If you’re like many small business owners you’re probably astounded by how the world has changed in a very short time. While we can all hope that the pandemic is a once-in-a-lifetime scenario, the truth is there is a lot in life and in business that is uncertain, and there is a great deal we can learn from the response to COVID-19 to help plan for the future.
Yes, your business might have changed drastically in recent months. There is good news in that, too. It means your business is adaptable and that you can find ways to survive.
Here are some lessons learned from resilient businesses and business owners during COVID-19.
1. Resilient businesses are adaptable
There are ways to adapt many small businesses to ensure they can continue operating during a crisis. The question is whether you’re willing to make the adaptation or are fighting to keep your business exactly the same as it was before.
You might miss the old ways of running your business. Missing the old way of doing things, however, doesn’t mean you have to hold firm to them. Operating a store online, allowing your restaurant to focus on take-out, offering classes online, adapting your goods or services, and letting employees work remotely are all changes that can ensure your business stays open after COVID-19 is over, and even save you money in the long run.
2. Resilient business owners plan ahead
While almost nobody saw a pandemic coming, some experts warned about the possibility of a recession and how to prepare for it. Unfortunately, many small business owners limit their planning to a crisis that lasts only a few weeks, which is where they get into financial trouble.
Disaster can strike at any time, and it doesn’t have to be a global pandemic. Having a healthy cash flow, a savings account with enough built up to cover costs for at least a few months, and a plan for addressing recession scenarios will help your business survive tough times, whatever brings them about.
You don’t want to be reactive to an emergency situation, because that’s when terrible decisions get made. Instead, plan ahead so you’re prepared and don’t have to make tough decisions based largely on emotion. Prepare for an emergency that lasts months, not just weeks.
3. Resilient business owners pay attention to what others are doing
In situations like COVID-19, business owners can learn from and help each other. Take a look at what others in your industry are doing, and even look outside your industry for inspiration. Seeing someone move their services online might give you an idea for how you can provide yours remotely. Noticing how businesses similar to yours adapt can influence you to make beneficial changes to your business.
Reach out and talk to other business owners, and to your customers, to find out how you can help them. Your BAS Agent and Accountant are a great source of help as well.
At times like these, you aren’t alone in trying to keep your business operational. Everyone is looking for solutions and there’s a good chance you can help each other.
Global pandemics can devastate a small business and have lasting impacts on an industry. There are many lessons that small business owners can take away from COVID-19 to help them survive the next economic emergency. Being adaptable, planning ahead and paying attention to others can all help your business through any economic disaster.
Want to chat about your business? Please get in touch.
Last year’s introduction of Single Touch Payroll (STP) means that tax time this year will be a little different.
Employers are now required to report pays, taxes and superannuation information directly to the ATO each payday through STP.
Employers that do report this way will not have to give you a payment summary as they usually would at this time of year. Instead, employees will get an end-of-year income statement in ATO online services through myGov.
All employers will eventually report in this manner.
Employers that do not report to the ATO in this way will still need to provide a payment summary at the end of financial year.
Employers and BAS agents have until 14 July 2020 for 20 or more employees and 31 July 2020 for 19 and under employees to complete all STP finalisations so please give them time to work through this process. You may be eager to get your tax sorted but this year it may pay to wait.
As always, please contact us if you have any questions.
Keeping track of sales, earnings, expenses, and purchases is fundamental to the overall health and sustainability of your business. Effective bookkeeping produces the data you need to evaluate your current practices, anticipate challenges, and set attainable future goals.
But despite their proven importance, many business owners dread and avoid accounting tasks. In fact, 40% of surveyed entrepreneurs claim that bookkeeping is one the worst parts of running a business!
Wondering if it’s really worth the aggravation?
Here are four reminders of how effective bookkeeping is the cornerstone of small business success.
Keeping track of your expenses
A reliable system for tracking expenses ensures you claim all the expenses that you have incurred in your business. Expenditures sorted into categories, such as “materials”, “travel”, and “office supplies,” can be catalogued quite simply with online bookkeeping software.
Using a dedicated credit card for business expenses, and updating your records on a monthly basis, will put money back in your pocket come tax time.
Measuring profitability and planning for the future
In order to grow your business, you must be able to track and compare its finances from one year to the next.
In addition to reconciling the books and bank statements every month, effective bookkeeping generates records you can use to gain a comprehensive overview of your business. This data can help you:
- measure year over year profits;
- identify opportunities to cut costs;
- plan for major expenses (such as new office space, equipment, or staff); and
- develop data-based strategies for expansion.
Preparing for tax season
Few things are more stressful for business owners than scrambling to get poorly maintained financial records ready for tax season. In addition to the panic of lodging last-minute, inaccurate or incomplete documentation can lead to serious penalties, fines, and even an audit.
Save money and get peace of mind with sound bookkeeping. You’ll be assured of compliance with the Australian Taxation Office (ATO) and correctly claiming GST credits.
Final tip: ask for help
Most entrepreneurs are passionate about developing new business ideas – not crunching numbers. Employing a professional bookkeeper, even on a part-time or as-needed basis, can help optimise your accounting and increase overall profitability.
There’s a good reason 71% of small businesses outsource at least one accounting function to help manage tasks like payroll, closing the books each month, and managing accounts receivable.
It’s well worth it. Invest in effective bookkeeping and you’ll build a solid foundation for a resilient, forward-moving small business.