The RfM Group is a multi-faceted accountancy firm headquartered in Lancashire, which specialises in providing accountancy, audit and tax planning and advisory services for a wide range of clients in many different sectors. In conversation with the Leaders Council of Great Britain & Northern Ireland, managing director Paul Newsham discusses how RfM is helping its clients navigate their way through the Covid-19 crisis.
The phrase ‘unprecedented times’ is often used to describe the ongoing situation. For Newsham, as tiresome as that phrase might be, it is very much the reality.
He said: "Society is currently going through a phase that nobody was prepared for and a situation such as this does not come with a ready-made text-book providing all of the answers!"
However, Newsham does not underestimate the scale of trust business owners have placed in RfM to help ensure that their businesses still exist once the crisis is ‘over’.
“From providing clarity on the government’s support measures and help with loan applications to strategic advice on how to adapt to trading with social distancing, we feel privileged to be in a position to make a difference.
“Our brand ethos of + more has never been as apparent in the actions of our staff as it is right now. Despite their own challenges of a heavier workload and adjusting to working remotely, they have all shown an admirable commitment to doing whatever they can to help clients.
“Following each announcement of support measures from the government, our staff have had to quickly get to grips with the ins and out of new initiatives so that we can deliver them effectively and at pace.
“Like our clients, we too have had to make difficult decisions. The impact of social distancing is so far-reaching that every type of business has been affected in some way. We care about every one of our clients but have had to prioritise based on urgency and greatest need.”
However, attempting to access support loans and grants has not come without its barriers for some businesses applying via high street banks and other lenders. Following revisions to government schemes, money is now beginning to reach firms that meet certain criteria, and RfM has been at the forefront of helping clients compile the evidence that they need to qualify.
Elaborating on this, Newsham said: “We have been assisting our clients in providing numerous pieces of information that are required for them to access government support. This includes the most up-to-date accounts information, which shows that prior to the crisis, the business was viable.
“Firms must also provide projections for the next 12 months to access government support, since this allows for an accurate picture of how much funding is required and where that money will be invested. Evidence that the loan is serviceable is also important.”
RfM’s work in this regard has also yielded positive client outcomes, as Newsham explained.
“We work with a hospitality services group which, thanks to our assistance, has been able to secure a support loan worth £220,000 via a high street bank. This funding will enable them to pay overheads and costs and ensure that they can resume business once permitted to do so. RfM’s role in this case centred around preparing the required financial projections and we facilitated the arrangement through our long-established relationships with the bank. The client has also furloughed their staff under the government’s Job Retention Scheme.”
The positive outcomes do not end there. Thanks to RfM’s relationships with banks and lenders, the application process and eventual access to funding has been significantly accelerated for other businesses. A hygiene equipment distributor has successfully secured a loan of £100,000 to provide working capital and cover fixed costs thanks to RfM’s help and has subsequently furloughed its employees.
Elsewhere, a financial and professional services business has been able to secure over £200,000 in funding to ensure it can pay its staff and continue delivering services.
Yet, despite all the headway that RfM is able to make in assisting clients, Newsham stressed that individual businesses must adopt a proactive approach and actively seek out support, rather than mulling over a number of options.
Newsham said: “Unfortunately, not every business story will be one of success and, as a fellow small business, we empathise with those businesses that are unable to pull through.
“Although some will fail through no fault of their own, we advocate taking a proactive approach to improve outcomes. Do not spend too long thinking about whether to seek support or make operational changes – now is the time to take action.”
Newsham explained that RfM had identified three defined stages in how businesses respond to the impact.
“Concerning these three stages, some businesses seem to get stuck in the first, which is panic mode, but notably, those business leaders who quickly move on to the third phase often get the most positive outcomes.”
Outlining the three response stages he refers to, Newsham said: “First and foremost, some business leaders are getting sucked in by panic and inertia, which is only natural to begin with. That is to say, overwhelmed by question such as ‘what if my clients are unable to pay me?’ or ‘what if my supply chain is disrupted?’ or perhaps even ‘what if my clients decide to stop buying from me?’.
“The enormity of the situation can affect directors and they may only see negative outcomes. The key thing to remember here is that typical business models will not work under the current rules and businesses cannot survive without an income. Now is the time to act and seek out support."
The second phase that Newsham described is the point where business leaders take stock of the impact of the crisis thus far, and he stressed that this is the time for plans to be made.
“Secondly, I would recommend that industry leaders take a step back and appraise whether the business is through the worst of what has happened. At this point, one should take stock of what the impact has been and where help is available. Ask for advice, make a plan, then enact that plan and take action.
“The key third aspect is for business leaders to take advantage of whatever help and support is available. Businesses will have to adapt their models to keep generating income, explore new routes to market, spot opportunities, speed up NPD to bring products to market.
“Those who are set in their ways will only suffer. It is vital to look further into the future and refine or develop new products and processes while trading is effectively ‘paused’. In many ways, this is simply taking the opportunity to ‘work on’ the business that one is already working in.”
Newsham took the opportunity to discuss the issues outlined in this article in the ongoing Leaders Council of Great Britain & Northern Ireland podcast series. During the episode, Newsham expands on his personal experiences of the crisis and where government support is falling short. Readers may listen to the podcast here.