Andy Pear of BM Advisory explores the challenges faced by businesses in and around Gatwick and offers advice to business owners to help navigate these challenging times and emerge resilient for the future:
Gatwick Airport has been the beating heart of West Sussex during the past decade, creating tremendous opportunities for jobs across the region.
The recent challenges for the airline and travel sectors brought about by COVID-19 have been well documented and the Gatwick region is perhaps now more exposed than many parts of the South East due to its reliance on the airport.
Passenger numbers at Gatwick fell from 22.2 million to 7.5 million over the first half of this year and it would seem the second half is unlikely to see the level of bounce back that the region had been hoping for. This has created unique challenges for many of the small businesses that rely on the activity flowing from the airport, including hotels, B&B’s, taxi firms, parking, catering, packaging and many more.
Whilst the levels of Government support have been unprecedented and unlike anything we’ve seen before in peace time, the furlough scheme is now being phased out to be replaced by the job retention scheme and many businesses are carrying more debt than they did at the start of the year. Preparing budgets and forecasts in the current circumstances is also extremely challenging and subject to a high degree of variance, which can create issues in accessing debt or renewing existing facilities.
Travel restrictions and social distancing measures have seen many firms having to adapt very quickly by pivoting their business model to service new markets or move to an online delivery model. Other firms have had to enter some degree of hibernation, whilst seeking forbearance from landlords and other key creditors. The pace of change in some sectors has also been exceptional with the adoption of new technology and e-commerce platforms taking a quantum leap forward.
For Britain, the IMF predicts the economy will decline by 9.8% this year, less than the 10.2% forecast in the summer, and for 2021 the IMF expects Britain to see a recovery of 5.9%. Looking at the global picture, IMF chief economist Gita Gopinath warned that there is “tremendous uncertainty” about the future. On the impact of a second wave of COVID-19, she added that “the toll on economic activity would be severe, and likely amplified by severe financial market turmoil”.
The next few months will be key in terms of how the UK manages the second wave of the pandemic.
Here are 5 steps businesses should be taking now to correct the course and help to avoid disaster:
1. Look to the short term – review your cashflow and prepare a realistic budget in line with projected income for the next few months
2. Cut costs – consider what non-essential expenditure can be reduced or avoided now and apply for the Government support schemes that are still available
3. Renegotiate payment terms – with landlords, suppliers and your bank, should you be concerned about meeting any loan commitments
4. Review your insurance policy – to establish whether you may be able to claim for any financial losses
5. Ask for help – speak to a local business specialist for independent advice on cashflow, strategy and the most suitable options available to you
If you or your business are struggling, and you’d like a second opinion on the way forward, then now is the time to take advice. As a small team of local restructuring experts, BM Advisory provides the skills and expertise on your doorstep to help support you and your business through this challenging period.
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Seeking professional advice now is even more important than ever. Our initial consultation is always free of charge and without obligation, so you have nothing to lose from seeking our help.
“I have consulted with BM Advisory on a number of occasions, as a potential purchaser for a struggling business, for invoice factoring, business advice and sadly even an administration. If you are experiencing business issues that could lead to serious problems, or you just need a second set of eyes which may well save your business, then I would highly recommend the team at BM Advisory. Their professional advice is first class and their step by step guidance and solution driven approach has proved invaluable to me and my business” ~ MP, local business owner and Gatwick Diamond member