An Accountant’s Guide To Starting A Business Post-covid
Crisis and opportunity for profit go hand in hand – and there’s nothing that says crisis like a pandemic. The COVID-19 situation has shaken the whole world’s previously established way of life, and as a result of the sudden movement, many businesses have fallen by the wayside. However, it is also these types of turbulent times that create the best entrepreneurial opportunities for startup companies of all sizes.
Difficulties With Starting a Post-COVID-19 Business
One of the most significant factors adding to the current downturn is the border restrictions that have become the norm around the world since the lockdown started. This has outright crippled or killed some sectors of the economy, as well as severely damaged others.
Restrictive health and safety regulations, social distancing rules, and the fact that they can be changed practically overnight, have added another layer of complexity to the situation.
Additionally, due to the global unrest on all fronts – societal, economic, political, etc. people are just stressed out. As a result, many of them have become more conservative in both their general spending and investing habits.
Those are just a few of the factors that negatively impact potential entrepreneurs. Many of them will challenge emergent businesses – but none of the difficulties they pose are unbeatable with flexibility, ingenuity, and perseverance.
Opportunities to Watch Out for When Starting a Post-COVID-19 Business
All the office space closed businesses used to occupy should now be free. Additionally, research shows that in the UK, there’s an epidemic aside from COVID-19 that affects landlords in particular – poor collection rates from tenants. Landlords who have failed to collect rent probably don’t want to miss out on future payments and may give you the opportunity to negotiate renting valuable space that would otherwise be beyond a startup’s reach. Take advantage of this fact.
Specialized equipment usually costs a lot, but it can be acquired cheaply from companies that are downsizing or undergoing liquidation. Almost half a million companies in the UK were classified as “distressed” at the beginning of Q2 2020, with at least 15000 “severely distressed” cases at the time. With this many companies undergoing financial difficulties, there are bound to be some who are in the process of closing down and selling off assets that you may take advantage of.
During times of high unemployment new entrepreneurs have access to human resources that are usually happily employed elsewhere. While it is true that government statistics in the UK don’t record unemployment, that’s only due to the fact that during the lockdown fewer people without jobs than usual are registered as seeking employment. Furthermore, the pool of potential talented job applicants is much larger than it may first appear.
Competition from other established companies is another problem for startups. However, with so many companies closing down these days, that may no longer be an issue. Take advantage of this.
Additionally, the restrictive nature of the current situation has forced people to reexamine and reimagine the way they do business and find new ways to tackle old problems – as well as new ones. As a result, many new niches have been created, and ones that were largely irrelevant have been expanded into booming industries. This is another thing you should use to your benefit.
Long story short – there are a lot of things to think about and put in order even before you start to put a business’ paperwork. Fortunately, you can also take advantage of the services of expert London accountants that could help you with that, as well as advise you about all the intricate details of starting a new business.
Essential Details For Opening a Business
While there are restrictions on activities imposed by the government on businesses, there are also active measures in place to stimulate the economic activity of said businesses. It is highly advisable that before setting up a business, you consult a professional to advise you what to do each step of the way.
Additionally, you should make sure you are aware of all available sorts of emergency financing and business relief available to you and be ready to take advantage of these benefits as soon as the necessity emerges.
Structuring your business cost-effectively is going to be critical to your success. Carefully consider costs and balance them against your assets.
Take the time to examine both your potential debtors and creditors or investors. Negotiate with all parties, try and devise mutually beneficial solutions to financial issues that may arise with them in future.
Ensure you structure any debt that you incur in a way that’s bearable by the business, to avoid insolvency.
Monitor the economic, financial, and legal situation for any developments that may concern you, and keep in touch with qualified consultants that may advise you on the matter.
If push comes to shove, always keep in mind that full liquidation is not the only insolvency option out there. In times of crisis, consult your accountant and creditors about the possibility of restructuring debt.
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