Are you finding it hard to know how you can proactively manage your business during the corona-virus pandemic? Here's some suggestions ....
1. Understand your current financial position
It’s essential to make informed decisions about your business based on your current financial position. Pending restrictions imposed by government, your ability to trade through this period, pay outstanding debts, keep employees or meet existing leasing or loan repayments will be determined by your financial position. Contact your accountant to discuss the various options which may be available and make a plan as to what you need to do to minimise the impact on your business. Cash flow is critical, especially if your existing income and trade has been significantly disrupted by COVID-19.
2. Check your eligibility for government assistance
The Australian Government has announced several stimulus packages to help business owners manage the disruptions to their business. For sole traders, this includes access to the JobSeeker Payment, which now includes a coronavirus supplement payment and an increase in the income test for partners.
On 2 April 2020, the Australian Competition & Consumer Commission (ACCC) granted interim authorisation to insurance companies and brokers to offer payment deferrals and refunds to businesses impacted by COVID-19. The package allows existing eligible business customers suffering hardship to:
defer insurance premium payments for up to six months (for payments due before 30 June 2020)
request a refund for unused premiums for any policies they need to cancel as a result of the pandemic – without the cost of administration or cancellation fees
receive a credit or refund for unused travel insurance premiums, without the cost of an administration or cancellation fee
The interim authorisation applies to Suncorp, Allianz, QBE Insurance as well as any other insurers or insurance brokers who choose to take part, as long as they notify the ACCC.
4. Communicate with your stakeholders
It’s important to communicate to all your stakeholders about what is happening with your business during the COVID-19 pandemic.
If you have staff, they need to understand what your plans and the likely impact on them. Be as calm and clear in what you are telling them as possible.
Follow up all your debtors to try and get any overdue payments in. You may need to consider negotiating, based on what they are able to pay in the current circumstances. Also communicate with your creditors to see what payments you may be able to defer. Review your trading terms to ensure that you obtain upfront payments (where possible) or a deposit for any new orders.
Keep your customers updated about your services, for example if your business is affected by restrictions, ensure you communicate as early as possible what this means for them.
5. Seek advice on deferring tax payments
The Australian Taxation Office (ATO) can grant you a deferral of certain tax obligations if your business is impacted by COVID-19. Call the ATO on 1800 806 218 or speak to your tax professional to discuss your options. Deferring payments may impact on your eligibility for other stimulus package options, so seek professional advice.
6. See if your business can still operate
As the government has announced expanded restrictions to business activity and travel, check our list of the latest restrictions to see if your business can keep operating or if there are any changes you need to make to fit in with these mandatory requirements.
7. Understand your options in relation to employees.
Familiarise yourself with your obligations as an employer. Information is available through Fair Work (for businesses under the national industrial relations system). This information also covers issues such as when you might be able to stand down employees, redundancy information and changing work hours.
On 30 March, a $1500 per fortnight JobKeeper Payment was announced by the Federal Government to support employers in retaining their employees. One of the eligibility criteria is that you are able to demonstrate that your business has suffered at least a 30% drop in revenue due to the pandemic.
8. Consider whether you can draw on your superannuation
If you are a sole trader whose hours of work or income has fallen by 20 per cent or more as a result of the pandemic, the Federal Government is allowing you to access your superannuation. This is capped at $10,000 this financial year and a further $10,000 next financial year. The withdrawals will be tax free.
9. Reach out for support
This is an important time to reach out to your networks for support and advice. Being able to identify ways in which you can at least exercise some control over your situation is good for your positive mental health. Keep communicating and stay connected with your support networks and speak with other small business owners to share ideas and explore possible opportunities for more innovative practices.
You don’t have to work through this alone - don’t allow pride to stop you from reaching out and asking for help if you need it. The last thing you want to be doing is bottling up any feelings of anxiety or despair. Open up and share your feelings with people who care about you - be it co-workers, family or friends. This pandemic will eventually pass + not tomorrow, nor next month ..... but at some point it will pass. Yes, you must step back and possibly make some hard decisions in assessing the viability of your business moving forward. But what is even more important, more integral to your ability to lead your business through this crisis, is that you take steps to maintain your own personal physical and mental health. You need to ensure any decisions you are going to make about the future of your business are coming from a place of reasoned judgment- and not one ruled by anxiety nor fear. And if you’re looking for some quick tips on how to boost your drive and energy, check out Self-Motivation
Stay up to date with all the government announcements and any rule changes at Business.gov.au