Business Survival Guide

Overview 📘

This guide explains how to strengthen your company’s financial resilience by managing cash flow, optimising costs, and maintaining clear communication with employees, customers, and suppliers - we call it moving into Defence mode.


Although originally written during the pandemic, the principles below remain highly relevant to any period of financial uncertainty or disruption.

💰 Cash Flow

Cash flow is the lifeblood of your business. During challenging periods, focus on bringing money in faster, reducing unnecessary outgoings, and maintaining open communication with creditors.

1. Invoice promptly

Send invoices immediately for all completed work and any work in progress. Delays in invoicing can directly affect cash reserves.

2. Negotiate with HMRC

If you expect difficulties meeting payment deadlines for VAT, PAYE, Corporation Tax or Self Assessment, contact HMRC’s Business Payment Support Service:

🔗 https://www.gov.uk/find-hmrc-contacts/payment-problems-enquiries

HMRC can often agree to payment plans or short-term deferrals.

3. Contact your local authority

If you occupy business premises, you may be entitled to business rates relief or more flexible payment terms.

4. Talk to lenders and credit providers

Discuss options for:

  • Lower interest rates
  • Temporary payment holidays
  • Short-term interest-only periods

5. Review and reduce non-essential expenditure

Reassess what your business truly needs. Areas to consider cutting back include:

  • Advertising or sponsorships that don’t generate direct results
  • Hired equipment or vehicles not essential to operations
  • Outsourced services (e.g. virtual assistants) that can be handled internally
  • Paid subscriptions that duplicate free alternatives (e.g. HR or legal helplines available through trade bodies or insurers)

6. Review insurance policies

Check that your cover reflects your current working patterns. You may be able to pause or reduce certain policies (e.g. breakdown cover if you're home-based).

7. Check prepayments and retainers

If you’ve paid in advance for services like fuel cards, retainers, or minimum order quantities, ensure these still match your requirements and renegotiate where possible.

8. Reassess financial benchmarks

  • Calculate your breakeven point - where income equals costs - and track cash flow daily.
  • Estimate how long your reserves will last if income drops to a minimum.
  • Consider upfront payments or deposits from clients to improve cash flow and reduce credit exposure.

👥 Team and Operations

Your team will look to you for leadership during uncertain times. Open communication and clear guidance are essential.

1. Communicate regularly

Keep employees informed about the company’s position and plans. Reassure where possible and remain transparent.

2. Understand employment law obligations

If redundancies or reduced hours become necessary, ensure you follow correct procedures and understand your responsibilities regarding statutory pay and notice periods.

3. Use staff time effectively

Encourage employees to take on in-house tasks where possible, such as deliveries, maintenance, or internal process improvements, to reduce external costs.

4. Access available support

Review current government support or funding programmes available through the 🔗 British Business Bank and 🔗 GOV.UK business finance support page.

📈 Strategy and Resilience

When external conditions change, flexibility and focus are critical. Adapt your operations to safeguard profitability and long-term sustainability.

1. Monitor competitors and market trends

Review pricing, customer behaviour, and industry developments to stay competitive.

2. Simplify and streamline

Reduce product or service lines that add complexity or low returns. Focus on core strengths that drive the most value.

3. Build in cost efficiencies

Explore ways to reduce production or delivery costs without compromising quality.

4. Reassess your customer base

Review credit risk and payment reliability. Adjust terms or require deposits where necessary.

5. Collaborate strategically

Consider partnerships or joint ventures with complementary businesses to share resources and strengthen market position.

6. Manage surplus capacity

If you own underused space or equipment, consider renting it out to generate additional income.

7. Maintain communication with customers and suppliers

Be proactive—update clients on service changes, reassure them, and respond quickly to concerns.

8. Offer value, not losses

If you wish to support clients in difficulty, offer targeted discounts or flexible payment terms—but avoid selling at a loss.

9. Plan for the worst, hope for the best

If cash flow forecasts indicate insolvency risks, seek early advice from a licensed insolvency practitioner. A Company Voluntary Arrangement (CVA) or Individual Voluntary Arrangement (IVA) may provide breathing room, though both have serious implications.


The guide was originally written during the pandemic (April 2020), but many points remain relevant today. 

Move your business into defence mode by taking the following actions:

Cash flow

  • Send invoices for all completed work and work in progress immediately.
  • Contact HMRC on 0800 0159 559 to negotiate extended payment terms for VAT, PAYE, Corporation Tax and Self-Assessment Income tax.
  • Contact your local authority to claim exemption from business rates or negotiate payment terms if non-exempt.
  • Contact credit card companies and other loan providers to negotiate:
    • Interest rates 
    • Payment holidays or reduced payments without penalty
  • Consider scaling back on non-essential expenditure such as:
    • Advertising and sponsorship
    • Non-essential equipment or vehicles on hire
    • Outsourced services such as virtual PA, which you can provide yourself
    • Services that can be obtained for free elsewhere e.g. HR or legal helplines can be replaced by a good internet search or may be available through an existing trade body membership or insurer
    • Review insurance cover and reduce non-essential elements e.g. breakdown cover if you are working from home
    • If you have pre-paid fuel cards, legal services retainers, consultant retainers or suppliers with minimum order quantities ensure that these are still in-line with your requirements and negotiate reductions as necessary
  • Calculate your revised breakeven point (i.e. the point at which your revenue covers your costs) and monitor daily cashflow against this benchmark.
  • Calculate how long your reserves will last if you income falls to a minimum.
  • Consider asking for up-front payment or payments on account to improve cashflow and reduce credit risk.

Team

  • If you have employees communicate and reassure them as far as possible. Take advantage of all the financial support available from the government. Understand your obligations on sick pay and, if you need to make redundancies, understand the statutory requirements.
  • Use staff time wisely and become self-sufficient by insourcing as much as possible to reduce cost e.g. deliveries, cleaning and maintenance.

Strategic

  • Monitor competitors and ensure your prices are still comparable.
  • Engineer cost savings into the products and services that you provide to reduce prices.
  • Reduce the range of products and services to minimise complexity and save time and cost.
  • Review customer base and reassess credit risk and individual requirements.
  • Focus on what you are good at and consider collaborations with other businesses to take advantage of synergies.
  • Be realistic about pricing and, if you can afford to offer targeted discounts to help customers in need do so, but not at a loss.
  • If you have surplus capacity that you cannot cancel e.g. owned yard/warehouse space or equipment, offer it for hire to other businesses that may be struggling to pay for what they are currently using.
  • Contact suppliers to secure deliveries and search for alternatives if necessary. Some suppliers may not survive or may be struggling to meet changes in demand.
  • Make sure you respond to customers concerns, communicate with them and reassure. Remember we are all in the same boat.
  • Offer free support to your customers e.g. factsheets, FAQs, links to government websites - you are welcome to point them to our Help Scout guides too. 
  • If you fail to negotiate affordable payments with lenders and you forecast that you have insufficient income and reserves to cover unavoidable expenditure over the coming months, contact a licensed insolvency practitioner to discuss a CVA or IVA. This will have very serious consequences for the business and will not be appropriate in every case, but it can buy time to pay creditors.
  • Review support available from the British Business Bank https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/
  • Review support available from the government https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

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