Struggling after Covid? A small business guide

If your business is struggling and you need help with finances or mental wellbeing, read our guide to Covid recovery for start-ups.

Although coronavirus pandemic restrictions are easing across the UK and businesses are beginning to recover, your start-up might still be struggling. If you need help with your start-up's finances or advice on improving your mental health, this guide outlines schemes and resources you can access.

The coronavirus pandemic has had a massive impact on millions of businesses across the world. With strict lockdown restrictions imposed, many firms have experienced significant falls in customer numbers and revenue. On the other hand, some businesses, particularly those selling consumer products online, have seen increased demand.

Restrictions are now beginning to ease across the UK and thousands of businesses have welcomed customers back. Many founders are still struggling though, both in terms of the impact on their finances and the effect on their mental health and wellbeing. If that's you, it's important to remember that you are not alone and many other entrepreneurs are in the same boat. It is still possible to access funding to see you through the pandemic and use resources to help you improve your mental health.

If your business is struggling financially...

Government grants

If you run a leisure, hospitality or retail business or you are a supplier to such a business some grants were still available until 30 September 2021. Find the latest grant information via these links:

• England
• Wales
• Northern Ireland

If you're a self-employed individual or a member of a partnership, you might be able to access a grant through the Self-employment Income Support Scheme (SEISS). A fifth grant opened to claims from late July 2021.

To be eligible, you must have traded in the tax years 2019/2020 and 2020/21 and have submitted your 2019/2020 tax return by 2 March 2021. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.

If your turnover decreased by 30 per cent or more between April 2020 and April 2021 as a result of coronavirus, you'll receive a grant based on three months' average trading profits up to £7,500. If your turnover decreased by 30 per cent or less, the maximum grant you can access is £2,850.

Recovery Loan Scheme

The Government launched the Recovery Loan Scheme (RLS) to provide businesses with funding to help them recover and grow following the pandemic. It runs until 31 December 2021.

You can use the finance for any legitimate business purpose such as managing cash flow, growth and investment but you must be able to repay the debt.

RLS was available through several lenders accredited by the British Business Bank.

Lenders can provide up to £10 million as one of the following facilities:

• Term loan
• Overdraft
• Invoice finance
• Asset finance

Negotiating with landlords and suppliers

Businesses in England, Wales and Northern Ireland unable to pay rent on commercial property due to the pandemic are protected from eviction until 25 March 2022 under government legislation. In Scotland, the law applies until September 2021.

While this gives you some breathing space if you're struggling with rent, you should still look to negotiate a repayment plan with your landlord. It will naturally be a difficult conversation but at the end of the day, if your business completely fails, the landlord will get no rent so it's in their interest to listen to your request.

Be specific in terms of how long you want to defer paying your rent and offer a clear repayment plan with set dates. To show you're proactive, explain what else you have done to deal with the impact of the pandemic such as furloughing staff and reducing other costs.

You can also enter into similar negotiations with suppliers. Again, you should be specific, explain why you need to delay payments and when you intend to pay.

If you're receiving goods from multiple suppliers, it's worth considering transferring all your business to one supplier. They may be willing to provide a discount due to your larger order.

Read our guide to negotiation tactics.

Use invoice discounting or factoring

If you are experiencing delays in the payment of invoices owed to you, using an invoice discounting or factoring service could help. This involves selling your invoice to a third party and they advance you a percentage of the funds in return for a fee.

If you opt for a factoring firm, they will be responsible for collecting the debt from your customer whereas with invoice discounting, you continue to do that.

These services can be beneficial for fixing short term cash flow shortages but be aware that fees can be high and factoring companies can lock you into long contracts.

If you're struggling personally...

NHS Every Mind Matters

The NHS website provides expert advice and practical tips to help you look after your mental health and wellbeing during the pandemic. You can also complete a questionnaire to access a personalised mind plan with videos, audio clips and other resources that tackle issues such as getting better sleep and managing anxiety.

Support from Mind

Mental health charity Mind has been providing extensive support and advice during the coronavirus pandemic. It offers an information resources hub including tips on subjects such as working from home and managing staff remotely. You can also call Mind's infoline on 0300 123 3393.

Create a healthy work environment

Many start-up founders are used to working from home but with physical meetings and events tricky during the pandemic, there is much less opportunity to break up the day and meet other people which can lead to burnout. To avoid this, try and create a dedicated area for work that you can separate from your personal life. Take regular breaks and use technology such as Zoom, Teams and Google Meet to stay in touch with employees, customers and contacts.

Meet other business owners

Talking things through with other entrepreneurs who are experiencing similar challenges to you can really help. They may offer solutions and creative ideas you haven't thought about. You could even end up meeting another business owner who is interested in collaborating.

Business organisations and trade associations have increased their support during the pandemic with groups such as the Federation of Small Businesses, Enterprise Nation and IPSE offering various ways to meet other founders. The Government has a list of support offered by business representative organisations and trade associations.

Bouncing back

There are many lessons to learn from businesses' experiences during the pandemic. If you pivoted and made more sales online, that's a new audience you've attracted and one you can continue to engage with once the pandemic is over.

With travel restrictions causing an explosion in networking events online, you may also have made valuable new business contacts you might otherwise have never met. Nurture those relationships with a long-term view in mind.

There is no doubt that the pandemic has been very tough for many businesses, but entrepreneurship always presents challenges. If you adapt, embrace the new normal and find the opportunities, your business can bounce back stronger and better than before.