The coronavirus (COVID-19) presents a significant threat to our health but is now also impacting businesses across the world. The containment of the pandemic is already resulting in dramatic fluctuations in supply and demand, labour challenges and supply chain disruptions.
With this in mind, we have prepared a 12-step guide to help you navigate through the next few months and ensure your business survives, and, ultimately, prospers.
- Protect your workers and customers
Tell all staff members that if they experience flu-like symptoms, they should not come to work. Instead, call their local doctor or the Coronavirus hotline on 1800 675 398. Customers should also be advised not to enter your office or facility if they are experiencing symptoms. If a staff member does not have symptoms but believes they may have had had contact with someone who has, then they should inform their workplace and call the Coronavirus hotline 1800 675 398.
- Monitor the advice from authorities
Regular advice continues to be disseminated by the government and leading health authorities. Be sure to keep abreast of this information and adhere to the directives.
- Encourage good personal hygiene
It might sound like stating the obvious, but good personal hygiene, such as regular handwashing with soap and water, or hand sanitiser, is one of the best ways to reduce the spread or risk of infection. So make sure your staff and customers are doing their part and maintaining good personal hygiene standards. For more information about personal hygiene, download the Victorian Government Coronavirus Poster.
- Review staffing requirements
Fluctuations in supply and demand are impacting businesses on many different levels. Firstly, forecast your likely staffing requirements over the coming months, and then secondly, understand your legal obligations should you have to make changes to your workforce. If you’re not sure of your obligations, speak with your accountant or advisor.
- Manage your supply chain
Manufacturers of staple items are struggling to keep pace with demand. While this is likely to settle down in the weeks ahead, many businesses are already reporting short supply of parts or finished product due to manufacturing and shipping delays, particularly for imported products. Talk to your suppliers to get an understanding of the likely impacts and review your inventory and stock levels accordingly.
- Explore other ways of doing business
Think laterally and explore different ways of doing business. For example, if your business relied on face-to-face interactions, consider online sales, video conferencing or home delivery as alternatives to getting goods or services to your customers.
- Focus on cashflow
Ensure you have a clear picture of your accounts payables and receivables. Be diligent with your follow-up with outstanding invoices and to maintain good supplier relationships, pay your invoices on time. If you can’t pay them on time, don’t bury your head in the sand, speak with your supplier and agree on payment date or plan.
- Preserve your capital
If you have capital inside or outside your business, try to keep approximately three months’ worth of expenses aside. Hopefully, you won’t need it, but it will help provide some buffer in case the situation worsens.
- Speak with your accountant/advisor
To get valuable strategic advice on how to plan for the months ahead, speak to your accountant or advisor. They will also be able to assist with tax planning, in particular your upcoming PAYG, BAS or Payroll Tax obligations.
- Talk with your bank manager
If you have a business, home, car or personal loan, pick up the phone and talk to your bank. If you’re having difficulty meeting your loan obligations, ask what options you have available. It’s better to be prepared than leave it too late.
- Adjust your budget and forecasts
Although it’s unknown how long the pandemic will last, it will inevitably have a financial impact on your business. So in the coming months, update your budget and financial projections to reflect the impact on your sales and operating expenses.
- Access ATO assistance
The Federal Government announced a $17.6 billion stimulus package, which includes a raft of measures including tax-free payments of up to $25,000, apprentice wage subsidies and a significant increase to the instant asset write-off threshold.
In late March 2020, the Federal and State Government announce a range of measures to assist businesses impacted by COVID-19, which include:
- Tax-free payments up to $100,000 for small business and not-for-profit employers. An increase in the previously announced initial tax-free payments for employers to a maximum of $50,000. In addition to this, a second round of payments will be made up to a maximum of $50,000, accessible from July 2020.
- Solvency safety net – temporary 6 month increase to the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000, and an increase in the time companies have to respond from 21 days to 6 months. Directors also are provided with temporary relief from personal liability for trading while insolvent for 6 months.
- Access to working capital – Introduction of a Coronavirus SME guarantee scheme protecting financial institutions by guaranteeing 50% of new loans to SMEs.
- Sole traders and self-employed eligible for Jobseeker payment – the eligibility criteria to access income support relaxed for the self-employed and sole traders.
- Temporary relief from some Corporations Act requirements.
- Businesses with annual taxable wages up to $3 million will have their payroll tax for the 2019-20 financial year waived (State Government – read more)
- Businesses that have paid for a renewable liquor licence for 2020 will be reimbursed their licence fee and those yet to pay will have the fee waived (State Government – read more)
Read more about the stimulus package here.
Finally, remember to stay calm and keep things in perspective. The pandemic won’t last forever, and hopefully, we will be through the worst of the crisis in the coming months.
If need advice for your business please call PPT on 5331 3711 (Ballarat) or 8391 3063 (Melbourne).
DISCLAIMER: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.