Whilst I have been a “calm down the flu is worse” type of person, I know that COVID- 19 is about to impact all of us.
When stock markets crash by 10% in one day, the signs are irrefutable.
When sporting events are called off or played in front few only the team employees, we are in strife
When self-quarantine is recommended or enforced then it is only time that is between survival and failure.
The short term economic outlook is not good, not even neutral, it is dire. But there is hope. We will recover. Life will go on, and businesses will endure.
Financial survival is your only goal today. You to get to the time when you are able to rebuild your business. That will mean profits – just minimising the hurt.
Cashflow is the weapon in your arsenal. Paying “things” is now on an “absolutely necessary” basis. You must spread it around to help as many of your business partners as you can – not just the ones hassling you on the phone every day. You MUST keep enough cash in your kitty for essential activities – staff, rent – YOU. Yes, you do need to prioritise yourself for once in your business career.
At some point the prospect of laying off staff will become very real. You very likely will lose key people, but there is little that you can do to stop that, other than manage everyone’s expectations and get through this together.
Most of you are in industries that really should be impacted only on your access to staff – as opposed to client/customer exodus. If you are a retailer, café, restaurant then life will be considerably harder, however in transport, trades and property development your operations will continue albeit at a reduced level.
Some of you may well do pretty well. Real estate agents will probably do well other than reduced commission levels as prices plateau, and core services such as aged care and broking (insurance and finance) will continue to be resilient if not insulated.
The banks will not be lending in the short term to business. If I was a betting man then I would expect the government to provides further stimulus packages and address the need for small business lending – but that is mere speculation at this point. I would also expect to see some pressure on existing debts at some point in the next 3-6 months as the level of arrears starts to take lenders by storm.
Practicalities
What we know is that:
As these measures are delivered through the tax system, it appears as though only those businesses that have their tax obligations up to date, will be eligible. So all tax returns and BAS/IAS must be lodged. Getting these up to date is now critical. {More to come} |
As an employee r and business owner you are still required to adhere to all the normal laws.
So take heed of the following;
There is little doubt that this is a crisis and that strong, thoughtful leadership is required.
Your businesses can only survive, and by extension seek to prosper, by leading your own organisation effectively, with clarity and empathy. It will be tough – make no mistake – but these are the risks that we took when we all started our businesses and so we have little other choice that to “get busy living”.
Please reach out to any of us if you need some further information or assistance.
Athar Nasir (athar@ignitus.com.au) - 0452 248 073 Ginnie Tan (Ginnie@ignitus.com.au) - 0430 534 898 Colin Linke (colin@ignitus.com.au) - 0409 421 40 Farhan Daud (farhan@ignitus.com.au) - 0430 585 538