With Covid-19 still very much upon us, businesses are continuing to feel the burden of trying to survive. For those businesses that have adapted and reported positive growth, there are those that are still suffering and searching for an escape route, especially those that have no online platform.
Cory Bebb, Partner and Licensed Insolvency Practitioner at JMW Solicitors, shared an insight into their view and what help is out there if all other options have been exhausted. As Cory eludes to first, businesses with little or no online presence are being hurt the most.
"Almost every non-online business has been adversely affected by the effective suspension of the economy as a consequence of the Covid-19 Pandemic, one way or another. Clearly some businesses have been harder hit than others, such as retail and hospitality where they have had to close their doors for a prolonged period. Office based businesses such as professional services have been impacted to a lesser extent, having adapted quite well to home working."
Thankfully, help is on hand and for Cory and the team at JMW Solicitors, providing a clear path for businesses who are unsure of what may lay ahead is key to their profession.
We can explain the options available to a business in difficulty, which will range from ceasing to trade, to rescuing the business as a going concern. There are various options which allow a viable business to reduce or write off historical debt, and continue to trade into the future.
Businesses may be in the same boat when it comes to dealing with this pandemic, but there is "no one size fits all approach" when it comes to identifying the rocky terrain.
"Every business is different," Cory continues. "There is a very specialist insolvency profession waiting to provide advice to a business in financial difficulty, with most offering free initial consultations.
"The key is to obtain advice as early as possible from a licensed insolvency practitioner, because the later this is left, the fewer the options. Directors of limited companies are under statutory duties to seek specialist advice when a business is in serious financial difficulty, otherwise they run the risk of personal liability for the debts of their company.
"We are all in new and unchartered territory. Businesses are currently avoiding formal insolvency processes, mainly due to Government financial support and restrictions on creditors commencing proceedings against businesses for unpaid rent and bills.
"Business owners are also taking a ‘wait and see’ approach before doing anything. However, these restrictions and support will come to an end and we expect to see a dramatic increase in formal insolvencies such as liquidations and administrations during 2021."
So what is the immediate advice, especially for furniture businesses?
Cory points to one approach as a clear "must" if not doing already and that is taking advantage of digital.
The Covid-19 Pandemic has, without a doubt, accelerated the transformation of the already struggling High Street, and so retail businesses are turning increasingly to an online presence. The virtual showroom for furniture retailers is a must.
"Whilst traditionally, this industry has required ‘touch and feel’ consumers are purchasing large high cost items online more and more."
This has been evident in recent sales data and there have been a fair few success stories of businesses boasting increased online activity, which has turned into record revenues.
For those businesses still in "wait and see" mode, the time - if not before, is most certainly now to go digital, ramp up online and join the movement of consumer behaviour that is shopping through a screen.
For those businesses that can't see a path ahead, firms like JMW are here to help.
"If any business owner does not think they will be able to pay all of their debts in the short term, then they should seek advice from a licensed insolvency practitioner but check that the initial consultation is free," Cory concluded.