SME Business checklist during COVID-19 outbreak

Some industries are more severely affected than others, so it’s vital to act quickly and decisively. Effective leadership and decision-making skills during this period of economic uncertainty are crucial to ensure your business is well-positioned to survive and thrive.

Make your way through the following checklist to help safeguard your business for a successful return to ‘normal’:
Build a cashflow forecast for the next 12 months and update it every month as you collect more data.
  • Export the last 12 months of trading from your accounting software and calculate your average monthly cash flow.
  • Factor in a drop in revenue of between 20-60%, or more, depending on your industry.
  • Ensure your variable expenses are adjusted with your revenue.
  • Assess how the drop in revenue will impact your trading conditions.
Review the excess expenses in your business and decide which can be cut.
  • Evaluate every expense account and remove any non-essential expenses.
  • Research ways to negotiate and reduce other expenses.
Review your wage structure and ensure you can maximise the $100,000 Cash Relief from the stimulus package.
Important: You’ll miss out on this benefit if your payroll is not structured correctly. Contact Business Turnaround Services before completing your monthly or quarterly BAS if you are unsure about your payroll structure.
Apply for the $250,000 loans as part of the stimulus package.
Even if you don’t need the loan just yet, apply now in case you do need it in the coming months. The qualifying criteria hasn’t yet been specified and will likely be treated differently by each bank, however we do know that the government is working to make these loans easily accessible.
Eligible lenders will receive a guarantee for loans with the following terms:
  • Maximum total of $250,000 per borrower.
  • Up to three years, with an initial six-month repayment holiday.
  • Unsecured (i.e. borrowers will not have to provide an asset as security).
Access the payment deferral concessions on ATO payments (for businesses directly impacted by COVID-19).
Please be aware that this is not a reduction in the debt, simply a delay of payment. Therefore, separate any cashflow saving to assist later should the business need to be propped up or to repay the ATO once you’ve navigated through this time.
Important: the ATO assistance is not automatic. Business Turnaround Services can approach the ATO to request assistance. If eligible, the ATO will customise the assistance package for you.
The payment deferral concessions allow you to:
  • Defer, by up to 4 months, the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise duty.
  • (For businesses on a quarterly reporting cycle) Opt in to monthly GST reporting to receive faster access to GST refunds you may be entitled to.
  • Vary Pay As You Go (PAYG) instalment amounts to zero for the March 2020 quarter. In this instance, you can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.
  • Remit any interest and penalties incurred on or after 23 January 2020 that have been applied to tax liabilities.
  • Enter into low-interest payment plans for your existing and ongoing tax liabilities.
Review all current debts and negotiate with banks to refinance or stop repayments where applicable.
Remember, this is not a reduction in debt but merely a delay of the repayments, so don’t spend this money unnecessarily. Instead, keep it aside to assist in navigating the current situation. Once you’re in a secure position, you can make the additional repayments to the bank if possible.
Contact your landlord and negotiate a rent-free period or a reduced rent period.
  • Ensure the landlord is aware that they can seek a loan-freeze from their bank. Be mindful that landlords are facing a different situation, so accommodate their individual circumstances as well so you can reach a result that benefits both of you.
  • Avoid spending your rent saving here. Once you’re in a secure position, you can make the additional rent repayments to the landlord if possible.
Review your team and roster to ensure you are not overstaffed.
The government has created a number of initiatives and subsidies in an effort to secure employment for as many people as possible. It takes significant time and investment to build a good team and effective organisational culture, so avoid letting go of employees too quickly to minimise disruption to your business.
  • Communicate early and communicate often. Remember, your team is going to be facing the same fears you are in the current climate.
  • Try to retain as many employees as possible, and instead split the burden (e.g. reduce wages).
  • Take the opportunity to let go of under-performing staff or those who don’t align with the business culture.
Research the other government initiatives that have come from the Federal stimulus package.
These aren’t available to the majority, however for eligible businesses the benefits could make a significant difference.
Research available initiatives at a State level (each State has taken a different approach).
Create a marketing plan for the next 6 months and execute.
While others in your industry may be on the defence, you have an opportunity to be proactive and win market share. Get creative and find inexpensive ways to reach new customers. Use this downtime to create effective content that will build your personal and business brand e.g. write a book, produce a video; do something you’d normally be too busy to do!

Business Turnaround Services is here to help!

If you’d like assistance with any of the checklist items above, or if you have questions, please get in touch with us today.

We are armed and ready to stabilise and grow your business with our team of management consultants, management accountants, operations managers and marketing team.

In order to support our new and existing clients during this time, we have extended our trading hours to be available six days a week (Monday to Saturday) 9am to 5pm. So please send us an email or call and we will get in touch with you within 24hrs.
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