SMEs should act now on leases, not wait until the end of the year, says ReSolve
ReSolve, the boutique business advisory and restructuring house, says that owners of small and medium-sized enterprises should act now to decide whether their premises are still fit for purpose and not wait until the end of the year, even if eviction bans are extended.
ReSolve was responding to reports that the Government may extend the ban on evictions of commercial property tenants until the end of the year in an attempt to support companies struggling with decreased trading and footfall as a result of the Covid-19 pandemic and lockdowns.
Earlier this year ReSolve helped TM Lewin transition to an online only business and successfully negotiated the sale of Great British Chefs Ltd, another online only business. ReSolve has also successfully restructured a number of bars and restaurants to enable them to stay trading.
Cameron Gunn, Co-Founder and Senior Partner, believes that SME owners should take difficult decisions upfront about the future of their business as soon as possible, even if that means reducing the number of physical stores and focussing primarily on online and direct delivery.
Gunn says: “Whilst the prospect of an extended ban on evictions may seem like a lifesaver, it might merely be a stay of execution. Keeping your business in premises which no longer serve your business model is just kicking the can down the road.
“All the signs suggest that the Covid-19 pandemic has changed consumer behaviour for the long term. We will now see a permanent increase in online shopping, restaurant-to-home delivery and probably also a rebalancing away from city centres towards local community businesses.
“That means that business models may have to change, and business owners should act now. Take a cold hard look at your numbers, speak to your suppliers, and take advice from an independent third party to decide if you need to reduce your physical presence, move it or use it in a different way. Don’t wait until the end of the year to take action, when you will face a greater accrual of rent. This year ReSolve has successfully helped a number of stressed businesses to continue trading, and we always tell our clients that the sooner you face the facts, the more options you will have.”