Cash Flow Management in a Crisis Blog Page

2020 Mar 18

Cash Flow Management in a Crisis Blog Page

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Last Updated: 30 March 2020 at 12.18

This blog will be updated regularly for anyone seeking help and assistance on managing their business and cash flow during this crisis. Please bookmark and share this page as we are updating this regularly.

As we all know, this is just the beginning, so we need to prepare for the worst case scenarios that may happen to our lives and businesses, this page is all about helping you with your business and your cash flow.

Keep Safe. Keep Healthy. Keep Positive.

Arun and the whole Samera Team

Blog Content:

Day 14 – How to use the cash flow template tool

How to use the cash flow template tool

We have had hundreds of dentists download our cash flow template tool over the last week, but I thought I would put a short video on how to use it. It’s not rocket science but may help you with managing your cash better in your business or life!

CASH IS KING currently.

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

Day 12b – Government Grant Guidance

Government Grant Guidance

From yesterday’s webinar there appeared to be some confusion around what local authority grants are available.

There is a small business grant fund where some dentists maybe able to receive this grant. This will depend on your particular situation.

Further details on the followinglink:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/875348/small-business-grant-fund-and-retail-guidance-v2.pdf

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

Day 12a – The Stoic Dentist – Our Life is What our Thoughts Make it
The Importance of Stoicism during COVID – 19

The Stoic Dentist 

Covid-19 Through a Stoic’s Eyes

Over the last few weeks (and undoubtedly over the upcoming months as well) you must have heard a thousand and one different perspectives on the current Coronavirus situation. From medical experts to economists to politicians, every man and his dog has got a point of view. But why don’t we take a step back and ask ourselves “how would the great minds of antiquity have approached this unfolding crisis?”. 

In this time of panic-buying and sensationalist media, perhaps we would do well to consider how the Stoics would have reacted to such an event. 

What is Stoicism? 

As the modern usage of ‘stoic’ suggests, stoicism is a philosophy concerned with the mastery of one’s emotions. It is important to note that stoicism does not advocate for suppressing emotion in the way the contemporary word may imply. Stoics sought (and seek) to master their emotions; to control them, as opposed to being controlled by them.

The Stoics posited that negative emotions such as fear, envy, jealousy etc are derived largely from false judgements, as opposed to being purely uncontrolled gut reactions. Put simply, when the world throws something our way, it is up to us how we respond to it. 

If we respond in the wrong way or make an incorrect judgement about the world, we react negatively. Negative emotions are, therefore, a product of our own mistakes, our own indiscipline in governing ourselves. 

You choose how to react

Stoics saw philosophy as more than just a pastime or merely an intellectual pursuit; to them it was a way of life. 

They saw the Stoic philosophy as a practical exercise, always actively concerning themselves with the mastery of their emotions, actions and reactions. 

They called the gut reactions and immediate emotions you feel – ‘impressions’. Of course, you have no control over what impressions you feel. If something terrible comes your way (such as the current COVID-19 pandemic), you are naturally going to react in some negative way! 

Despite what some may believe, Stoicism is not the same as being unfeeling. They are not expected to become robots, just disciplined! 

You do not have a choice or control over what impressions you feel, but Stoics believe that you do have the ability to validate or agree with that emotion. They call this ‘assent’. This ability to either agree with and accept an emotion, or deny and refuse to react to (or because of) an emotion is what Stoicism is all about – discipline. 

Since we always have the power to either assent to an emotion or not, the ability to control our emotions is always within our grasp. We just have to be emotionally disciplined enough. 

Overcoming Fate

Stoics believed in causality and fate. They believed that one thing causes another and that the subsequent outcomes are in some way directed or inevitable, in other words – fate. So what room is there left for us to be free and to make real choices? 

Our freedom comes from our ability to choose how to react to what fate throws at us. If I throw an object on the floor, its shape will determine what happens when it lands – will it roll, smash or bounce? Me throwing the object is fate, what happens next depends on the object’s nature. If we imagine ourselves to be the object, what happens to us after fate plays its part depends on our nature. It depends on the kind of person we are, it depends on how we react to destiny. 

If you are the kind of person to roll with the punches, you’ll roll. If you’re the kind of person to bounce back, you will. And if you’re the kind of person to fall apart, that’s what will happen. But as we said earlier, your reaction to fate or to emotion is entirely up to you. It is your choice. Your nature is your choice. Who you are and what ultimately happens to you is firmly in your hands. Fate plays its part, but that’s only the beginning!

Planning around fate 

So, how far can we plan our lives and our businesses if we are subject to fate? Does this mean that the Stoic Dentist is concerned merely with passively reacting to whatever fate decides to hit them with? Absolutely not. The stoic believes that freedom comes from two things:

1. Planning for what you CAN control

2. Mastering your reactions to what you CANNOT control. 

Once you can do this, events outside of your control, such as a novel virus, only impact you emotionally as much as you let them. 

If I plan to host an Invisalign open day in my practice and I spend thousands of £’s advertising and setting it up, only to have a global pandemic get in the way, was I wrong to make plans? No, of course not. The virus was completely out of my control. What IS in my control is how I respond to the crisis. How quickly I act, how calmly I act, how altruistically I act. 

Problems arise when we try to plan for things outside of our control – when we try to plan what can’t be planned, to change what can’t be changed. Fate will get in the way sometimes and we need to accept this and respond to the situation accordingly. 

The Stoic is open and honest about what can be planned, mastered and accounted for. Everything else is uncontrollable, all we can do is master our reaction to it. Fear is not a choice, it is a natural gut reaction (or impression) to something fate throws our way. 

Panic, on the other hand, is a choice. Panic is ungoverned fear. Panic is emotional ill-discipline. The stoic feels fear, but they do not panic. They control their fear and make their decisions based on reason. They plan for what is within their control.

One of the most famous Stoic philosophers, Marcus Aurelius, once said that “Every nature is satisfied with itself…when it generates desires and inclinations for only those things that are in our power, and when it welcomes everything to it apportioned by nature.” 

If you can control your reactions to emotions and suppress all negative reactions you will ‘welcome everything apportioned to [you] by nature’. In other words, you’ll take every crisis as an opportunity. Every set back as a chance to spring forward. Every mistake as a chance to learn and improve. 

The Stoic Dentist

So, what does this tell us about the stoic dentist and how he would handle the COVID-19 crisis? We know that the stoic dentist would not give in to panic, whether this be in the form of making rash, irrational decisions regarding their business or even panic-buying a year’s worth of toilet paper and beans! The stoic masters their emotions. 

They do not suppress them and bottle them up – most psychologists would certainly advise against that! They control how it influences their decision making ability, they do not allow their emotions to govern their lives. They make decisions based on reason and a detached, objective viewpoint. 

The stoic dentist’s nature also plays a large part in how they respond to crises. Who they are and how they see the world will play a large part in how they choose to act. When fate throws you to the floor, will you roll? Will you bounce? Will you fall to pieces? That is entirely up to you. You need to take charge of your nature, become the person the world needs you to be. 

The stoic is also honest and open to themselves about what they can plan, what they can control. Fate throws a global pandemic your way? Plan for what you can control, master your reaction to everything else. 

You are in control, you just need to seize the initiative.

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

Day 12 – Further guidance from HMRC on The Coronavirus Job Retention Scheme

Further guidance from HMRC on The Coronavirus Job Retention Scheme

Further guidance has emerged about the Coronavirus Job Retention Scheme. You can read about it all on the following link:

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

There’s a lot to digest, but it’s quite clear about the government not expecting Public Sector organisations (such as an NHS dental practice) to be able to use this, assuming you receive funds to pay for staff. Whether you can furlough some employees that help generate private income, and not furlough others who work on the COVID 19 crisis is yet to be seen. I believe the BDA is trying to gain clarity around this point plus others.

Happy reading.

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

Day 11 – 7 Business Actions Every Dental Practice MUST now do in this downtime

Webinar Recording – 7 Business Actions Every Dental Practice MUST now do in this downtime

In this webinar recording, Arun discusses 7 Actions all Dental Practice Owners must now do in this downtime.

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

Day 10a – Disappointment for Self Employed Dentists

Disappointment for Self Employed Dentists

Coronavirus Self-Employment Income Support Scheme

This evening the Chancellor announced the Treasury’s plan to assist the self-employed. In summary a taxable grant will be paid to the self-employed or partnerships, worth 80% of their profits up to a cap of £2500 per month.

This will be available for three months in one lump-sum payment, and will start to be paid from the beginning of June.

To qualify:

  • More than half the claimants income needs to come from self-employment
  • Open to those with a trading profit of less than £50,000 in 2018-2019, or an average trading profit of less than £50,00 over the last 3 years.

Impact on Dentists

In my experience, many dentists who trade as self-employed will not qualify for this support as their income will be above the £50,000 threshold. This is a major blow to many dentists who will be struggling at these times whilst their income levels have dropped to zero.

The Chancellor mentioned that those not able to claim such a grant would be able to avail themselves to the other schemes they are offering, but in reality, many of these are just soundbites which many not be available for several months, whilst dentists still have to continue living their lives as normal as possible.

Extremely disappointing.

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

Day 10 – Furloughing Advice

Furloughing Advice

There is not much information out there currently on Furloughing, however, the ICAEW have released some guidance. This information is on the following link:

https://www.icaew.com/insights/viewpoints-on-the-news/2020/mar-2020/coronavirus-job-retention-scheme-furlough-guidance

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

Day 9a – Latest NHS England Guidelines

Latest NHS England Guidelines

Better late than never I guess!

You can download them here:

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

Day 9 – 3 Tools to help you in this Cash Flow Crisis

3 Free Tools to help you in this Cash Flow Crisis

Arun highlights three tools to download for free to help you in this cash flow crisis.

You can download them here.

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

Day 8 – How to deal with your bank in a cash flow crisis

How to deal with your bank in a cash flow crisis

In this webinar, Nigel and I discuss how to handle your banks in a cash flow crisis and what you need to be thinking.

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

Day 7a – How your team culture will get you through COVID – 19 – 23 March 2020

How your Team will get you through COVID – 19

I refer to “The Infinite Game” by Simon Sinek which is available on Amazon.

Remember, team loyalty goes both ways.

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

Day 7 – The wheels in a bank move very slowly – 23 March 2020

The wheels in a bank move slowly

In terms of the Coronavirus Business Interruption Loan (CBIL), we have spoken to our banking contacts and it seems whilst it is a great idea from the government, the reality of actually getting funds quickly are very slim.

Banks don’t have the back offices to cope with the requirements, and they struggle already with their existing work loads, so if you are thinking about getting such a loan, I would certainly not rely on receiving the funds any time soon.

Besides, a bank appointed valuer will need to go and visit the relevant business, but if practices are shut, and people are told to stay at home, the chance of a valuation happening any time soon are even slimmer.

Governments and banks move slowly, and when they don’t have sufficient staff in their organisation, it will take even longer!

Bank and Asset Finance Provider List

We have now managed to contact most of the lenders to the Dental market and detail each of their policies regarding payment holidays and loans in the attached spreadsheet. It’s quite self explanatory.

Thank you to Dan in my team who has been calling everyone he knows!

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

If you require short term finance in these challenging times we can help.

Day 6a – Why you need to get your Tax Return in ASAP after the 5th April – 22 March 2020

Why you need to get your Tax Return in ASAP after the 5th April

It’s quite likely your earnings for this financial year will be affected, which could have an impact on your annual earnings and taxes payable.

  • As we near the end of the tax year, get your income tax return in as soon as possible after 6 April 2020, for a potential refund of part of your January 2020 tax payment. Then know the exact amount due in July. According to Government announcements, the July payment will be deferred to January 2021
  • If you make a sole trader or partnership tax loss to 5 April 2020, you can generate a tax refund by carrying the loss back to 2019.
  • If you’re a start-up sole trader or partnership, this loss can be carried back three years to generate a tax refund from your previous PAYE job or even possibly from rental income, this can help with your cash flow considerably.
  • If you’re a limited company and make a loss in your current year end, carry it back by a year to generate a tax refund.
  • If you’re working from home more than usual, claim more costs against your taxable income for your home office.

Why get your tax return in so quickly?

  • The sooner you get tax returns sent in, the sooner you can benefit from the above.
  • Getting your return in early doesn’t bring forward any tax payment dates, but it does bring forward tax refunds.
  • This will also provide an increase in Time-to-pay arrangements from HMRC, where you phone HMRC to agree a delay in paying your tax.
  • Have a realistic proposal ready that you expect to adhere to.

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

Day 6 – Asset Finance – 22 March 2020

Asset Finance Providers

We have managed to contact many of the asset finance providers that fund equipment for dentists and many are offering payment holidays, if required.

We attach a spreadsheet detailing our current findings along with details of how to go about requesting a payment holiday from them

We will update this on a regular basis.

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

Day 4a – Facebook Live Recording – 20 March 2020

Facebook Live Recording

In this Facebook live recording Arun discusses his tips to manage your business in this economic crisis. – Approx 23 minutes in duration.

Arun’s Facebook Live Video with Business and Cashflow Tips

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

Day 4 – Rishi’s Financial Plan

Rishi’s Financial Plan

Today Rishi Sunak revealed a massive stimulus package to try and save jobs whilst UK businesses deal with COVID 19.

Key Points:

  • The state will give a grant of up to 80% of the salary of workers, up to a total of £2500 per employee for those retained and not working – Hopefully meaning you can still employ your staff, whilst closed, and not have to lay any one off
  • No limit on funding available, interest free loans for business up to 12 months rather than previously reported 6 months, available from Monday apparently! Let’s see how easy it will be to get this finance!
  • Deferment of next quarter’s VAT payment until the end of June
  • Deferment of the next income tax payment until January 2021
  • Universal credit allowance increases by £1000

As ever, the devil is always in the detail, more to follow, once more information is released from the treasury.

I am sure it will require some tenacity to actually get the grants and the loans, lots of forms, and phone calls. Once we know more, we will let you know.

Team Samera are here to help you

We are 100% here to support you in these trying times, if you need help get in touch.

Day 3a – Dealing with your Landlord

Dealing with your Landlord

I know many dental practices will be concerned about their rent payments due to their landlords.

Naturally, every landlord will differ, but I do think it is worth asking your landlord for some leniency in payments.

For instance, rather than paying a whole quarter in advance, ask if you can pay monthly just for this uncertain period. They may say yes, they may say no, but no harm in asking.

I attach a template of an email I sent to one of our landlord’s for one of our dental practices today, and it certainly did the trick!

Just change the amounts and names.

Give it a go – you have nothing to lose!

Day 3 – The Insurance Battle Begins – Keep a close record of lost income

The Insurance Battle Begins – Keep a close record of lost income

Will your insurers protect your business?

I am sure many of you have tried to speak to your insurers about a potential business interruption claim, especially if in the event of closure based on government guidelines.

I have discussed this at length with my insurance broker and the message I am getting, is it all depends!!

It depends on so many aspects

  • Will the government force closure of dental practices or not?
  • Will dental practices remain open?
  • Do you have business interruption insurance in the first place?
  • Does your policy cover pandemics?
  • Does it cover the coronavirus?
  • Will the government support insurers or will they force the insurers to pay out, even if you don’t have the relevant cover?
  • Which insurers will be more amenable to paying out – ie will they try to protect their brand by paying claims out?

There are so many unknowns here, and none of us know how long will this whole terrible episode last?

Definitely prepare for making a claim – But don’t hold your breath!

In my opinion, I would not hold my breath about receiving a claim, but if you do get paid, that will definitely be a bonus.

So, in essence, plan your cash flow strategy around NOT receiving a pay-out. Anything you receive will just be a bonus.

Besides, you will only be able to make a claim once this whole saga is over, as you will need to prove to the insurers the income you have lost, which is never a straightforward exercise.

However, you have nothing to lose, and I would advise most definitely submit a claim when the time is right.

Keep a close record of all your lost income

I appreciate this maybe the last thing you want to consider right now, but to make your life easier down the line for when you do make a claim, the insurers will want to see recent historic accounts and trading information for when you do submit a claim. 

The more information you have ready to submit down the line, will only expedite any potential pay-out from your insurers.

Such a claim (in a very simplified format) may look like this:

Projected Income    £x

Actual Income          £y

Lost income              £x-y

Assuming your costs remain the same it will be imperative to try and prove your lost income. 

Management information extracts and historic accounts will be key for this.

In summary, use this quiet time to get your paper work organised, and be prepared for another battle with your insurers.

Day 2a – Ask your lender for a Payment Holiday – 18 March 2020

Ask your lender for a Mortgage/Loan Repayment Holiday

A quick short video below on:

  1. Making sure you approach your lenders to receive a payment holiday – Cash flow is absolutely key now, if you are concerned about your cash position over the coming weeks and months call your lenders as early as possible and ask for a payment holiday.
  2. Details of the possible loans from the government are at the British Business Bank website – https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/ – More details to emerge over the coming days on the key criteria to get a loan.
Ask for Mortgage and Loan Payment Holidays during Covid – 19

Working Together

We are 100% here to support you in these trying times, if you need help get in touch.

Day 2 – The Chancellors War Chest – 18 March 2020

The Chancellor’s War Chest

Last night, Rishi Sunak, The Chancellor of the Exchequer announced his war chest to help the many businesses and individuals try and deal with COVID-19.

As with all these things, the devil is always in the detail, and whether it will positively or negatively impact your business will only be known once further information is provided.

The salient points are:

  • £330 billion loan scheme to support businesses – these will be cheap loans backed by the government to help those businesses that need the funds to survive over the next few months. This is being called the Coronavirus Business Interruption Loan scheme which will make available up to £5m per business with no interest payable for 6 months.
  • A cash grant of up to £10,000 will be made available per business. This will be administered by local authorities and should be available in the next week. He advised small businesses to directly approach their local authorities.
  • All leisure, retail and hospitality companies will be exempt from business rates for 12 months
  • The Treasury will work with business groups to develop an employment support package that will help mitigate employment costs for small firms.
  • The Treasury will support those businesses that do have Business Interruption Insurance policies that do include pandemics but will have excluded COVID-19 because it is such as new virus.

From the language used, it appears this may just be the beginning, and the Treasury will be making further announcements to help businesses.

As with many of these government initiatives you will need to look out for how to take advantage of any of the above. Once we know more we will be sharing the relevant links on our blog.

Watch this space!

Working Together

We are 100% here to support you in these trying times, if you need help get in touch.

Day 1 – Cash Flow Spreadsheet Template – 17 March 2020

Cash Flow Spreadsheet Template

I attach above a very simple cash flow statement tool which I urge you to use to help you manage your cash flow over the coming months.

There are some made up numbers in there currently. Clear them all out and enter your own figures.

If you are forced to close, you will still have overheads to pay – use this tool as a starting point to plan your cash needs.

How does the tool work

  1. The light pink cells require you to enter your monthly income and expenses each month. If you close for a period of time, you may have ZERO income in those months BUT still have the expenses.
  2. Cell B34 (green colour) details your approximate current bank balance in your business.
  3. Once you have entered these key figures you will then see in row 34, your cash bank balance based on your forecast scenarios at differing time points.
  4. You may also need to take into account tax payments too, the spreadsheet can be adjusted by you for your needs.
  5. The tool will then say in row 34 your funding shortfall, if you have one, and the approximate cash you will need to raise.

Personally, I suggest you plan for the worse case scenario and work out the cash you actually require to keep your business ready for when things do turnaround – as they will at some point.

If using spreadsheets is not your strong point, let us know, we can help you, but we are dealing with these on a first come first served basis.

What Next?

Once you have worked out how much cash you think you will need to survive this unexpected downturn – either by using personal funds, or raising further funds from lenders.

If you need some short term finance, first ask your existing bank, if they cannot assist promptly, get in touch, Nigel or Dan our financing experts who may be able to assist.

Nigel Crossman

Nigel Crossman

07715 668267

Dan Fearon

Dan Fearon

07718 655245

Working Together

We are 100% here to support you in these trying times, if you need help get in touch.

About arun

Arun Mehra FCA is a world leading expert on Dental Business and CEO of Samera. He has extensive expertise on financing, deal structuring and tax issues arising in Dental Businesses.

Outside of Dentistry, you can probably find him with a backpack travelling around the world.