Last updated: 22 April 2020
Are you finding it hard to know how you can proactively manage your business during the coronavirus pandemic?
We’ve put together this checklist to help guide you.
1. Understand your current financial position
It’s essential to make informed decisions about your business based on your current financial position. Pending restrictions imposed by government, your ability to trade through this period, pay outstanding debts, keep employees or meet existing leasing or loan repayments will be determined by your financial position. Contact your accountant to discuss the various options which may be available and make a plan as to what you need to do to minimise the impact on your business. Cash flow is critical, especially if your existing income and trade has been significantly disrupted by COVID-19.
2. Check your eligibility for government assistance
The Australian Government has announced several stimulus packages to help business owners manage the disruptions to their business. For sole traders, this includes access to the JobSeeker Payment, which now includes a coronavirus supplement payment and an increase in the income test for partners to $79,762 to provide greater access to support.
The Western Australian Government has also announced a relief package which may assist businesses that employ staff.
3. Contact your bank and insurer
A new loan deferral arrangement for small business owners is now in place. Contact your bank or financial lender to discuss this arrangement. We also recommend talking to your bank’s hardship team if you would like to discuss the options available if you need relief from any personal mortgages or loans. Visit the Australian Banking Association website for a list of hardship contacts for each bank.
On 2 April 2020, the Australian Competition & Consumer Commission (ACCC) granted interim authorisation to insurance companies and brokers to offer payment deferrals and refunds to businesses impacted by COVID-19. The package allows existing eligible business customers suffering hardship to:
- defer insurance premium payments for up to six months (for payments due before 30 June 2020)
- request a refund for unused premiums for any policies they need to cancel as a result of the pandemic – without the cost of administration or cancellation fees
- receive a credit or refund for unused travel insurance premiums, without the cost of an administration or cancellation fee
The interim authorisation applies to Suncorp, Allianz, QBE Insurance as well as any other insurers or insurance brokers who choose to take part, as long as they notify the ACCC.
4. Communicate with your stakeholders
It’s important to communicate to all your stakeholders about what is happening with your business during the COVID-19 pandemic.
If you have staff, they need to understand what your plans and the likely impact on them. Be as calm and clear in what you are telling them as possible.
Follow up all your debtors to try and get any overdue payments in. You may need to consider negotiating, based on what they are able to pay in the current circumstances. Also communicate with your creditors to see what payments you may be able to defer. Review your trading terms to ensure that you obtain upfront payments (where possible) or a deposit for any new orders.
Keep your customers updated about your services, for example if your business is affected by restrictions, ensure you communicate as early as possible what this means for them. You should also check the latest Australian Competition and Consumer Commission (ACCC) advice on how to manage cancellations, delays or suspension of products and services in relation to your consumer obligations. If you are encouraging customers to buy gift cards for goods or services to support your business, make sure you are up to date with recent gift card laws.
5. Seek advice on deferring tax payments
The Australian Taxation Office (ATO) can grant you a deferral of certain tax obligations if your business is impacted by COVID-19. Call the ATO on 1800 806 218 or speak to your tax professional to discuss your options. Deferring payments may impact on your eligibility for other stimulus package options, so seek professional advice.
6. See if your business can still operate
As the government has announced expanded restrictions to business activity and travel, check our list of the latest restrictions to see if your business can keep operating or if there are any changes you need to make to fit in with these mandatory requirements.
7. Understand your options in relation to employees.
Familiarise yourself with your obligations as an employer. Information is available through Fair Work (for businesses under the national industrial relations system) or WA Labour Relations (for sole traders and partnerships). This information also covers issues such as when you might be able to stand down employees, redundancy information and changing work hours.
On 30 March, a $1500 per fortnight JobKeeper Payment was announced by the Federal Government to support employers in keeping their employees.
On 8 April, the Fair Work Commission inserted a new temporary provision into 99 awards to provide additional leave entitlements in response to the pandemic. More awards may be varied in the future to include similar provisions. Details are available on the Fair Work website.
8. Check your licensing requirements
If you are running your business from home or have changed the way your business operates, you may need approval from your local government authority to carry out certain types of business operations. However, you may not need approvals for certain changes.
- If your restaurant is now offering takeaway instead of dine in food, using your commercial kitchen to prepare the food, no other approvals are necessary.
- If your hairdressing salon is now offering mobile services to your customers' homes, you do not require an additional approval. However, check with your insurance broker that you are covered in this situation.
- If you are now running your business remotely from home, you do not need any approvals if your operations meet the definition of a home office under the Planning and Development (Local Planning Schemes) Regulations 2015, including that no clients or customers visit you at home, no staff work there with you and you don’t display business signage.
It’s advisable to check with your local government authority for specific advice on any change of use.
9. Commercial leasing – talk to your landlord or call us for help
We encourage you to call your landlord to discuss what arrangements can be put in place regarding your lease, particularly if your business can no longer operate.
On 29 March, the Australian Government announced a moratorium on evictions over the next six months for commercial and residential tenancies in financial distress who are unable to meet their commitments due to the impact of coronavirus. On 7 April, a mandatory code of conduct for commercial tenancies, to be legislated by each state and territory, was also announced. Commercial tenants, landlords and financial institutions are encouraged to sit down together to find a way through this period to ensure that businesses can survive and be there on the other side.
If you would like guidance, call us on 133 140 to speak to a commercial tenancy adviser (8:30am to 4:30pm on weekdays).
Please note: The State Government is currently working on a number of measures to provide assistance to small business landlord and tenants, including amendments to existing legislation to respond to the mandatory code of conduct for commercial tenancies announced on 7 April. We will provide further information on these measures once details are announced.
10. Consider whether you can draw on your superannuation
If you are a sole trader, someone whose business was suspended due to restrictions, or have experienced a 20 per cent or greater reduction in turnover as a result of the pandemic, the Federal Government is allowing special access to withdraw funds from your superannuation. The tax free withdrawals are capped at $10,000 this financial year and a further $10,000 next financial year. Applications are to be made via the my.gov.au portal, and will be managed by the ATO who will communicate with the super funds of eligible applicants.
11. Build your networks
This is an important time to reach out to your networks for support and advice. Being able to keep some control over your situation is good for your positive mental health. Keep communicating with your support networks and speak with other small businesses to share ideas and innovative practices.
A good starting point for online networking is our Facebook group I'm a small business owner in Western Australia which has more than 8,000 members and provides a space for small business owners to network, share information and seek help from your fellow business owners.
12. Keep informed of changes
Given the peak volumes of calls to many government departments, being proactive in seeking out trusted sources of information is an important way that you can keep up with the latest developments on coronavirus information for small business owners.
In addition to our dealing with coronavirus information for small business owners, other trusted sources of information that you should regularly check for updates related to small business include: