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.
Welcome back to our Weekly Digest. We hope you and your family are safe and doing well. Read on for this week’s update.
JobKeeper Changes Coming in September
This week the PM announced the JobKeeper wage subsidy scheme will be extended from September through to March next year, with some changes. This comes as businesses continue to struggle and as an increase in infections has been reported in the southeast.
The JobKeeper subsidy has been extended to 28th March 2021. However, there are some changes that you should know about. Please be aware there are still plenty of “unknowns” surrounding the next steps but we will update you as we get more details.
The next phase of JobKeeper will start at the end of September at a reduced rate of $1200 per fortnight for full-time workers and those working for more than 20 hours per week, from $1500 per fortnight previously. Meanwhile, those working for less than 20 hours a week will receive $750 per fortnight.
From 4th January 2021 the payments will further decrease to $1000 per fortnight for full-time workers, and to $650 per fortnight for those working less than 20 hours per week.
New Eligibility Test
From October, the payment will be subject to a new eligibility test which assesses whether the business recovered in the last 6 months.
Reassessments in October and January
In early October, businesses will need to prove they’re in financial distress (showing a decline of at least 30%) in the June 2020 quarter in order to be eligible for the October – December scheme. This will need to be proven again in early January based on September quarter figures.
It is important to note that these changes are yet to be legislated, which means that they are subject to change. As the finer details become available, we will pass them on. If you need help in evaluating the impact of these changes to your current situation, feel free to contact us for guidance.
Government-backed COVID-19 Loans Extended
The government is extending the small business COVID-19 loans scheme until June 2021. The second phase will kick off on October 1 with the following changes:
- Loans will be provided for purposes other than working capital;
- Secured loans (i.e. where collateral is presented) will be permitted in addition to unsecured loans;
- The maximum loan size will increase four-fold to $1 million, up from $250,000 per borrower;
- The maximum loan term will increase to five years, up from three years; and
- Lenders will have additional discretion to offer repayment holidays.
If you need help to avail these loans or you want to find out if you are eligible, don’t hesitate to drop us a message.
Growing Your Network When There are No Networking Events
As a business owner, you may have been part of the typical ways of networking like attending conferences and business dinners. However, with so much of the world in lockdown at the moment, growing your professional connections the traditional way may nto be possible.
While you can build relationships virtually by engaging on LinkedIn and other social media platforms, this insightful Harvard Business Review article shares other strategies to consider including:
- Turning canceled conferences into private networking opportunities.
- Rethinking geographic boundaries when creating guest lists for virtual cocktail gatherings.
- Inviting senior leaders to online working group meetings.
Aside from virtual conferences, sharing your expertise, whether by volunteering, creating online content or courses, or contributing to online communities, can introduce you to new people who need what you offer. If you want to talk about your specific situation and rethink your business strategy, please get in touch with us and we’ll help you work out a plan.
Beware of COVID-19 Scams
Scammers are taking advantage of the COVID-19 pandemic to con people into giving their money or confidential personal information. Here are some of the COVID-19 scams to look out for:
- Scams offering COVID-19 testing, vaccines, or a cure
- Fake charities
- “Person in need” scams
- Scams targeting Social Security benefits
While the reason behind the fraud is new, the tactics are familiar. The best defence is to say No if anyone contacts you asking for your personal information like, bank account or credit card details, or driver’s licence number; someone you don’t know requests money through a payment app or pre-paid gift cards; someone you don’t know sends you a cheque for some reason and asks you to send a portion back; or simply your gut tells you that it is too good to be true or it doesn’t feel right.
It pays to be wary in these situations so please be on the lookout for these scams.
Australian Team Develops Blood Test to Detect COVID-19 in 20 Minutes
A research team led by BioPRIA and Monash University’s chemical engineering department, including researchers from ARC Centre of Excellence in Convergent BioNano Science and Technology has successfully developed a blood test that can detect COVID-19 in 20 minutes.
This test will allow medical practitioners to analyse 200-700 blood samples in an hour. Furthermore, it can also aid high-risk countries in contact tracing, as well as vaccine efficacy confirmation during clinical trials and vaccine distribution.
State grants and support programs
Along with national assistance, each state and territory has announced various grants and assistance packages which you may be eligible for. You can find a roundup of these grants on the Government’s Business website. Alternatively, you can also contact us so we can discuss which options are most suitable for your business.
Boosting Your Digital Capabilities
Small businesses across Australia can access individual support to grow their digital capabilities through the Australian Small Business Advisory Services Digital Solutions. This program offers small businesses with fewer than 20 full-time employees and sole traders with high quality advice on a range of digital solutions to meet their business needs at a subsidised rate. More information can be found here.
We’ll keep you updated if as we get more news and updates. Now is the time to prepare a budget and cashflow forecast so you’re ready and well prepared for the coming months.
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.