Thank you to everyone who took part in our enterprise survey which gave some interesting, if not unexpected results.
Of the total survey participants, 63% have been adversely affected by coronavirus. However, when we look into the detail, there is a significant deviation in the percentage when you look at the type of business. Only 45% of pure farming businesses say they have been adversely affected, whereas the figure for non-farming or diversified farming businesses is 90%. A separate recent survey of all Gloucestershire businesses recorded a similar figure with 90% of businesses being affected. This confirms our thoughts that on the whole, farming has not been as severely affected by coronavirus as most other businesses. Having said that, the glorious, dry weather we have all enjoyed since the start of lockdown will have most farmers now praying for rain!
For those businesses which have been adversely affected, 33% indicted that they have not claimed or are not eligible to claim any of the Government backed support made available. This rises to 40% for pure farming businesses. Of the businesses who indicated they have not been adversely affected, over 70% have accessed some form of Government support, mainly the coronavirus job retention scheme. Therefore, it is likely that without the Government’s intervention, more businesses would have suffered and potentially the redundancy levels would already be high. As the support levels under CJRS start to reduce we could see the unemployment rate rise significantly.
To date there is little detail on how the dairy farmers grant will operate, from our survey 50% of our dairy farmers have seen a downturn in business. Dairy farmers on supermarket contracts continue to receive a good price for their product whereas others have seen a vast reduction in the price per litre they receive.
The majority of the survey participants are not looking to borrow additional funds with only 17% applying for the various loans made available. However, over 70% have taken advantage of the deferral of VAT, self-assessment tax or time to pay arrangements to aid their cash flow. Not all businesses which have taken advantage of the tax deferral payments to help cash flow have prepared cash flow projections, therefore there is a possibility that when the deferred payments fall due in January or March 2021 they may find they do not have the cash to pay.
The results show 75% of all businesses and 100% of pure farming businesses feel it is too early to plan for any business change.
A summary of the survey results is set out in the table below.
If you think you or your business could benefit from a review by one of our experts or if you require some assistance with cash flow or forward planning please get in touch.