Coping with Business Impacts of the Coronavirus Pandemic
We are all now well aware of the spread and threat posed by the Covid-19 CoronaVirus pandemic and it is clear that it has, and will continue to have, a major impact on all businesses in Australia and worldwide. A significant negative impact across all industries is inevitable and no-one knows how bad it will be nor how long this will last. A recession in this country is a distinct possibility.
This being said, the impact of the pandemic (coming on the back of bushfires and drought) is not being left purely up to chance. The Federal Government has announced a $17.6 billion economic plan to try to help keep businesses open, keep Australians in jobs and to support households and the Australian economy. Within this package are initiatives that directly support business investment and provide cash flow assistance to help small and medium-sized business to survive. Business directly impacted by the bushfires can and should also continue to seek assistance under those programs announced early this year.
In addition, we set out the following key take aways for businesses and individuals expecting the crisis to seriously impact their financial well being:
- Seek advice early from your trusted accountant or financial advisor;
- Cashflow is key – keep a closer eye than usual on your receipts and payments to ensure you maintain business resilience and be well placed for recovery after coronavirus has passed;
- Can you ramp up an online strategy or a short term alternative business model to generate savings or maximise earnings? Remember this is impacting everyone and customers will be more willing to try new things, and new business opportunities may even exist in these circumstances;
- Talk early to critical suppliers about their ability to deliver reliably, and communicate clearly with customers where delays are anticipated;
- On a staffing front, there are too many issues to mention here, but suffice to say, a clear communication strategy with employees is essential, and a humane and reasoned approach in dealing with all categories of staff (Full time, casual and contractors), will assist to ensure a speedy recovery post this crisis. Encourage staff to take leave and think very carefully before resorting to redundancies;
- Where ever possible, consider cost reduction strategies, limit forward orders, seek critical supplier support and consider installment or deferred repayment arrangements;
- Engage with the ATO, seek PAYG instalment variations, consider requesting a debt deferment or repayment plan. The ATO will be very amenable to these requests in the current environment;
- Engage early with financiers if you expect there will be difficultly meeting interest or loan repayments;
- Where necessary seek legal advice early on pending contractual breaches, including the impact of “force majeure” clauses;
- Seek Government support. There are a range of government concessions and incentives available for small and medium businesses at all levels of government;
- Consider “Safe Harbour” protection, via advice from a qualified turnaround or insolvency professional. This is a formal mechanism to provide director protection from breach of insolvent trading provisions.
- If business failure is inevitable, act early, seek qualified advice from a regulated insolvency practitioner, and don’t get sucked in by promises from unregulated or unreputable advisors (whose promises will often be false).
In the interim, the team at Robson Cotter will continue to provide specialist assistance and advice in any way we can during this period. Whilst we are all still physically attending our Brisbane and Gold Coast offices currently, this may change and we will use technologies wherever possible (skype, Zoom, or other platforms you require), to facilitate meetings and discussions on a convenient and safe basis for all parties. Our ongoing aim is to ensure that we are able to continue deliver expert advice on the options available to companies and individuals who are suffering from financial distress arising from this crisis.
These are interesting times in deed, and we wish all of our referrers and clients a safe, healthy and successful journey through the challenges ahead.
Should you wish to discuss your circumstances, please call Bill Cotter on 0413 885 888. Roland Robson on 0412 982 859 or Abdul Chambal on 0402 763 883.