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Covid-19 - Call to Action

April 17, 2020

As we entered into these unprecedented times of being locked away in our ‘bubbles’ no doubt what was foremost on the minds of many business owners was survival.

The challenges are obviously different for different businesses and industries – some like essential services are clearly still operating albeit that has its own unique factors given the income streams would be most likely be fluctuating.Some are working remotely like ourselves – that isn’t all it’s cracked up to be and does affect productivity.

Then there’s staff to consider – and not just how to pay them but the moral obligations around protecting them and their own families.

But at the forefront is the ability to generate cash – because for small business operators there’s normally not a lot left in the tank so to speak for that rainy day – so where are the funds coming from.And that is exacerbated right throughout that supply chain – debtor days will increase which only channels back through to others.

There has been relief provided albeit perhaps not to everyone’s liking and certainly not in a way that is easily accessed – outside of the wage subsidy there are many other expenses and capital costs to manage – the access to other relief including the recent loss offset scheme will require some navigation and good robust and interpreted financial data.

With all of the information and guidance out there – as well as the myriad of media coverage we’ve highlighted below some key action plans we feel should be tackled by every business owner immediately.

COVID-19 action plans:

  • Consider daily cashflow projections – week to week or month to month is not granular enough to highlight when the cash is going to dry up during this period of lockdown
  • Talk to Landlords – the Government has clearly put the onus on the parties to negotiate – we’ve had many stories of vastly different outcomes, but our view is everyone needs to take part in accepting some cost
  • Consider postponing dividends and profit drawings – clearly lifestyles dictate some of this but owners need to accept that underlying funding in the short term may well have to come out of their own pocket – it’s also a very good sign to your wider team of the leadership you’re showing by doing so
  • Review and reduce all non-essential spending – clearly if you have premises that are not attended then you don’t necessarily need the cleaner right now or the milk delivered
  • Implement technology advancements to assist with continued business operations – all businesses have some aspect of administration or marketing that can be worked on remotely – even in hospitality – think laterally about how to deliver your service
  • Consider alternative service offerings to customer base
  • Consider flexible employment arrangements; flexible hours, leave without pay etc
  • Liaise with suppliers to ascertain their position to continue to supply
  • Contact insurance brokers regarding potential claims or premium holidays
  • Speak to bank about various options to provide funding including the governments new scheme, interest only options or repayment holidays – overdraft extensions – beware of the costs and our reports from clients suggest this is not as easy as the Government has suggested
  • Review payroll and ensure all payroll calculations in light of restructured hours are correct
  • How are you looking after your team during the lock down?Are you communicating with them and how and checking their circumstances and ensuring their mental wellbeing?
  • Sending narration on statements this month to gauge ability for customers to pay to assist with cashflow forecasting – look for other opportunities to assist customers with payment – fee funders etc
  • And use this time wisely to work on your business – never has there been a truer use of that slogan (but there’s only so much Netflix you can watch and there’s no doubt plenty of housekeeping to be done) strategise, provoke thought amongst your team and ultimately consider what business will look like out of lockdown