We live in unprecedented times physically, socially and as businesses: financially and economically. We are phasing an unknown enemy: COVID-19 and how your business will adapt and emerge at the end of this turmoil is tied up to your response, leadership and planning in the time you have NOW.
Below are some of the strategies you need to consider:
1. Assess what is within your control and what your business key drivers are:
* Is your environment safe for staff and clients?
* Which revenue streams will be affected?
* What strategies can be taken to protect and maintain revenue?
* What obligations do you have to financial institutions?
* What statutory obligations exist?
2. Create a COVID-19 coronavirus/natural disaster team which will meet daily (10 – 15 minutes) to review issues and to recommend new or amended strategies. If you are a sole trader or small business: speak to your accountant, even I am willing to talk to you.
3. If not already done so, implement strategies to enable team members to productively work from their homes. Issues to consider:
- computer access
- server access
- access to Zoom/Skype for meetings
Keep, or commence daily, meeting (huddles) to help communications continue within the business. When people are working from home connect them into the meetings, if possible, by utilisation of Zoom/Skype communications technology.
4. Keep in touch with suppliers. If they can’t help you, explore new supplier chains or alternative lines of supply.
5. Keep in touch with customers and assure them that you are mindful of the need to keep the supply chain operating. Ask them questions about their order book so you get an indication as to what is happening within their customer base.
6. Monitor the cashflow position within your business on a regular basis. Can improvements be made to debtors’ management, investment in inventory, alternative delivery methods, payments time? Can you increase exposure to other platforms to sell and market your business (e-commerce and social media platforms)?
7. Review costs – where can efficiencies be introduced? Review and reduce your expenses or eliminate some of them. Can you defer some expenses, work out terms with your landlord?
8. Update Budget and Cashflow Forecasts and have discussions with your bank or financiers in relation to financial support that they can give you. Adapt and amend your business plans if necessary.
The Australian Taxation Office (ATO) can provide relief through the following initiatives:
- Deferring (by up to four months) the payment date of amounts due through the business activity statement—including pay as you go (PAYG)instalments—income tax assessments, fringe benefits tax assessments and excise tax.
- Allowing businesses on a quarterly reporting cycle to opt into monthly GST reporting to get quicker access to GST refunds they may be entitled to.
- Allowing businesses to vary PAYG instalment amounts to zero for the March 2020 quarter. Those businesses can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.
- Remitting any interest and penalties, incurred on or after 23January 2020, that have been applied to tax liabilities.
- Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low-interest plans.
9. Continually review your team member strategies relative to:
- Where a team member has been in contact with someone who has contracted coronavirus and who is refusing to self-quarantine.
- Processes if a team member is obviously ill and will not agree to self-quarantine.
- Policies if a team member has no sick leave left.
- Reducing working hours.
- Insisting on staff taking time off – out of annual leave – out of long service leave (if any) – if no leave left – leave without pay.
- Reduction in the amount of pay being paid to employees.
10. Check the list of government loans/grants that the business might be eligible to apply for. Whilst this is a developing scenario, there will be an article following regarding the assistance that financial institutions and the ATO will give.
Should you wish to discuss any of the above, do not hesitate to contact me. I also have available a comprehensive “Coronavirus: Risk-Response checklist”.