Covid-19: Model for 50% less income, creative businesses told

Creative businesses will need to drastically cut costs and plan ahead to survive the financial drain of the coronavirus, experts have warned. 

In a live Twitter chat hosted by ArtsProfessional on Tuesday, Creative United business advisers offered guidance on sustaining organisations throughout and beyond the lockdown.

Sarah Thelwell of creative business finance company MyCake recommended re-running budgets assuming a 50% drop in trading income over the next 12 months.

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Businesses should look to cut costs – reducing the thermostat and turning off utilities, for example – then consider what they can cover without trading.

Reserves may not go far enough and furloughing is "no guarantee that further cuts can be avoided," Thelwall said.

"We are looking at three to 18 months of impact. Having enough to cashflow your first few [months] of reopening when trading won't have fully returned will be important."

Beyond crisis management

Think Philanthropy Founder Andrew Evans said businesses should keep their boards informed about "essential matters".

"They will want to be reassured you are on top of things," he said.

"Give regular email updates on essential matters but defer anything non urgent."

James West, Director of business growth consultancy West Creative, said planning and strategising should come back into focus "once you can get beyond immediate crisis management".

He suggested reaching out to colleagues and customers – "great time to get feedback" – and joining or establishing interest groups online.

Advice for freelancers

Asked how to keep a career alive without work, West said: "whatever you do, make it relevant to your business."

"With a blank canvas of opportunities its easy to get distracted. There's lots of fun to be had in raising awareness – but keep it relevant to you, your products [and] services."

The business advisers also signposted hardship funds for freelancers, resources for those financially affected by Covid-19, and a business checklist from the National Council for Voluntary Organisations (NCVO).