Finance

Managing Your Business Beyond the Furlough Scheme

In response to the international pandemic of COVID-19, the government enacted its furlough scheme, contributing 80% of an employee’s wages on behalf of the business. This vital fund, supporting over 7.5 million job positions, will be the necessary support that allows some businesses to survive the disruption to their services.

 

Currently, the scheme is set to end in October, with the government looking to allow businesses the ability to open and return to normalcy earlier, so as to support the economy. However, beyond this support, and in a world still deeply affected by the coronavirus, businesses will have to manage their operation strictly if they are to survive.

 

 

Reassessing the Workplace

 

For some retailers and hospitality venues, the concept of working remotely isn’t possible. However, for traditionally office-based businesses, the period of lockdown has proven that many tasks can be done remotely. Since many businesses have already begun utilising remote working, it is unlikely that many will return.

 

Not only will employees continue to be cautious of potential infection, even beyond the coronavirus spikes, but the running costs of property will not be appealing to businesses who are looking to keep their running costs low. While many are changing their infrastructure out of necessity, they may maintain it out of preference.

 

Payroll Caution

 

The furlough scheme will eventually end and following its final payment, the government will aim to reclaim the money as swiftly as possible so as to ensure greater economic stability. While the extent of this return is still unknown, we can be sure that there will be increased scrutiny upon businesses to ensure taxes are paid properly and promptly. There may also be changes to tax codes and regulations, which will require a business to update their current practice.

 

For this reason, ensuring your payroll is compliant will be more important than ever. Those businesses with a more complicated employee and contractor structures will need to seek defences, such as umbrella payroll from People Group Services, which will ensure that their obligations to the government are met.

 

Digital Presence

 

Technology has allowed many businesses to continue their operation while physical stores and offices are closed. Many are adapting their services to meet online demand while others, such as Primark, have closed without any digital presence at all, reducing their profits to zero.

 

Whether meeting with clients or selling products, having an established digital platform on which to do so, as well as the accompanying social outreach, will be necessary to supplement a compromised footfall.

 

Adapting Your Product

 

Customer preferences have changed. In the pursuit of recovering revenue, businesses must now reconsider their product and how it can be catered to a new market. It will also prompt many to take on new endeavours, to fill new areas of customer demand.

 

This has already been seen in the sudden rise in-home fitness equipment, challenging the long term viability of gyms. Some fitness centres have begun renting their equipment out and offering online fitness classes so as to adapt to a new market. When they are able to reopen, even if their on-site custom remains low, these adapted products will allow them to continue.

 

 

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