Impacts of COVID 19
As we are all well aware by now, 7 months in, COVID 19 has had a profound impact on the whole planet. This has resulted in a whole host of negative impacts on individuals, businesses and the world economy as a whole.
Regardless of any individual opinions of how dangerous COVID actually is or how the governments of the world have dealt with it, we all have to live with it.
How Has COVID Affected Premier Disco?
Just like every other business, Premier Disco is suffering badly from the political response to COVID.
Our last event was at the end of March 2020, today being 15th October 2020. The various lockdowns, restrictions and general negativity created means we will not be trading for some considerable time to come. Most workplaces managed to get a return to business around July and August but the nightlife sector has been ignored and left in limbo.
We have lost ALL of our wedding season , and Christmas has been officially cancelled, for us at least. These are the two periods of the year where we generate turnover to see us through the rest of the year.
A typical year goes a bit like this.
- January to April – VERY quiet time with a VERY limited turnover, up to 10% of annual turnover
- May to September – VERY busy period of weddings and corporate events responsible for 60% of our annual turnover
- October to November – Very limited work available, typically charity events like race nights and Charity Fun Nights. This period is responsible for maybe 15% of our annual turnover.
- December – Busy time with Christmas Party Nights for venues, private organisations and family events. This period is responsible for about 15% of our turnover.
For most, in general, the government help has been fairly substantial. Initially offering 80% of wages, then 70% for workers to stay home and stay safe. This has again been changed so workers will get a maximum of 77% of their wages.
Payment holidays were arranged for mortgages, credit cards and finance deals. This meant that most people were probably slightly worse off than normal and staying at home. For some this period was like a gold mine, they were actually better off financially and some considerably better off.
To say the help offered was disjointed, dishonest and very much biased is likely to be a serious understatement.
For us, we were told we could not work. All work just stopped. We were offered 80% of our recorded profits, then 70% and now 20% over 3 separate 3 month periods. This sounds great to anyone not running a business.
Profits in business are the financial benefits to the business after all expenses, taxes and investments have been subtracted from gross turnover, more or less. A very small business like us does not generate a high turnover, pay all our dues to the government and invest heavily in our own business development. This results in very small profits.
These very small profits were used to calculate the level of our government help. This is how it all breaks down for Premier Disco. As a family, we had no choice but to apply for Universal Credit so we could actually eat. We have never claimed any benefits in over 40 years.
- Initially, I was given 80% of business profits, from SEISS, to run the business. By the time the government clawed back 63% of this from our UC, the business was left with £58.30 per week.
- In the second round of SEISS, the business was left with £51.03 per week.
- In the upcoming third SEISS the business will get £14.53 per week.
None of the figures above even come near to scratching the surface of the costs to maintain a business.
The government ‘very generously’ made low-cost loans available to businesses. My business has never carried credit or debt but had no option to take on this debt to survive. Grants were made available but only to business with retail outlets who were already getting rate relief. This was NOT available to thousands of businesses, mine included. There is a common misconception in the public that we were all being looked after. That is just wrong, many of us have been ignored and left to get on with it.
The government bang on about helping viable businesses get through this. What is a viable business? Is it a business able to self-support for over 40 years, return a reasonable profit and never rely on benefits of any kind? You would think so, wouldn’t you? Apparently not! There are literally thousands of businesses in exactly the same position.
Where Do We Go From Here?
As a business, Premier Disco has seriously tightened its proverbial belt. ZERO income has resulted in ZERO spending except where it involves survival. Thankfully our business suppliers, property rental etc have been very understanding and have provided payment holidays. This WILL end soon so those payments will need to be made.
Premier Disco is well-positioned to see this through to the bitter end as long as there are no substantial or unexpected changes. I fully expect not to earn a single penny until at least April 2021, a full year after my last income. This is likely to continue well after April but at a less restricted pace so I am hopeful all is good(ish)
Premier Disco will return strong and ready to go forward into the future. I will be there to provide your entertainment at whatever event you have booked.
This has been a very difficult time for us all and I will see you all on the other side.