Business advice

[rockits]

So my point was:

• if they claim it and then discover they don’t need it because their business is not impacted as much as they thought, or indeed they have profited from the crisis, they should be asked to repay it
• if they claim it and their business survives and they subsequently return to a minimum (tbd) level of profitability, they should be asked to repay it.

it doesn’t seem unreasonable to me. What seems unreasonable to me is that the wider taxpayer population should be asked to pay for this support for businesses that can afford to repay it in the future. For example, a pensioner who has worked hard all his or her life, never taking any benefits from the state, saving into a pension for their future, to now find that their future income is reduced and they are perhaps paying more tax on it. Just an example......there are many who will get no support under the currently announced packages but will pay for them, who may feel reluctant to pay for small business to “take a breath and enjoy life a little”

I do agree that people shouldn't take it if they don't need it scenario but how do you police or organise this. If your business needs it in 3 months you won't get it and might not survive.

I guess it a kin to panic buying and bulk buying. Really uneccesary in the short term and we haven't done this personally

To clarify I will put myself in the category of I would like to take a breather and enjoy life just a tiny bit. I have done 60-100 hours a week for over 25 years. Some won't work those total hours in their lifetime!

Unfortunately it seems to govt or others often won't help you unless you ask or take. Sad fact and I don't necessarily agree with.

The problem for me is would be focussed on making sure people don't get stuff they don't need or deserve all the time....not just now. Why is now any different?

 

[rockits]

A good point Robert. I think the Government should have offered loans rather than grants to small businesses. Giving grants opens up the door to people claiming it irrespective of need. A loan on the other hand, people think carefully about claiming it. Only those who need to "stay afloat" will claim it and it makes a difference to them. The loans can be at BoE base rate and repayable over a long period. Perhaps a 5 year window with no repayment due until January 2022 and term of 5 years to December 2026.
Only people who are confident and capable of managing their small business through this situation will put their business into a tough net increased gearing position.

Not in total agreement with that really. How is a loan going to help medium to long term. Just a short term plaster worry about it tomorrow. If that is the aim it will achieve it but it won't go away.

Some businesses are failing fast. Some of our customers have zero revenues overnight and no idea when they might be able to open their business again. Then when they can at what level? No loan is going to fix this issue.

It is just deferring the debt and pain that will just happen later down the line.

 

[Wack61]

Don't get me started though on premiership football clubs and players needing to claim their 80%.....well upto £2.5k of course. To me this is an entirely different situation completely. The average player earns £70k per week. Daniel Levy isn't short of a few million. Not sure why Spurs need to claim it. Might make me not want to support Spurs or football full stop after that!

These are the very clubs and players that were accused of having offshore tax setups to reduce tax from what they should have been paying.

is that really happening

 

[GeoffCapes]

The way I look at the grant is no different to those who have been furloughed.
But to ensure there is a business there when all this is over, we get the grant.
The difference with businesses, is that they have ongoing running costs even when there is no work.
99% of my income comes from schools and hotels. Both of which are closed for the foreseeable future.

 

[CatmanV2]

It's reported that several clubs have furloughed their non-playing staff to save costs while keeping players on full salary

C

 

[rockits]

As long as the footballers themselves and managers or other highly paid staff at these clubs aren't benefitting then I'm OK with the core staff benefiting of course.

 

[rockits]

Just been speaking to me neighbour who has a long standing nursery business passed down from dad to son. Established and built up over many many years.

They have pretty much zero revenues overnight, have to still keep some core PAYE staff on at full pay to do full time jobs to maintain the plants etc.

This is at the start of their busiest time of year. Their business could go under in weeks if they don't generate decent revenues soon. They can only reduce costs to a certain level.

The only option they have is to take out massive loans they have no idea they will be able to pay back and/or cash in pensions or remortgage. That really isn't very easy.

Not sure these grants are going to keep these business afloat as the problem is much bigger and longer lasting.

 

[Rwc13]

The way I look at the grant is no different to those who have been furloughed.
But to ensure there is a business there when all this is over, we get the grant.
The difference with businesses, is that they have ongoing running costs even when there is no work.
99% of my income comes from schools and hotels. Both of which are closed for the foreseeable future.

I’m not saying businesses shouldn’t apply for grants and get them now. I’m just saying that after this is over, the Government should look at all the businesses that got them and see if they really needed them/can afford to repay them. There are lots of ways of doing this, eg as part of an audit (where required) or through tax returns. And those businesses that have continued to trade profitably or who have returned to profit within a reasonable period of time should be asked to refund the grant.

And no it’s not the same as furloughing staff who are on a salary. And I am all for encouraging businesses to keep staff on. I am talking about looking at profitability over a reasonable period of time after the business has paid its bills, salaries and reasonable director drawings and dividends.

I’ll give you an example. I rent a few commercial properties. The small business occupiers were not slow at all in asking me to not pay rent whilst they are closed. At the same time they are furloughing staff and applying for every grant available, none of which they are proposing to use to pay their rent in the short term. And that’s fine. I want them to survive and be future tenants. But I’m losing my pension income and nobody is offering me a grant. My response has been to agree to defer their rent until we see how this all pans out and how quickly they are able to reopen and how quickly their incomes revive. Then we can discuss what they owe, whether we agree to write it off, or whether we agree a deferred repayment schedule. So, if you like I’m offering them an interest free “grant” potentially repayable depending on future circumstances. Seems fair to everybody, no?

 

[rockits]

RWC.... you're making a conscious business decision to keep your customer happy and keep a tenant medium to long term to protect your pension income. I understand that, I would do the same and it makes sense. If you don't so this and lose a tenant it is possible you wouldn't get another. You will always have that property and the possibly to let it though.

I'm talking about businesses that wont have a business in a matter of weeks possibly. There is no short term pain for long term gain. It is a matter of survival.

If they lose their businesses they could lose their homes and the domino effect unfolds.

I know many businesses that we have and do work for that cannot afford to pay us and have no revenue or business overnight. If they don't return to business and profitably we may never get paid. Everybody loses. The govt grants do not resolve this.

I have no idea how to resolve it. However it just seems to me that the domino effect and pain might be quite hard for some time to come.

Everybody will soon be scrabbling to get whatever they can as quick as they can before it all comes tumbling down.

We are.not directly affected as a business but are becoming affected on a secondary level as business scale down reducing products/services and not paying bills. We get no grant to assist us but are used to fending for ourselves anyway.

 

[Rwc13]

Am I talking in a different language?

Clearly, if a business fails it will never repay the grant.

If the business does not return to a reasonable level of PROFITABILITY it will not repay the grant.

You could even set a time limit, eg if the business doesn’t return to a reasonable level of profitability eg within 5 years, it doesn’t repay the grant.

This really isn’t difficult, it just means that those businesses who only suffer a short term (tbd) drop in PROFITABILITY, ie after they have paid all their operating costs, repay the grant to reduce the burden on the wider tax paying population.

 

[rockits]

Am I talking in a different language?

Clearly, if a business fails it will never repay the grant.

If the business does not return to a reasonable level of PROFITABILITY it will not repay the grant.

You could even set a time limit, eg if the business doesn’t return to a reasonable level of profitability eg within 5 years, it doesn’t repay the grant.

This really isn’t difficult, it just means that those businesses who only suffer a short term (tbd) drop in PROFITABILITY, ie after they have paid all their operating costs, repay the grant to reduce the burden on the wider tax paying population.

Clearly.

Some people's businesses are their pension and future. If it disappears grant or no grant, paid back or not they have nothing. Some maybe less than nothing. They might be middle aged or old and will need to start from square one or less. It isn't going to be easy for some for sure.

I think I must live on a different planet sometimes. I am just a simple man and many of these issues and fixes are often due to increased complexity that I just don't understand.

How is a rates grant going to help someone find £100k to pay bills at the end of the month? It won't only revenues will....which have stopped....you can only reduce costs down to a certain level.

I'm not sure some businesses were that profitable and have substantial cash reserves to get passed to the first month or two let alone further ahead. What they are left with after this is also a worry for many.

I'm possibly just starting to feel we are doing more damage than good in some aspects.

 

[Phil the Brit]

Did I miss something, I thought businesses were being offered LOANS, not grants. Loans from a bank at preferential rates?

 

[Phil the Brit]

I’m not saying businesses shouldn’t apply for grants and get them now. I’m just saying that after this is over, the Government should look at all the businesses that got them and see if they really needed them/can afford to repay them. There are lots of ways of doing this, eg as part of an audit (where required) or through tax returns. And those businesses that have continued to trade profitably or who have returned to profit within a reasonable period of time should be asked to refund the grant.

And no it’s not the same as furloughing staff who are on a salary. And I am all for encouraging businesses to keep staff on. I am talking about looking at profitability over a reasonable period of time after the business has paid its bills, salaries and reasonable director drawings and dividends.

I’ll give you an example. I rent a few commercial properties. The small business occupiers were not slow at all in asking me to not pay rent whilst they are closed. At the same time they are furloughing staff and applying for every grant available, none of which they are proposing to use to pay their rent in the short term. And that’s fine. I want them to survive and be future tenants. But I’m losing my pension income and nobody is offering me a grant. My response has been to agree to defer their rent until we see how this all pans out and how quickly they are able to reopen and how quickly their incomes revive. Then we can discuss what they owe, whether we agree to write it off, or whether we agree a deferred repayment schedule. So, if you like I’m offering them an interest free “grant” potentially repayable depending on future circumstances. Seems fair to everybody, no?

Write it off, you are joking right. You are not being given free money so you have to "suck it up"?
I'll tell you what, there are a whole lot of people who are looking for a free ride right now. You are expected to pay for the ride? No chance.
I also rent properties (just two) and one just paid 1/3 rent on direct debit. Didn't discuss it, just paid a third. Not a by your leave or nothing.

 

[rockits]

Yes loans are offered but there are some local grants for business tenants who rent/lease business premises given a.short term grant to assist with paying rent/rates I understood.

 

[ScaldedCat]

Just been speaking to me neighbour who has a long standing nursery business passed down from dad to son. Established and built up over many many years.

They have pretty much zero revenues overnight, have to still keep some core PAYE staff on at full pay to do full time jobs to maintain the plants etc.

This is at the start of their busiest time of year. Their business could go under in weeks if they don't generate decent revenues soon. They can only reduce costs to a certain level.

The only option they have is to take out massive loans they have no idea they will be able to pay back and/or cash in pensions or remortgage. That really isn't very easy.

Not sure these grants are going to keep these business afloat as the problem is much bigger and longer lasting.

 

[CatmanV2]

As long as the footballers themselves and managers or other highly paid staff at these clubs aren't benefitting then I'm OK with the core staff benefiting of course.

Well it's tricky (like everything) The clubs are saving money by furloughing their cheap staff but still paying £eek to the players every week.

C

 

[ScaldedCat]

Just been speaking to me neighbour who has a long standing nursery business passed down from dad to son. Established and built up over many many years.

They have pretty much zero revenues overnight, have to still keep some core PAYE staff on at full pay to do full time jobs to maintain the plants etc.

This is at the start of their busiest time of year. Their business could go under in weeks if they don't generate decent revenues soon. They can only reduce costs to a certain level.

The only option they have is to take out massive loans they have no idea they will be able to pay back and/or cash in pensions or remortgage. That really isn't very easy.

Not sure these grants are going to keep these business afloat as the problem is much bigger and longer lasting.

Our family business is wholesale ornamental plant production established around 35 years. We currently produce 1 million plants a year and are small fry compared to some. Several of our customers produce between 5 and 12 million plants a year and sell to the supermarkets and large DIY stores, a lot of which have decided not to offer plants at this time. The volumes produced for the spring and summer markets are vast, and although growers are doing as much as possible to shift stock through other channels it is nigh on impossible to move it quickly enough when the major outlets are closed. Nurseries cannot just shut up shop, the stock can't be put on a shelf until this dreadful time is over, and it is only possible to hold these plants in a saleable condition for 3-4 weeks, after that they are only fit for the bin resulting in a total loss. There are a lot of businesses in this sector that will go to the wall as they are not eligible for much in the way of help.
We are luckier than some as we supply farm shops which are allowed to trade but our output is about 80% down. We have furloughed all of our staff except for three to keep this level of sales and maintain the crop in the, probably rather forlorn, hope that we will continue to sell. We have also had to let go the 4 young Lithuanians who started with us on the 3rd March (4 days too late to allow us to furlough them as well) but hopefully have managed to place them a large soft fruit grower nearby, as they cannot even get home.
We shall carry on, although, depending on when the furlough system is withdrawn, we may still have to make staff ( some of whom have been with us for 30 years) redundant as we will be going into the quietest time of the year with no guarantee that the virus won't spike again in the winter with another shut down. I can't see us really starting up again until this time next year and who knows what trade will be like after this shock to the economy. It's a heart breaking situation that we fear may be too much for some to bear.

 

[Silvercat]

Our family business is wholesale ornamental plant production established around 35 years. We currently produce 1 million plants a year and are small fry compared to some. Several of our customers produce between 5 and 12 million plants a year and sell to the supermarkets and large DIY stores, a lot of which have decided not to offer plants at this time. The volumes produced for the spring and summer markets are vast, and although growers are doing as much as possible to shift stock through other channels it is nigh on impossible to move it quickly enough when the major outlets are closed. Nurseries cannot just shut up shop, the stock can't be put on a shelf until this dreadful time is over, and it is only possible to hold these plants in a saleable condition for 3-4 weeks, after that they are only fit for the bin resulting in a total loss. There are a lot of businesses in this sector that will go to the wall as they are not eligible for much in the way of help.
We are luckier than some as we supply farm shops which are allowed to trade but our output is about 80% down. We have furloughed all of our staff except for three to keep this level of sales and maintain the crop in the, probably rather forlorn, hope that we will continue to sell. We have also had to let go the 4 young Lithuanians who started with us on the 3rd March (4 days too late to allow us to furlough them as well) but hopefully have managed to place them a large soft fruit grower nearby, as they cannot even get home.
We shall carry on, although, depending on when the furlough system is withdrawn, we may still have to make staff ( some of whom have been with us for 30 years) redundant as we will be going into the quietest time of the year with no guarantee that the virus won't spike again in the winter with another shut down. I can't see us really starting up again until this time next year and who knows what trade will be like after this shock to the economy. It's a heart breaking situation that we fear may be too much for some to bear.

I recognised this plight a few days ago, thousands of private nurseries with stock which they cant shift. ( and many with no online shop to do so) I'm not sure how to help but what I have done is written personally to Peter Jones (of Dragons Den fame) asking him to look at the opportunity of setting up a central online portal through which lots of private nurseries could use to sell their plants direct to the public, so long as their is a distribution network to ship the plants. Given there is a lock down and therefore a captive market for buyers of plants at this time of year, there must be a way of selling direct to the public, it just needs to be figured out how to do it and quickly. Which is why I have raised it with Peter Jones because he will have access to other entrepreneurs who might be better placed to help out. I dont know if this approach will gain any traction but it has to be worth a try.

 

[rockits]

Really sorry to hear this ScaldedCat. It must be a tough time with a massive amount to take in and quickly. Then make some big and tough decisions quickly. I think the speed of this is the thing that has surprised everyone and it is that that is causing so many issues.

I suggested they try to get a localised plan to create some quick easy saleable bundles to homeowners as quick as they can. Using local support groups and social media to get the messages out to as many as they can. You should be able to deliver.

There must be tons of people at home with more time on their hands than normal. Perfect time and weather to be planting stuff and doing gardening jobs.

 

[RoaryRati]

Our family business is wholesale ornamental plant production established around 35 years. We currently produce 1 million plants a year and are small fry compared to some. Several of our customers produce between 5 and 12 million plants a year and sell to the supermarkets and large DIY stores, a lot of which have decided not to offer plants at this time. The volumes produced for the spring and summer markets are vast, and although growers are doing as much as possible to shift stock through other channels it is nigh on impossible to move it quickly enough when the major outlets are closed. Nurseries cannot just shut up shop, the stock can't be put on a shelf until this dreadful time is over, and it is only possible to hold these plants in a saleable condition for 3-4 weeks, after that they are only fit for the bin resulting in a total loss. There are a lot of businesses in this sector that will go to the wall as they are not eligible for much in the way of help.
We are luckier than some as we supply farm shops which are allowed to trade but our output is about 80% down. We have furloughed all of our staff except for three to keep this level of sales and maintain the crop in the, probably rather forlorn, hope that we will continue to sell. We have also had to let go the 4 young Lithuanians who started with us on the 3rd March (4 days too late to allow us to furlough them as well) but hopefully have managed to place them a large soft fruit grower nearby, as they cannot even get home.
We shall carry on, although, depending on when the furlough system is withdrawn, we may still have to make staff ( some of whom have been with us for 30 years) redundant as we will be going into the quietest time of the year with no guarantee that the virus won't spike again in the winter with another shut down. I can't see us really starting up again until this time next year and who knows what trade will be like after this shock to the economy. It's a heart breaking situation that we fear may be too much for some to bear.

My local family run nursery has started doing home deliveries - he is really busy