Coronavirus and its impact on small and medium sized businesses

Tax Affinity Accountants have several branches in London

The spread of (Covid-19) Coronavirus from Mainland China throughout the world is having massive effects upon small and medium sized businesses. A lot of small business owners are so busy with running their busy everyday that they have not had time to try to figure out a plan to safeguard their employees, customers and profit lines.

The British economy is reliant upon finance, tourism and to a lesser extent manufacturing. Data presented earlier this month showed British economic growth slowed to a stand still at the end of 2019. Supply chains from China have dropped off and many travel operators are slowing down or closing services. This means limited supply and increases in costs. And because small to medium sized (SME) businesses often do not have the cash flow and financial resources to absorb sudden increases in costs this can mean a serious problem, not to mention the health and well being of their staff.

Unlike the press, we don’t just present the problem but provide an answer - So here is what SME business owners need do to manage the coronavirus problem:

1. Increase suppliers and look for different origin source countries - often SME's have one supplier and a cannot order in bulk. So shop around and look for similar products and suppliers importing from other countries other than China. Think about pooling together with other buyers into a self made buying group and ordering in bulk. Sharing purchase and storage costs can make it affordable.
2. Ensure your staff well fare - keep them safe from infection, and provide hand sanitizers and anti-bacterial wipes etc for surfaces where customers may touch and pass on infection. Ensure all staff are told to clean their hands with soap and water for at least 20 seconds several times a day. Ask them to minimise physical contact with customers and minimise usage of public transport if possible, even working from home if possible.
3. Speak to your bank - ensure you have access to cheap loan and overdraft facilities to get a cash injections in case you need it. Think old school, borrow at 0% interest from friends and family or trade in goods and services without money if needed.
4. There is always an opportunity - sell different products or services, think about selling face masks, hand sanitizers and anti-bacterial wipes etc. Think of changing the way you do business and your market even.
5. If imports from China are falling then home produced suppliers and exports are an opportunity for many businesses to fill in the gaps. Look for current gaps in your industry supply chain and see how you could fill them. eg if you find a great supplier that no-one knows about, think about becoming a wholesaler and reseller not just a retailer ot the public.
6. Raise prices - SME businesses often fear raising prices and losing customers. They often absorb increased costs without touching the price. This means they are earning less net profit as time goes by and take home less pay each month. Don't be afraid to lose some customers if you raise prices due to rising costs, your not running a charity.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Kingston upon Thames and Epsom they are considered in the Industry to be expert business accountants and tax advisors for small and medium sized businesses (SME's). Helping and supporting limited company owners and self employed people throughout the UK, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

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