Lessons learned one year on from the first lockdown
Around this time last year, the UK was nearing the end of its first national lockdown.
We were “past the peak” of the disease and “on the downward slope”, said Prime Minister Boris Johnson in an optimistic Downing Street press conference on 30 April 2020.
On 10 May 2020, the Government’s slogan changed from ‘Stay at Home’ to ‘Stay Alert’, and a recovery strategy was published the following day alongside a new alert system, with the UK’s status moving from level four towards level three.
While in reality as the pandemic worsened, the UK had two more full national lockdowns and continued restrictions ahead. The initial shock of lockdown was largely over and businesses were starting to look beyond their crisis response, at what they might need to change in the months to come.
For our clients, it’s been a tale of two halves. Some businesses, especially those with physical stores that were forced to close, have really struggled.
Others have benefited from increased demand – in some cases seeing years’ worth of growth in a short period of time.
Looking back at the last 12 months, there’s a lot we can learn from the challenges and successes of businesses in either of those situations.
Focus on quality
One of the key lessons from the pandemic is one that holds true in any circumstances: whatever you do, do it well.
The quality of your product or service is what’s going to get customers returning to you after periods of difficulty, and make you standout against the competition when demand is high.
Big tech companies like Zoom and Netflix have been able to make the most of a period of unusually high demand, largely because their product was already primed to meet users’ needs.
We saw the same thing with our clients. We work with a personal protective equipment (PPE) company, for example, that offers high-quality, certified equipment with a wide range of medical and industrial applications.
When the pandemic first broke out, those products were in high demand and thousands of suppliers were offering them, with the Government reporting in April 2020 that it had received more than 8,000 offers from suppliers of PPE.
Our client’s high-quality products and experience in their field meant they could secure increased orders from both the NHS and private businesses, and have seen a dramatic increase in turnover as a result.
The company has gone from strength to strength since, and its outlook for the next 12 months is broadly the same as businesses continue to rely heavily on PPE as the UK slowly emerges from COVID-19’s iron grip.
Know your data
Although a surge in demand might sound like a good thing, it can be just as damaging as a lull in business if it’s not properly managed and monitored.
The cashflow issues caused by rapid growth are often hard to spot until it’s too late, putting a lot of otherwise successful businesses at risk.
Our client in the PPE industry was able to manage the spike in orders largely because they had good oversight on their financial data and could monitor, forecast and react to any changes in cashflow before they turned into a problem.
This is also important when business has been negatively impacted.
Another one of our clients, a health and fitness business, got through the pandemic by undergoing a major restructure, after being forced to close down their bricks-and-mortar studios and suffering a loss of revenue.
They made the swift decision to change their business operations, and are now projecting strong performance in late 2021 as we hopefully ease out of lockdown.
Having consistent financial data to hand will give you a clearer picture of where the problems are, so you can quickly take measures to protect your business.
Funding isn’t just for a crisis
Another key decision our client in the fitness industry took early on was to apply for Government support.
Millions of businesses have done the same over the past year, with £19.7billion claimed in total under the self-employment income support scheme as of 31January 2021, and £57.7bn under the furlough scheme as of 15 March 2021.
Loans totalling£23.28bn were also taken out with 98,344 claims under the coronavirus business interruption loan scheme (CBILS) by 21 March 2021, and 1,531,095 applications were approved for bounce-back loans worth £46.53bn.
Making the most of the tax incentives available, such as R&D reliefs or capital allowances, is also a great way to support your business plans and accelerate your growth.