Podcast Summary
The Value of LinkedIn for Hiring and Financial Struggles of Small Business Owners: LinkedIn is crucial for finding potential candidates, especially those not actively seeking new jobs. Small business owners, like those in the events industry, are facing financial hardships and need government support.
LinkedIn is a valuable resource for hiring professionals, as over 70% of its users don't visit other leading job sites. This means missing out on potential candidates like Sandra, who might not be actively looking for a new job but could be open to the perfect role. On the other hand, the economic impact of the coronavirus has left many small business owners in a desperate financial situation, with no income for nearly a year and no government support in sight. For instance, Lowry, who runs a small events business, is struggling to keep going as the live music industry has been shut down with no start date. These two examples highlight the importance of utilizing LinkedIn for hiring and the urgent need for financial support for small business owners during these challenging times.
Personal and business struggles can lead to overwhelming debt and potential asset loss: During economic uncertainty, personal guarantees and lack of government support can exacerbate financial hardships, but perseverance and seeking professional help can lead to starting anew
Personal and business financial struggles can lead to overwhelming debt and potential loss of assets, even for those who have built a business from the ground up. Lowri's story illustrates the harsh reality of insolvency and the pressure creditors can put on individuals, leaving them vulnerable to losing their homes and other assets. Personal guarantees, which are common in business loans, can add an extra layer of risk for business owners. Furthermore, during times of economic uncertainty, such as a pandemic, the lack of government support for certain business structures can exacerbate financial hardships. Lowri's resilience and determination to start anew despite these challenges serve as a reminder of the importance of perseverance and seeking professional help when needed.
Government support leaves small business owners in a precarious financial situation: Government measures primarily aid employees and self-employed, leaving small business owners struggling. Without further support, companies may fail to pay invoices, taxes, or employees, potentially impacting livelihoods of hundreds of thousands.
The current government support measures, such as grants and loans, primarily cater to employees and the self-employed, leaving directors of small limited companies in a precarious financial situation. This issue was highlighted by Lowry, a struggling business owner and single parent, who shared her personal experience of relying on welfare payments and food banks. Lowry's story underscores the mental and emotional toll that financial hardship can have on individuals, as well as the potential ripple effects on other businesses and the economy at large. Rebecca Seeley Harris, a lawyer and former senior government adviser, echoed these concerns, stating that many small business owners are currently facing significant financial difficulties. If the government and treasury fail to provide further support to this group, the consequences could be dire. Companies may be unable to pay their invoices, taxes, or even their employees, leading to a domino effect of financial instability. Furthermore, these small businesses employ a significant number of people, potentially impacting the livelihoods of hundreds of thousands. Therefore, it is crucial that the government and relevant organizations provide clear guidance and resources for small business owners who are struggling to keep their companies afloat during these challenging times. By doing so, they can help prevent a wave of business failures and the associated economic and social consequences.
Proposed grants for excluded individuals: 262 MPs support grants for excluded individuals, but the Treasury is considering the proposal with concerns about fraudulent claims and creating a workable scheme. Excluded individuals should explore all available resources to stay afloat during the crisis.
During the lockdown, many businesses and self-employed individuals have been excluded from government support, leading to financial hardship and potential business failure. Rebecca, with experience in government policy, has proposed grants of up to £1,000 for excluded individuals, which has gained cross-party support from 262 MPs. The Treasury is considering the proposal, but concerns about fraudulent claims and drawing up a workable scheme have slowed down the process. The reality of the situation, as MPs have heard from their constituents, is that lack of support can lead to dire consequences for both individuals and businesses, affecting mental health and overall economic recovery. It's crucial for excluded businesses to explore all available resources, such as local council grants, online campaign groups, and professional advice from accountants, solicitors, or insolvency practitioners. The situation is dire, with potentially tens of thousands of small businesses, particularly in the retail sector, teetering on the brink due to debts accumulated during the COVID-19 crisis.
Financial Struggles of Small Businesses Amidst Pandemic: Small businesses face financial strain due to pandemic, insolvency specialists can help, be transparent and choose reputable experts, understand personal guarantees implications
The financial impact of the pandemic on small businesses is far-reaching, with many industries facing reduced hours or closures, leaving businesses with limited resources and financial strain. This situation is expected to worsen as the furlough scheme ends and loans need to be repaid. Businesses should seek help from insolvency specialists when they feel they have exhausted all resources and don't know which way to turn. Insolvency practitioners act as a neutral third party, helping to mediate between parties and providing a shield for directors during a difficult time. However, it's important to choose a reputable insolvency expert and be transparent about the business's financial situation. Another issue that arises is personal guarantees, which can put business owners at risk of personal liability for business debts. It's crucial to understand the implications of personal guarantees and seek professional advice if necessary. Overall, the pandemic has highlighted the importance of financial resilience and the need for businesses to be proactive in seeking help when faced with financial difficulties.
Understanding Personal Guarantees and Their Risks: Personal guarantees can lead to asset loss, but seeking professional help early on increases chances of viable solutions. Don't overlook emotional impact of business failure, act promptly to find alternative income sources.
Personal guarantees, which are common among SMEs and often required by banks, can put business owners at risk of losing their homes if their business faces financial difficulties. It's crucial to fully understand the implications of signing a personal guarantee and involve professionals like insolvency practitioners and solicitors if needed. Despite the potential loss of assets, there may still be options to repair relationships with creditors and avoid bankruptcy. As Peter Sargent, an insolvency expert, noted, seeking help early on can increase the chances of finding viable solutions. The emotional impact of losing a business can be significant, as it often represents a person's identity, income, and long-term investment. The ongoing struggle to find alternative sources of income and employment in today's economic climate only adds to the fear and uncertainty. The experts' insights offer valuable perspectives on navigating debt problems and emphasize the importance of taking action as soon as possible.
Seeking advice from trusted professionals during financially challenging times: Communicate openly with trusted individuals and seek advice from professionals to navigate financial hardships and find solutions.
During financially challenging times for small business owners, it's crucial to seek advice from trusted professionals like insolvency practitioners. This advice can provide valuable perspective and help business owners make informed decisions about their next steps. Open communication with trusted individuals and seeking support from various resources, such as business deadlines and support groups, can also be beneficial. Lowrie, a business owner who shared her experiences on the Money Clinic podcast, emphasized the importance of talking to people and not hiding during difficult times. By sharing stories and seeking advice, small business owners can navigate financial hardships and find solutions together.
