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Do you have questions about the government's coronavirus support schemes - particularly for small companies?

Let me know and I'll do my best to help :-)
John Down
John Down
Chief Operating & Financial Officer

Replies4

  • John Down
    John Down
    Chief Operating & Financial Officer
    @Josh Stafford That's a tough one and I 'm sorry to hear it. Universal Credit is supposed to be the default fallback for the Self Employment Income Support Scheme. Your experience shows a clear support gap that government knows it needs to help further on - I raised it again in a call in April and the response was along the lines of "we're aware, and we're working on it".

    It must be extremely frustrating, but I know that IPSE and FCSA are lobbying government hard - check out IPSE's 1st May release for an update: https://www.ipse.co.uk/ipse-news/news-listing/coronavirus-ipse-activity-and-advice-freelancers.html
  • John Down
    John Down
    Chief Operating & Financial Officer
    @Joké Adejumo That's a great question. The answer is - frustratingly - 'it depends'. A bit of an essay follows, but I hope it helps.

    1. Is it a terrible time to launch a new business?
    Historically some fantastic businesses launched in recessions - AirBnb, Whatsapp, Groupon, Insta, Uber, Venmo, Pinterest & Slack all launched in the 2008-10 Great Recession. They were able to help people either to spend less / more efficiently, or to tap into new trends (e.g. sharing online / sharing economy). Building a strong team in a recession is also easier, as there is more talent available.
    The big negative is obviously cash. There is less small business funding around compared to 3 months ago, so an investor may ask for harsher terms. You can maybe get around this by having a rock-solid 'proof of concept', including strong evidence that third-party customers are really keen to buy your product in a post-COVID world.
    Also, in recessions consumers have less money to try out new products. So, as above, you'll need strong evidence that some customers really want your product (demand), they 'get' your messaging (marketing) and that you can sell it to that market via shops or online (distribution) before you launch. More on that below.

    2. Launch timing
    The big question is whether the business you planned pre-COVID will be in demand post-COVID. Many of your core assumptions may not longer be appropriate in the new environment, as so much is changing.
    I don't know about your business or circumstances, but it may be an opportunity to use this quiet time to learn more about your product, customer, distribution, marketing and potential suppliers using a post-COVID lens, as the dynamics around each will have changed hugely over the last 3 months. It will not be time wasted! You'd want to test all the above, refine based on feedback, and repeat the process as best you can before you think about a bigger launch. Trust me, time spent learning through experimentation pre-launch almost always results in huge time or cost savings down the track.
    Here's a good 'getting started' summary: https://www.koombea.com/blog/mvp-experiment/
    The key is to learn as much as you can about the new post-COVID market, your customers' new behaviours, what they now genuinely need in a product post-COVID, and how best to communicate with them and sell to them now.
    As you answer these questions, hopefully the timing of launching the new business becomes a bit clearer.

    3. Government help
    For a new company, there's a huge amount of support. The government runs a scheme called SEIS relief, which gives your first share investors 50% of their investment back in their next personal tax return. You have to jump through a few hoops to get SEIS relief, but most of the stuff the government needs (e.g. forecasts) you would need to create as a business plan anyway. But it's great for helping to get investors to invest.
    Here's a quick intro to SEIS: https://www.whatinvestment.co.uk/eis-and-seis-tax-breaks-explained-2381293/
    The government also has 'Bounce Back' loans for a year for small companies which may or may not be applicable to you.
    Caveat: You should always get professional advice before embarking on the above!

    I hope that's useful Jo - best of luck with the new business!
    John
  • Joké Adejumo
    Joké Adejumo
    Creative Project Manager
    Hey John, I do hope you're well! :)
    I have some slightly different questions for ya.

    Is now just a terrible time to try to launch a small business that was already in the works pre-coronavirus? If not, until when should I place this on hold? Would government support be available to newly established SMEs?
    J

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