Coronavirus is making its way through Australia and everywhere you look there is a news article, government announcement, meme, email, tweet or website all about it. But how should your small business prepare for COVID-19? For many small businesses, it’s possible that any response by governments to slow the public health risk may result in a sudden fall in demand for your products or services.
While the government is busy trying to slow the infection rate of this virus, you need to be busy trying to place yourself and your business in the best possible position to not only navigate through the crisis but to also be better prepared to take advantage of the recovery.
We have come up with a list of some things that you might want to consider doing in your business:
- Keep up to date with official information on COVID-19 and any directions public health authorities may issue
It’s easy to wither your days away watching every press conference from every politician or every public health organization or reading every article that a friend shared on Facebook in a crisis like this. While keeping up to date is very important, you also need to run your business. Our suggestion is to find a source of reliable information for the morning and then another for the evening. The Hodkinson Accounting website or Facebook page is a good place to start. We will endeavour to keep our clients up to date with relevant information and developments as they arise. The financial response to this crisis is changing every day, so its important to continually review a reliable source of information.
- Put in place a contingency plan
This means asking yourself questions like “what will you do if a staff member, or their family or a customer catch COVID-19?” and “Can you and your staff work remotely?” These questions are often difficult to answer, but it’s far more sensible to be able to consider the answer properly than be forced to come up with an answer in the heat of the moment. We have a checklist questionnaire COVID-19 contingency plan that may help with this, contact our office for a copy.
- Contact your clients and advise them on what you are doing.
That means if you’re staying open, tell them. Also tell them the measures you are taking to ensure that your place of business is safe, clean and COVID-19 free. Your clients need reassurance just like you do.
- Update your financial statements
Fortunately, this is fairly easy these days thanks to bank feeds and online bookkeeping software. If you keep your books up to date, should the situation arise where you need to avail yourself of a government incentive or ATO concession, or even just discussing your businesses performance and strategies during this time with your accountants (us), then you can reference up to date and relevant information.
- Re-do your budgets with new assumptions
We talk to lots of clients about the importance of having a fluid budget that is reviewed at multiple points during the year. This is one of those times. Analyse the effect that you think this crisis may have on your business and what you think the flow-on effects may be. This will identify what areas you need to focus on and would likely highlight any risk areas that may be coming up.
- Talk to key suppliers about their plans
This will feed into your contingency plan and answer the question of “what am I going to do if I can’t get stock?” It will also make you aware of any temporary measures you may need to implement to ensure hygiene/safety standards continue to be upheld within your business.
- Look at your numbers
There is no time more vital than now to understand the key drivers of your business. Look and understand your sales, wages expense, profit margins, key ratios regularly so you can identify any risks early.
- If you find yourself in financial difficulty, seek professional advice early
We will be working through this situation (either from the office or at home), so please don’t hesitate to contact us if you think you need help.
Obviously, as always, be very wary of anyone cold-calling you, promising financial salvation. You always know there is one reliable source of all the financial assistance packages offered by the various levels of government, or of the concessions made by various larger businesses (like banks), and that’s hodkinsonaccounting.com.au or facebook.com/hodkinsonaccounting