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The cost of social distancing in your business

It has now been almost nine weeks since many businesses were forced to close as the UK implemented a lockdown to control the spread of COVID-19. During this time, many companies have had to undergo obstacles to keep themselves afloat. Still, the light is finally appearing at the end of the tunnel, with Boris Johnson announcing the gradual easing of lockdown earlier this month.

Some businesses, such as restaurants, construction, and real estate, have already begun to return to work, while many more are now taking steps to do so in the coming weeks. While many companies will be welcoming the return to normal life and regular business, this new sense of ‘normal’ comes with a caveat: social distancing measures.

Even though your business can restart operations, it can only do so if appropriate measures are put in place to allow staff and customers to be distanced from each other and be able to visit your business safely in line with government guidelines.

These measures are essential to continue to control the spread of COVID-19, but they do come at a cost to your business. We have created this guide to help you understand what measures you may need to put in place in your business, their financial impact, and what you can do to fund them.

The measures your business may need to implement

Social distancing is, as the name suggests, about create distance between each person in your business. This means you have to implement measures that allow staff and customers alike to maintain at least 2 metres of reach at all times.

If your business involves customer visiting, such as running a store or restaurant, you may wish to create borders across the floor to give visitors a visual representation of where they can stand while maintaining the correct distance. You may also want to utilise screens around tills and other areas to create space between workers and customers while still allowing standard operations to continue. Additional measures may include only letting in so many customers at one time and having an appointed staff member on the door to enforce this.

If your business is a restaurant or café, current guidelines state you cannot currently allow customers to sit in. This means you need to either utilise takeaway or delivery options – potentially meaning you need to hire additional staff to fulfil this – or create outside spaces where customers may be able to sit (while maintaining distance). Again, this might require investment to set up such areas with appropriate seating.

Social distancing will also be required in any workplace, meaning you will need to make sure your staff can do their job without coming within 2 metres of each other – whether it is on the factory floor or in the break room. Borders and screens may again help achieve this, as well as re-arranging workspaces and stations so that staff can work comfortably. Where this is not possible, you may have to consider staff working back to back and other novel ways. You will need to make sure that staff have the equipment they need to be able to stay safe, such as PPE.

Finally, in any business, cleaning will take on new precedence. You should implement regular and thorough cleaning of every area of your workplace, including all surfaces and equipment. Moreover, you should ensure your employees are undertaking the right hygiene practices as part of their work to protect both their health and keep your products safe. Staff should also schedule regular breaks at wash their hands, and you should provide hand sanitizer and other cleaning equipment for them to access easily. This will equally apply to customers visiting premises.

How to fund these measures

There are many measures businesses need to consider to make their spaces as safe as possible during the COVID-19 outbreak. However, these measures will require investment to set up: while some, such as taping floors to create 2-meter guidelines, may require a relatively small amount, others like creating outside spaces and increased cleaning equipment and regimes may need more funding.

One way to fund this may be the government-backed Coronavirus Business Interruption Loan Scheme, which aims to provide businesses the finances to overcome the consequences of COVID-19. Similarly, the Bounce Back Loan Scheme can give small companies financial support during this time. These loans offer a lower interest rate, so businesses can use them to inject funds into their operations without having to worry about overly high repayments. Bounce Back loans are capped at £50,000 and a maximum of 25% of your turnover, whichever is the lower. This money can then be used to pay for new social distancing measures.

If it is equipment that your business needs to implement social distancing, it is worth considering leasing and hire purchase. With this type of finance, you can get the equipment you need while spreading the cost across regular instalments.

Implications of social distancing measures

Asides from the upfront cost of placing social distancing measurements into your business, there are further implications of what this may mean for your operations. Part of social distancing means fewer people being able to fill one space. This means that many businesses may have to rotate staff, operate staggered start times or offer flexible working, so that fewer people are in the workplace at any one time. This may result in reduced productivity across your operations, with fewer people working to fulfil standard targets.

It isn’t just your productivity that may be affected by social distancing – it could be the productivity across your whole supply chain. This means that you may face delays in getting the materials you need for your operations.

As a result, businesses may suffer from reduced output, longer timescales and limited ability to fulfil orders, which will impact both profits and overheads. This means that, even when returning to work, companies may suffer from financial obstacles and reduced cash flow that need to be addressed.

Keeping cash flowing during reduced output

Luckily, there are funding solutions businesses can utilise to aid their cash flow even during these times of reduced profit and productivity.

One option for businesses is trade finance. If you import, this can cover the funding gap between any orders placed by customers in the UK and payment required by your overseas suppliers by funding the supplies you need. This means you can fulfil any orders your business receives without having to invest more upfront, which could be a handy solution if you are struggling to meet your regular demand for orders.

Another way businesses can improve cash flow is invoice finance. With invoice finance, you can release funds owed to your company through unpaid invoices. This could be particularly helpful if your clients are taking longer to pay you in the current climate – though it is essential to make sure they will be able to pay you in time for the loan repayment.

Leaseback may be another possible solution for cash flow problems in your business. If your company owns equipment that has substantial equity, you can sell this to a lender and then lease it back through a regular repayment schedule. This means you can retain the equipment you need for your operations whilst freeing up capital to invest elsewhere in your business.

For more information on how your business can overcome cash flow businesses, read our Cash Flow Issues blog.

Guidance on how your business can prepare for post-lockdown

Social distancing is rightfully a must for businesses to adhere to in the current climate, but it does require investment to be done right and will mostly see operations affected over the coming months. However, with little known currently as to how long social distancing may remain in place, it is the best interest of companies to prepare their workplaces and staff now for the future of this ‘new normal’ with the right financial support in place.

If you need tailored advice as to how your business can seek funding solutions to implement the required social distancing measures and keep cash flowing even during reduced output, our team of experts can help.

Please call the team today for a free consultation or email [email protected].

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