Tips to get you back on track
Get expert insights and access support for how to manage staff and hold onto your customers.
DIANA: Welcome to ‘Q&: Understanding Small Business’. I’m Diana Mousina, and i'm a senior economist at AMP Capital. As COVID-19 continues to change the financial landscape, my colleagues and I are answering some of your questions about how this might affect small and medium-sized Australian businesses.
Today I’m joined by Craig Banning, a certified financial planner and the CEO of Navweath Financial Services, to provide some tips for how businesses can best navigate the changing times.
CRAIG: Thanks Diana. All businesses right now should be conducting a thorough internal review, so they can get an accurate picture of how they’re performing in the current climate.
The priority is to remain solvent, and this may require some changes to the business, such as adding or dropping certain services or products to adapt to the changing times.
To do this, business owners should thoroughly review their accounts and make sure they know their numbers on the best and worst performing products or services.
We also recommend looking closely at your costs, so you have a clear idea of which ones
are essential to the running of your business, and which ones can be cut or frozen if needed.
DIANA: For most businesses, retaining staff is a top priority.Can you tell us about some of the government support programs that help make this possible?
CRAIG: The JobKeeper package is a fantastic initiative, as it intends to keep employees
connected to their employers, so businesses may reopen as seamlessly as possible after the lockdown.
The government pays the $1,500 per fortnight JobKeeper payment to eligible employers,
for them to then pass onto their employees. Some casual workers may be eligible, depending on how long they’ve been with the same employer.
We saw the first round of payments flow through to eligible employees’ bank accounts in early May. The JobKeeper application is managed by employers using the ATO’s business portal. Businesses need to apply within seven days of the end of each month for the next month’s payments. So, business owners need to keep on top of this.
DIANA: What other assistance is available to small and medium businesses at the moment?
CRAIG: To help businesses with their cash flow over this time, they can apply for a tax-free credit of between $20,000 and $100,000. This applies to eligible businesses and not-for-profits with an annual turnover of under $50 million.
These cash flow support measures will be provided in the form of a credit in the activity statement system. Businesses should speak to their accountant or bookkeeper if they’re considering applying for this assistance, as they will need to determine the reduction in their business revenue.
DIANA: These measures are designed to help businesses with their staffing and cash flow problems in the immediate term. Once they’ve addressed these concerns, how can businesses begin to prepare for any challenges that may face them after the lockdown?
CRAIG: We believe there are five steps a business can take to prepare for the new post-COVID landscape.
Step 1 is planning. You should prepare a full business SWOT, using as much up-to-date information as possible. Review your cash flow and any incentives that might be applicable to your business.
Step 2 is tracking. You should be updating your accounting software at least weekly, to stay on top of your revenue and expenses.
Step 3 is to adapt to the new environment and what your customers want now. As I mentioned earlier, this might mean dropping certain products or services or thinking of new ones.
You could also look at changes like expanding your online presence, stepping up your social media marketing or offering free delivery.
Step 4 is to review. This is not a time to set a plan in place and forget about it. Businesses need to monitor their performance like never before.
Keep tracking how your business income and expenditure are performing against your budget.
Step 5 is to get advice. Business owners should remember that they’re not alone in this.
Your accountant or bookkeeper is a fantastic resource and can help you make sure you don’t miss any of the government’s COVID-19 incentives.
DIANA: Thanks Craig. Plenty of ideas there for business owners. Here's a quick recap:
The COVID-19 outbreak continues to wreak havoc on the financial landscape with many Australian small and medium-sized businesses affected by the economic downturn. We share some tips on how businesses can best navigate the changing times.
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