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In the announcement of the Budget 2021, the Chancellor set out a £65 billion three-point plan to provide support for jobs and businesses as we emerge from the pandemic and forge a path to recovery. 

In light of the encouraging news about the UK's social distancing restrictions due to end this Summer, and with businesses now readily preparing for post-lockdown operations, Mervyn Clarke FCCA; director of the SBID Accredited specialist advisors, Baker Clarke offers advice on how to manage business finances to help get interior design businesses back on track. 

Specialising in commercial advice and having advised many companies over the years about re-structuring and recovering from bad times after recessions and banking failures, discover Mervyn's key tips to aid business recovery for the interior design sector.

It's time to reassess! 

  • Look hard at your current customers and consider your position regarding any who might become credit risks. Tact is the key here - maybe obtaining a deposit or staggered early payments to minimize credit risks? Make sure you seek consultation from credit reference agencies like Experian.
  • Consider credit insurance. There are some specialist firms and it does cost money, but can take away lots of “heartache”. Just be mindful of policy wordings. Firms like Premium Credit can finance your premium payments by instalments.
  • “The best runners are lean”. Evaluate your overheads and be tough in cutting back costs - spread cash flow with instalments where possible. I have never yet seen a company where cost savings cannot be achieved, you just need to be ruthless!
  • Think about Directors` salaries and benefits. In tough times, this becomes a key area. Cash flows can be alleviated by year end dividends and save tax!
  • If you lost money (as many have) during the Lockdown period, get advice about tax loss carry back and carry forward.
  • Get advice on your accounting year end. Moving this around can legitimately save tax by efficient use of reliefs and losses.
  • Keep your “books & records” up to date, especially sales debtors!
  • Beware of banking pressures - they will come! Some banks are already dropping out of factoring etc.,  and/or putting pressure on overdrafts in spite of promises. Act now to secure longer-term finance if you can.

If things are really tough...

  • Talk to financial specialists like Mervyn Clarke about corporate re-structuring and check your legal position.
  • Get advice - don’t just leave it…Act NOW!
  • Monitor your position daily (or at least weekly).
  • Look at holding company structures for long-term security.
  • Look at re-finance of property. Here you need specialist lenders and help with presentation as, regrettably, the major clearing banks are often unable to assist in such cases.
  • Again - be tough! Cut down those costs and cut out “dead wood” wherever possible.

    Marketing matters!

    • Evaluate how are you reaching your customers and clients. What other ways can you engage this target audience?
    • Can you improve your website and online media presence in the increasingly digital landscape?
    • Are you being proactive and chasing business hard enough?
    • Look out for new opportunities and areas you could expand or diversify your business to remain agile.

    The Small Business Commissioner (SBC), Philip King strives to tackle late payment and unfavourable payment practices in the private sector. He shares his views on the impact of coronavirus on business and its much-needed recovery.

    There is no doubt that the COVID-19 pandemic is unmatched in modern times. It’s had a significant impact on the global economy as well as people’s health and livelihoods. Measures put in place by government to try and protect businesses had far-reaching effects but as we move on to the recovery stage, the pressures individual businesses face are going to be tougher than the lockdown period itself.

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