Practical advice if you need to temporarily close your business
Whether in the hospitality industry or another sector many small- to medium-sized businesses may face the need to temporarily close for a period during this COVID-19 crisis.
Our advisory team outline some practical steps to consider and the supports that are available if you are faced with the need to temporarily close your business.
Dealing with short-term cash flow challenges
- Determine what are the cash needs of the business by preparing a cash flow statement for the next 1-3 months.
- Talk to your suppliers and discuss increasing your credit terms for existing unpaid invoices. Cancel any reoccurring orders.
- Put a freeze on all purchases to control your variable costs.
- Where possible, convert fixed costs to variable costs.
- Revenue have announced details of the measures introduced to assist SMEs experiencing difficulties during the crisis. Further information on this can be found here.
Talk to your bank or finance provider
- Your bank will support you through this period so talk to your relationship manager in your bank or financial provider promptly.
- Discuss with them what proactive measures you are taking to manage cash flow and what your working capital requirements are.
- Many banks are offering emergency working capital loan facilities, payment flexibility on existing loans or access to support funds.
- Discuss with them what supports are available and the cost or other implications of each.
Talk with your customers
- It is vital to maintain lines of communication with all stakeholders, and strengthen relationships with your most loyal customers. Keep your business fresh in their mind.
- Review current business on the books for the next few months and look to rebook any business that you have not already done so.
- Try to find new ways of working with customers, new ways to generate revenue, and new technologies that can solve challenges and identify opportunities.
Insurance
- Check if your insurance policy covers you for an interruption in your business, or a temporary business closure, caused by Covid-19.
- Look to reduce your premium by adjusting your coverage to property only.
- Your insurance policy may include an “unoccupied premises warranty” clause. You should review your policy to ensure this clause is adhered to if your property is closed. Such clauses may include warranties that frequent inspections of the property are carried out when it is vacant.
Employees
- Expect that further measures or details to be announced in the coming days as the government department and various bodies work through the formalities and procedures of the supports.
- As much as possible you will want to try to retain key staff, as they will be required for the reopening of the business when this occurs.
- Employers, who have to cease trading because of the impact of social distancing, and are able to continue to pay workers they will be able to claim refunds from the Department of Employment Affairs and Social Protection. A temporary refund scheme has been established for this purpose. A temporary wage subsidy of 70% of take home pay up to a maximum weekly tax-free amount of €410 per week to help affected companies keep paying their employees. This is the equivalent of €500 per week before tax. This means that workers retain their link with employers and there is no need for them personally to submit a Jobseekers claim.
- If you have to close your businesses and send an employee home, this is called a temporary lay-off. If the business cannot pay, then an employee can apply for an emergency COVID-19 Pandemic Unemployment Payment of €350 per week (an increase from €203).
- If an employee has to self isolate because of contracting the illness they can apply for a COVID-19 illness payment of €350 per week.
Utilities
- Ensure all unnecessary utilities are kept switched off and the water installation is monitored to ensure there are no leaks, etc. It is important to have your power supply maintained to keep all essential services operational.
- Where possible, ensure pest control is maintained while your property is closed.
Security
- If your property is closed, adequate security measures should be put in place. Ensure that properties are securely locked and all security systems in place are working.
- As set out above, you may be required to inspected your property frequently pursuant to your insurance policy. This should be done whether this clause is in place or not for good order. Such inspections should be recorded to safeguard against any attempted non-payment of claims from your insurance provider.
Communication
- Ensure you have the correct contact numbers for all staff and share these with the team.
- Contact your suppliers to let them know you are closing temporarily.
- Update your website and post on your social media channels to allow your customers to know you have closed and to keep an eye out for updates.
Government supports
€200m SBCI working capital scheme for eligible businesses
€200m package for Enterprise Supports through Enterprise Ireland
Loans up to €50k for small businesses where a reduction in turnover is projected at over 15%
Credit Guarantee Scheme through SBCI. Loans of up to €1m at terms of up to 7 years.
Contact our advisory team who are here to help any business facing challenges with Covid-19.
