business and do not over commit too quickly, whilst still being open to emerging opportunities. This is going to be a balancing act, I admit, but assuming a quick recovery will ensure you fall off the tightrope.

Summary

Don’t panic – keep a clear head. I sometimes joke that any serious entrepreneur must have looked over the cliff edge at least three times.  This cliff is real, big and scary, I don’t hide from that fact.

But this is what we do. Plan your way through this.

There’s no sugar coating this, we won’t all survive, but those that do will emerge stronger – and employ the rest of us!

Challenge your pre-crisis assumptions. It is not business as normal, nor will it be. Use the time to re-plan deeply. We rarely get that opportunity in business. Take your immediate actions and then create space for some strategic thinking.

Once you have decided a route forward, ACT!  If you need to make cuts, make them. Businesses will fail through inaction.

Network, network, network!  Help is out there and you are not alone.

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At a recent meeting with senior officials at Number 10 Downing Street, we presented our ‘Grass roots report to Government’. You can read the full report below.