As a business owner, being in charge of your staff’s livelihoods is a responsibility that can lose you sleep, even in boom times.
In the current climate, with many businesses reeling from revenue or business model hits due to the Covid-19 pandemic, keeping people in jobs is a genuine crisis.
The Federal Government has released a wage subsidy of $1500 a fortnight per employee with the aim to keep thousands in work during a time where we are in “social hibernation”.
Through our financial modelling, we help businesses understand what will happen in varying situations.
For many industries, hospitality, fitness and retail, dealing with such a sharp decline in revenue is almost unprecedented.
To keep businesses operational or even viable in “hibernation” there are a few solid strategies that can help and hopefully keep staff on board through the hard months.
Can your business access the JobKeeper subsidy?
Businesses and sole traders with revenue under $1 billion will be able to access the JobKeeper subsidy of $1500 a fortnight to support employees if their revenue has fallen by more than 30 per cent (of at least a month).
The Government has also introduced discretionary measures to allow for pre-revenue, high-growth and businesses that have not been in operation for a year.
The best resource to keep up with changing information for these and other measures is direct through Government websites. We also recommend contacting your accountant for more information specific to your business.
Cut costs
Depending on how the current economy has affected your business there are probably areas that ordinarily would be considered essential that must be cut at least temporarily.
Redeploy: If you are a larger business, you might be able to move staff into different roles where more help is needed.
Leave: Other businesses are reacting by asking staff to take periods of leave, both paid and unpaid, through the pandemic period to balance their cash.
Re-negotiate terms
It is essential during these months of uncertainty to assess whether your business has a cash flow, revenue or other problem.
If it is cash flow related, speak to suppliers and other stakeholders about different terms to cope through the pandemic.
One area under focus is commercial rent with landlords moving to defer rental payments. Some co-working spaces, including the one we are based in Stone&Chalk, have offered three months rent reprieve to assist businesses through the crisis.
Flip your business
If we told you a month ago, that Attica, one of the world’s 100 best restaurants, would pivot into a bakery to survive, you’d have laughed at us.
But it has, and many other strong brands in the restaurant business have likewise flipped their models to survive through an uncertain period.
Many of us can look to these savvy business owners for inspiration on how we can change and adapt to the rapidly evolving situation.
But keep your eye on the future, a crisis can push a business to change in positive ways and ensuring you think long-term will help ensure you make the right choices now.
Charles Darwin said it best: “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”
Keep communicating with your team
In this period of social distancing, keeping connected to your team is important. You don’t want to lose good staff through lack of support as they’ll be essential to your recovery when things begin to pick-up again.
Although a time of uncertainty, giving your team updates to keep business progressing, and the team informed about their potential job security will help not only productivity, but their personal well-being.
There is no doubt that no matter what your business is, it will be a time of evolution and change. Before making major decisions it will pay off in the long-term to return to your key business drivers and fundamentals.
We also have responsibility, and now incentives, to keep our teams together and staff employed where we can through the Covid-19 crisis.
Understanding where your cash flow and growth has come from in the past, and where it is likely to pick up when the economy begins to recover will help guide your choices so they are beneficial to your business now, and when the good times come again.
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