Business AdviceJournal entry

September warning: what SMEs need to prepare for 6 months into the pandemic

By August 21, 2020 May 9th, 2022 Reading time: 3 minutes
Image credit: Vanguard Visions via. Flickr

In a normal year, September heralds football finals, the start of spring, and the surprising realisation that major retailers are setting up for Christmas already.

This year is different.

September will mark six months since the start of the coronavirus pandemic stimulus packages across Australia. This includes JobKeeper, JobSeeker, rental relief, loan repayment deferrals, and others. While the Morrison Government is currently revamping these, businesses must begin to prepare now.

The six month mark will come at the same time as quarterly BAS payments, and these combined could be disastrous for under-prepared businesses if they are no longer eligible.

For many small and medium business owners, the coming months mean continued uncertainty as the country deals with a second wave of pandemic, and a state of flux around tightening and relaxing of restrictions.

Like most business owners, we aren’t able to tell what the 20/21 financial year is going to look like, nor what assistance from Government could look like in the face of ongoing restrictions, but we can help mitigate the uncertainty.

Plan for September now

The best way to deal with uncertainty is to deal with what you know. Right now, the stimulus is set to evolve, and that means you’ll need to prepare how your business, and potentially your personal finances, deal without this support.

You’ll need to look at the new version of ‘business-as-usual’ and prepare for restrictions that cause ebb and flow in business. That means a good budget, solid business processes and a clear idea of what  you would like to achieve.

It’s important to remember other BAU factors like seasonality, potential growth issues and even the basics such as invoicing.

Make a real assessment of your business, you may need to cut back and conserve capital sooner rather than later.


Image source: Jirsak via. Adobe Stock

Your business beyond the stimulus

Thinking beyond the stimulus, you will need to consider the next steps and how your business will thrive in a new environment.

There are multitude of options. Can I Pivot? If not, then what else? What next?

Many businesses are struggling, but are also pivoting, changing and innovating. The silver lining of the pandemic is that it will likely push forward innovation in business practice, even in traditionally resistant industries such as hospitality, which is embracing technology to deal with closed dining rooms, social distancing and reliance on takeaway, delivery and e-commerce.

What will your business look like without JobKeeper

Business owners will need to make some potentially tough decisions about staff once or even before JobKeeper has ended.

You will need to assess whether you have the revenue or cash in hand to continue to pay staff and deliver business as usual.

Do not forget your legal responsibilities. If you need to make any permanent staff redundant, you will also need to pay out entitlements.

The Council of Small Business Organisations Australia chief executive Peter Strong warned that accruing of entitlements was “a huge issue” and said some businesses would be better off without ‘zombie workers’ who would present a financial liability to let go.

“It’s been a good scheme because it’s meant keeping more people on. But many are accruing a debt that they can’t pay because they haven’t got the income coming in,” Mr Strong told the AFR.

Dealing with loan deferrals

Business owners will also need to be realistic about their debt once the deferrals lift.

If you have deferred or put on hold loan repayments, you will need to know exactly what and how you’re expected to repay. You should not be caught out on this, so ensure you are very clear as to what is expected and prepare to meet that obligation.

If you need clarity or help with visualising what this may look like for you, feel free to reach out to us.

Jun Yan

Jun Yan

Jun Yan is the co-founder and director at Ravit Insights. Prior to this, he was a commercial banker at NAB.

Leave a Reply