In the wake of the coronavirus restrictions and shutdowns, many businesses have had to and will have to close their doors and effectively “hibernate”. We have already seen the first wave of businesses that have had to close their doors like cafes, gyms, bars, restaurants and beauty therapists. Over the last few days we have seen some of the larger retailers, like Myer and Kathmandu, announce that they too would be temporarily closing their stores.
The Government has indicated that they expect these measures to be in force for a period of at least six months, that is until September 2020. However, they want these businesses to start again, they do not want those businesses to be saddled with debt and rental repayments and other liabilities.
So, if you have made the decision to close your doors, we suggest you work on the following during your hibernation period:
At a minimum look at what your cash outflow requirements are over the next 6 to 12 months and review this on a weekly basis. Cut unnecessary spending immediately. Review and cancel / put on hold subscriptions.
- Contact your bank
All the banks are coming out and saying they will do a holiday repayment for a minimum of 6 months. This will not be treated as hardship and will not affect the on-going impact with the current lender. The most important thing to do is contact the bank prior to being late for any payments. Any arrears could hinder the process and outcome.
- Ensure you pay any employee superannuation by the due dates
Employers still need to meet their SG obligations. The ATO has no discretion under the SGC rules to vary the due date or waive the SGC where contributions are late/unpaid. We encourage clients to pay staff super at the same time as when they physically pay staff wages.
- Talk to your suppliers
It is best to be open and speak with all of your suppliers about your situation. Keep them informed. It will be much easier to work with them again in the future if they remember that you kept them in the loop and were honest.
- Create a customer communication plan
Plan your marketing campaign now so you have a ‘bank of marketing’ ready for your re-opening. Write blogs and facebook content.
Is there a project or system you had been meaning to implement in the business that you can use this time to do?
Review your stock levels and look at options to sell / reduce your stock before you shut your business. Can you sell your coffee bean stock via your facebook page? Can you freeze any food? Also, consider what stock levels you require to start up again – talk to your suppliers now and work out more favourable payment terms to allow you to “open your doors” when the government gives you the go ahead.
- Health and family
Take this time to improve yours and the family’s health, increase your fitness, play more with the kids and ensure the kids keep up their schooling.
We understand this is a difficult time for any business owner. Ask for help. We are all in this together.