Coronavirus crisis will break some businesses. But may be making of others

Many business owners and CEOs, as well as many leaders of organisations outside of the business world, know that periods of rapid growth have a way of bringing teams together. Read more: Coronavirus crisis will break some businesses. But may be making of others

Coronavirus crisis will break some businesses. But may be making of others

Many business owners and CEOs, as well as many leaders of organisations outside of the business world, know that periods of rapid growth have a way of bringing teams together.

Jon Goulding explains that when you’re flying high and signing new clients left and right, you can’t work hard enough, you can’t hire fast enough, you just can’t get things done fast enough. You’re facing up to a challenge—albeit in a positive context. You’re struggling, but you’re all struggling together. You all know what has to be done and you know there’s no room for delay. You all have a clear goal or purpose and you all know what that is.

Now, we’re all facing a different kind of challenge. The aim is not to grow without over-reaching, over-stretching or over-exposing yourself during a period of rapid development, but to survive in unprecedented and uncertain circumstances. Everywhere you look, businesses are bleeding revenue, clients or customers, furloughing staff and holding on tight in turbulent times. And there’s obviously a high risk of a fall in morale as a result. But this adversity can actually bond a team together like nothing else. Times of intense hardship create unity because there is often a very clear, instinctive goal and everyone knows what has to be done.

There is an irony to this. Towards the end of last year, it became clear that the preoccupation with ‘brand or company purpose’ had been the undoing of a lot of businesses. Rather than focus on their real purpose—in most cases, to provide a service or goods to help their customers solve a problem, which should be more than enough for any company to rally behind—brands had contrived seemingly higher and more noble reasons-to-be, giving rise to the phrase ‘woke-washing’. Some huge companies, such as Pepsi, were roundly condemned for appearing to take advantage of social trends as a PR exercise. And so by the start of this year the word had become toxic. No one was talking about ‘purpose’ anymore and was getting back to basics.

Now, all businesses and brands very much do have a purpose, and a clearly defined one. And though it isn’t so much an outward-facing purpose—this isn’t so much about your customers’ perspectives of your brand purpose as what you and your team see as your purpose internally—the point remains that what had become an almost meaningless buzzword has now become an undeniable reality of business life.

The purpose of businesses now is to survive and help every one of their customers through this incredibly difficult time—arguably it’s the most fundamental purpose any person, let alone any business, can have. And just as those brands who contrived purposes did so partly because they knew how it could bind a team together, the purpose that has been forced upon all businesses during the coronavirus crisis is bringing teams together, too. The language of war has been invoked often enough during this period, but here, wartime gives us an apt analogy. The horror of war has a unifying effect, not just within the armed forces but in entire societies.

There is a caveat to this. Without the right communication within teams, which is often down to the quality of the leadership, the adversity businesses are facing can simply become overwhelming. If negativity is expressed by or reflected in the senior leadership and is allowed to flow into the wider team, then the purpose that has the potential to bind that team will seem irrelevant because it will seem unattainable. Lethargy will creep in, and the team will perpetuate the negativity and so on. And then, at a time like this, it’s game over.

My suspicion, however, is that though this period will break many businesses, it will make some, too. And even within the businesses that don’t survive, the people will want to work with each other again. They will understand how it feels to work relentlessly for the people around them, their customers and not just for themselves. And within the business community, people will look back on this period and see it as a hinge moment in their professional evolution.

We should never ignore or forget the cold reality of what’s going on at this time—that there are people struggling and dying because of this virus. But regardless, we can acknowledge the potential for positive outcomes. We might just find when all this is over, that there is a unity in teams and among people, and that may even spread throughout wider society.

Read more:
Coronavirus crisis will break some businesses. But may be making of others

Source : Business Matters More   

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Over small businesses 100,000 apply for ‘bounce back’ loans within hours

More than 110,000 small businesses applied for low-cost finance on the first day of the UK’s “bounce back” loan scheme, underlining the demand for credit to survive the coronavirus lockdown. Read more: Over small businesses 100,000 apply for ‘bounce back’ loans within hours

Over small businesses 100,000 apply for ‘bounce back’ loans within hours

More than 110,000 small businesses applied for low-cost finance on the first day of the UK’s “bounce back” loan scheme, underlining the demand for credit to survive the coronavirus lockdown.

Banks providing the loans said they had approved the vast majority of applications and said the money would arrive in bank accounts as early as Tuesday. Software systems held up despite some banks receiving an application every two seconds.

The scheme is aimed at SMEs whose income has fallen because of the lockdown. They have been reluctant to use the main government support programme, the coronavirus business interruption loan scheme (CBILS), because it is more expensive and the application process has been criticised as slow and cumbersome.

The BBL scheme offers loans of between £2,000 and £50,000. They carry interest of just 2.5 per cent and applicants fill out only a short online application form. Companies of any size can borrow up to 25 per cent of their annual turnover. The government will cover interest and fees for the first year, after which repayment begins. Should businesses default, the taxpayer would foot the bill.

With banks reporting an average loan of around £30,000, the total handed out is expected to reach £3.3bn on the first day of the scheme. That is almost as much as CBILS handed out in its first five weeks — it had disbursed £4.1bn by April 28, the latest figure available.

Jonathan Ratcliffe of Offices.co.uk, an online property business, applied to Santander for a BBL on Monday and said the process was “very simple”.

“The only research I needed to do was work out our turnover in the last financial year — and input around five pieces of information, such as company number, address, turnover, bank account details and of course how much we needed to borrow,” he said.

Anne Boden, chief executive of Starling Bank, told the Commons Treasury select committee on Monday that bank IT systems were already “coming under strain” because of the number of applications. “I think this scheme is going to be very, very popular,” she said.

She added that the scheme was smoother than CBILS, which was based on the government’s existing Enterprise Finance Guarantee — a state programme designed to increase lending to SMEs after the financial crisis. “That old scheme was intended to take one loan at a time and somebody sit at laptop or screen and key all the details in . . . if we have to do so many loans so quickly that doesn’t work.”

David Oldfield, chief executive of commercial banking for Lloyds Banking Group, told committee members that banks could approve BBLs for existing customers quickly. “Unlike CBILS, the obligation is not on the bank to undertake viability and affordability testing,” he said.

RBS, the biggest SME lender by volume, said it received 30,000 applications on Monday. By 4pm Santander said it had almost 18,000 applications and had paid out to over 200; by 5pm Lloyds had had 26,500 applications.

HSBC said had received 19,800 applications from existing customers asking for £650m. It also had 14,700 requests for loans from new customers. Of the 10 lenders using the scheme, only HSBC is offering loans to non-customers, but they will first have to undergo money laundering and other checks.

Barclays bank said that by 2pm on Monday, it had approved 6,000 BBLs with a value of £200m.

Mike Cherry, national chairman of the Federation of Small Businesses, said: “Day one feedback on the bounce back loan scheme has been mixed. Some have submitted their short application forms with no trouble at all, others have been told to wait for forms to arrive, and some have struggled to make an application due to site failures.” He urged more lenders to join the scheme urgently.

The Prudential Regulation Authority, the financial regulator, told banks they could adjust their credit risk assessments and exclude BBLs from leverage calculations, since the government was offering a 100 per cent guarantee.

Read more:
Over small businesses 100,000 apply for ‘bounce back’ loans within hours

Source : Business Matters More   

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