Addressing the future impact of flooding on your business

Take a look at your marketing budget – can you move it? Think about the next few weeks and check any booked advertising is appropriate.

You may decide to cancel some advertising: it may not generate business at this time, will save money or because the message is wrong in the circumstances.

Take a good look at your incomings and outgoings:

• Review your costs
• Slow down payments
• Delay, or cancel, planned spending;

However, remember your business is built on your staff and customers. You will need to strike a balance and ensure that you can still operate to the appropriate standard that your customers expect and can afford to promote your business to customers. Divide your expenditure into fixed, variable and one-off costs:

• Fixed costs: These are items which don’t depend on the number of customers you have. They tend to be regular payments, such as mortgages and rates. Most fixed costs entail a contract, so non-payment may mean you lose your business.
  
   
• Variable costs: These are outgoings which depend on customers, including staff, utilities and supplies. Review to see if you can reduce them. Can you renegotiate terms with suppliers?

Other savings ideas are:

• Join buying groups which could make savings;
• Ask suppliers if they can deliver smaller quantities;
• Check your energy and insurance tariffs to see if you can reduce them;
•  Introduce energy-saving measures;
• Discuss different payment terms with your suppliers. A switch from 30 to 60 or 90-day terms could help your cash position significantly.

One-off costs

See if there are any non-essential/one-off items of expenditure which could be reduced, put on hold or cut? For example:

• Can you postpone any planned capital expenditure?
• Prioritise repairs – trades will be limited and prices potentially higher, so consider what is essential and what can wait. Review other areas of maintenance and see if any can be done.
• Think about working with other businesses to share costs of repairs or services.

Other cost-saving measures

Consider all the elements to help you focus on the future and what expenditure you will be facing. Make sure you take professional advice and follow guidelines at all time.

• See if your local authority or business group is offering support.
• Speak to your bank – are you getting the best deal for your overdraft loan, interest rates, bank charges and credit card commissions?
• Review your gross margins on food and drink – are they sensible and can you achieve them?
• Keep your personal drawings as low as possible and only for your immediate needs.
• If you have to reduce staff numbers or hours, be open with your team so they understand the rationale.  You must understand current legislation if you are making staff redundant or changing their contracts.  It is always useful to seek professional advice, or to view sites such as acas.org.uk.
• Ask for advice from your trade association, LVEP and other businesses.

Make sure you speak to suppliers, particularly if you need extended credit. They are likely to be understanding during difficult times. Don’t ignore suppliers seeking payments - it is important to maintain goodwill at all times. If you find yourself unable to cover your debts, seek professional advice immediately.