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How your small business can survive the ‘Corona Effect’

In world where it was already tough to run a small business – we now have incomprehensible change.  What can we do to survive?

  1.  Take care of yourself first.  The next few months will likely be tough – make sure you have a good supply at home of all the medicines you need.  There are already a number of medicines unavailable now until June, don’t get taken by surprise.
  2. Plan for a poor cash flow.
    • Now is the time to take stock of your expenses – are there any that are not essential that could be canceled even temporarily? 
    • What is the state of your accounts payable.   How much are you going to need over the next 12 weeks to ensure they stay paid within terms?
    • Examine your accounts receivable:  Make a start to engage with the late payers now and get in what you can.  Consider payment plans if needed.  It is likely that you are going to have a large number of late payers coming up so establishing expectations and ‘being a squeaky wheel’ now will help.
    • Check the levels of available cash that may be available for this rainy day time:  Do you have overdraw facilities on any loans, mortgages? What is available on the credit cards?  Know the cash limit you can handle now.
    • Get an up-to-date figure on any monies outstanding to the ATO for both tax and BAS accounts.  Can you establish a payment plan for this now.  It may be useful to keep any payment plans to a longer period for a while to ensure more cash stays in the business.
  3. If you have staff, examine the rosters you have – do you need to adjust staffing to meet the increased/decreased workload?  Are there procedures in place if a key person becomes ill and cannot attend?
  4. Check to see that all employee superannuation has been lodged and paid up to date.  If cash flow is tight consider if it would be easier to pay it on a different schedule – you can pay superannuation via a clearing house weekly, fortnightly and monthly.  If you have a lower number of staff you can pay quarterly
  5. If you are a producer – audit your raw materials stock.  Can the stock be run down for a time?  Check the availability of all items – as some may not be obtainable – is there an alternative?
  6. If you are running a cafe – audit the raw products for stock levels and availability – consider changing the menu to respond to what you can make in the kitchen.
  7. Evaluate your advertising routine: Can some of the advertising be changed quickly (in the case of temporary closure), should the budget in general be revisited?