The coronavirus is undoubtedly the biggest challenge to businesses of all sizes and in all sectors for several generations. We spoke to UK-based investor and entrepreneur Matt Haycox from Funding Guru to try and make sense of how it's going to impact businesses now and in the future, what steps business leaders can take to survive and how to adapt your strategies to ensure you and your business make it through this time of huge challenge and uncertainty… Matt Haycox is a business funding expert and as such is primed with ideas on how businesses can deal with the cash flow issues that are inevitably coming as a result.
Q What's your reaction to this last few weeks?
A Obviously these are unprecedented, worrying times for us all. It's also a horrendous time for ALL businesses – and EVERYONE is going to be badly or very badly affected. There's no point in sugar-coating it. It doesn't matter if you're a large business, a one-man band or a wannabe entrepreneur, and it doesn't matter what sector you're in.
Another reality check – this has not even really started. We are a few weeks in so far with MUCH longer to go – so we haven't even begun to feel the true effects of it all.
BUT – this could be the big kick in the bollocks that forces many businesses to hit the reset button…and business owners need to get this into their heads and not shy away from it. Business is not on hold – it hasn't stopped. You can still grow your business by working your arse off, by taking risks, by being creative, adding value and always be pushing forwards. The climate right now will sort the boys from the men! Now is the time for Leaders to Lead.
Q Surely now is the time to stop paying anyone and keep what money you have for yourself?
A NO! NO NO NO and NO again!!
I've seen first hand and heard about many more business owners using coronavirus as an excuse to not pay their suppliers and to find other methods of gaming the system.
Here's the bottom line. If everyone hoards what money they have and doesn't pay anybody, the wheels of business are going to grind to a halt completely. Yes we are going to have tough choices about who we pay – whether you pay the one-man band who's been there for you since the start, or settle your British Gas bill instead – but we have to keep money moving around the economy otherwise it's all over and we might as well stay under our duvets and give up.
Treat you suppliers as you would like your customers to treat you. Be fair and communicate.
Q How can businesses and entrepreneurs react positively at this super hard time?
A Now is a very good time to think outside the box and build real goodwill with your customer base. No business leader should be wallowing in self-pity and worrying, stressing yourself out and passing this stress on to their employees. Think of ways to continue your business model – even in a very reduced capacity. If you're a restaurant – offer a takeaway service and promote it everywhere. If you're a dog walking service, put yourself out there now to help dog owners who are stuck inside self-isolating. It might only generate very limited revenue, but it will keep you visible to your customers, so when we all come out of this they'll remember you, how you helped them at this critical time and turn to you again.
Q How do I ensure me and my business are visible when the news and social media is full of just one story and probably will be for weeks/months?
A I talk about and write about all the time that there are no excuses for not creating content to keep yourself visible. Well now there REALLY is no excuse!! Fuck Netflix – get creating content! People always say that they're too busy to do this – well ‘busy' is bullshit anyway (I blogged about this recently) and now all I'm hearing is ‘I'm bored' and ‘how am I going to fill my days?'. Wake up! Turn this into a positive – now's a fantastic time to get creating blogs, videos, podcasts, live streams on facebook and Instagram…I can't stress enough that you have to have as many marketing channels as possible to stay in people's minds, even if you only get a handful of viewers. It's better to have less people that are interested than lots who aren't!
I'm still spending the vast majority of my time on business, but of course it's important to have interests and hobbies too. We all know that if you enjoy playing sport, going to the pub or eating out you can't do any of those things at the moment – so focus on things you CAN do! Learn a language, teach yourself a new skill…not many people know that I can play the piano, and also my first job was a magician in our local Italian restaurant! I stopped when I was about 18 and have never done it since, so I'm definitely going to pick that up again…watch this space!
Q Will there be any industries that grow during this period, and if so, which ones?
A Obviously, any industry which is looking for a vaccine, organisations making protective equipment such as masks and private hospitals which are going to be used by the NHS are likely to get a boost. But not many others.
Lots of SMEs in this country have been on the brink of disaster – ie bankruptcy – for some time. Frankly, the easy availability of capital over the past few years has been a sticking plaster for crap businesses – businesses that have not had enough wool on their backs. Coronavirus has arrived, so now they've now had barely any income for two or three weeks and are already learning they haven't got any mechanism in place to cope.
As I'm sure most of you know, my ‘day job' is funding businesses. Me and my team probably look at about 50 applications a week for business loans – from a huge range of business sizes in all sorts of sectors in the UK.
Here's the thing – so many UK SMEs are not actually making any money. The accounts might look reasonable on paper, but when you delve deeper they're running on zero cash balances, meaning that even the slightest disaster could push them out of business – and as we all know already, coronavirus is much bigger than that.
I've got no strong political views, but in my view the government have reacted pretty strongly and quickly to help businesses, with the 80% wage promise and various grants available. BUT if you've got a crap business anyway, even a £10k loan from the Chancellor will only act as a another sticking plaster – and unfortunately this time round the wound is too big for a plaster to buy you any more time!
Q With so many people now working remotely, do you think the business hub model will change?
A 100%!
I'm not going to pretend to be an expert on the WFH business model – because I've always hated the concept of it. But it's not that the model doesn't work – I've either had the wrong staff or the wrong procedures to police it.
Someone who is an expert on WFH is a friend of mine – Tim Cameron-Kitchen. His entire business model has always been remote – he runs a large business with 100+ members of staff spread right across the world, and you'd never know they weren't all sat together in the same office.
The new reality is that a lot of businesses are going to be forced to embrace the WFH model – and if they get everything about it right, many will thrive from it. I'm embracing it at this time so will be learning much more about it, just like many other business owners!
Finally – remember. Yes, the world has been turned on its head, but it's only going to be for a relatively short period of time. Every crisis has an end point and this one is no different. Follow the government's guidelines, stay safe, keep positive, keep the wheels of business turning and I'll see you soon x
Q:Is there any recent chats you've had about the corona virus that could be of interest?
Over the last week or so I've spoken to four people in very different sectors to find out more about coronavirus – don't worry, I've abandoned my usual sofa chats for now and used Skype or social distancing! The first was with Dr Robert Lambkin-Williams, a scientific consultant and an expert in virology and immunology who I had on the Matt Haycox show. I know what you're thinking, what does that actually mean?! It means he knows almost everything there is to know about illnesses and how the body responds to them. He gave me a great insight into how coronavirus started, what it actually is, how it affects people, precautions to take against it (stop press – wash your bloody hands properly – for 20 seconds!) and what ‘lockdowns' hope to achieve. I learnt so much.
Part two was more of a business focus with Andy Clayton. He's a successful entrepreneur who's been based in China for 15 years, which as we all know is where the virus started. He gave me a really interesting perspective on how life has changed there over the last few weeks and months, how businesses have been hit and how they've tried to adapt.
My third coronavirus themed interview was with Laura Spinney, a science journalist and author of ‘Pale Rider: The Spanish Flu of 1918 and How It Changed The World'. She was very pragmatic and realistic about coronavirus and how it's going to have a huge long-term impact globally.
My most recent chat was with a good friend of mine, the no-nonsense businessman, accountant and entrepreneur Paul Cheetham-Karcz. This was a straight up, no bullshit discussion covering the government's move to guarantee 80% of employees' salaries affected by coronavirus, how we all need to take responsibility for keeping business moving, showing leadership at this time and much more.
DISCLAIMER From Matt Haycox: As well all know this is a rapidly changing situation so some of the information may be slightly out of date – but the business advice stands!
https://finance.yahoo.com/news/matt-haycox-corona-virus-means-133001901.html