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Has your Business Income been Deferred or Lost?

The problem that exists with support that is primarily cash flow based, is that if you cannot defer sufficient income to match the timing of your support repayments, then are you not just deferring a problem from this year to next? This in turn poses the question to business owners. “Is your anticipated income for 2020 currently being deferred, or has it been lost?”
The answer to this question will clearly be different for each business owner and will heavily depend upon the sector you operate in.

Not wishing to pick on any one industry, but for illustrative purposes, I’ll take hairdressing as an example……For sure over the forthcoming weeks everybody’s hair is going to get longer and many people will be sorely missing their trips to the salon.

 That said though, once the salon reopens and the initial rush to get an appointment has been dealt with, not many people will return for a second appointment the following week and then again for a third, the week after and so on.
 A normal pattern of customer behavior will quickly return. This represents lost revenue during that period of closure that cannot be recovered simply.

 Because of a lack of revenue deferment for many SMEs, 2021 may pose a whole new problem in terms of balancing the 2021 books and facilitating the repayment of 2020 deferred costs.
This is why it is critical now for businesses to assess their present viability (under historical normalised trading conditions) and forecast for 2021 and beyond, factoring in the impact of Coronavirus and what this will mean for the new norm that will be ‘Post COVID 19 Corporate UK’.
Critical consideration needs to be given to what strategies and mechanisms you can deploy to help mitigate against your 2020 lost income.
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