Advice for businesses and individual affected by the Covid-19 crisis

As our clients suffer through this unprecedented crisis that is affecting a huge sector of the economy, we are here to help you wherever possible survive these turbulent times.  Below are a few things to consider that may help you or your business:

Cashflow

• It is imperative that affected businesses develop realistic cashflow forecasts for the next 3, 6 and 12 months.
• When approaching lenders for assistance, showing a good understanding of your own cashflow will be vital.
• Even just a basic version will help you understand where and when you may be vulnerable and help highlight areas of relief.
• Start with your expected inflows and establish worst-case scenarios.  Make the forecast editable so you can change key income items.
• Measure your fixed outflows such as rent, loan repayments, wages or leave to full-time staff etc.
• Understand your variable outflows like your cost of goods.
• Review each line item and try and find savings everywhere.
• Change key variables to see how and when your cash balances become critical.  This information will be valuable particularly when discussing with banks.

Stimulus Packages

• Stay on top of the federal and state government announcements on various stimulus packages.
• Read here for the Victorian state government assistance package.
• And here for the Federal stimulus package.

Banking & Lending

• Each bank has announced a range of different measures to assist customers.
• These range from pausing home loan and business loan repayments for six months, longer opening hours etc.
• Be in constant contact with the bank and put pressure on them to help you.

Employees

• Most, if not all employers we speak to tell us their major concern is being able to continue paying their staff during slowtimes or downtimes.
• Sometimes it will require them to scale back hours for the business to survive, and sometimes they will need to take leave they wouldn’t already need to.
• Having genuine conversations about your business with your staff helps everyone gain a common understanding and the need to be able to hit the ground running when it’s all over.

Rent

• Consider having a frank discussion with your landlord about your ability to continue paying the rent if possible.
• Ensure you seek legal opinion before amending leases.
• Some may be amenable to reducing rent or deferring a portion of rent for a temporary time.
• It will require some understanding on both sides, as most landlords don’t want tenants to default and cause them to look for new tenants, but at the same time want the capital value of their land unaffected – it’s all about sharing the pain.

Mental Health

• The 24-hour coverage of the crisis, never ending commentary on social media and pressures on finances may give you the feeling of helplessness or of being overwhelmed.
• Constant use of terms like ‘recession’  and ‘isolation’  are major mental health red flags.
• It’s imperative that you reach out to your family, friends, business colleagues at this time and take the time to have a chat.
• For those who aren’t affected or are dealing with things, make sure you reach out to those struggling and ask – R U OK?
• Use the services like beyond blue or lifeline to help you understand your feelings and work out ways of dealing with the stress.