The COVID-19 pandemic shut down a lot of businesses in Australia, including in Victoria. That leaves many struggling to pay off debts, cover their workers’ wages, and generate profit for cash flow and capital.
What is the best course of action for enterprises once the pandemic is over or at least becomes manageable? Here are the best tips for local businesses that can help them get back on track:
1. Assess the Financial Status
Before local businesses open their doors for customers, they might want to hire an accounting firm to help them assess their financial position. Doing so can answer some of the most crucial questions:
- How much money does the business have?
- What is its debt level?
- Are there resources they can tap to cover their financial responsibilities?
- Are they in the red or black?
- How much do they need to get back on track?
- Is it still viable to do the business, or is it time to wind down the operations?
The answers can assist business owners in decision-making, especially that concerns marketing, capital infusion, customer acquisition, human resource, and profit generation.
2. Save and Create Money in Several Ways
Usually, a business forced to reduce its operations or even close its shop for a long time would need a significant amount of money to restart. While they can approach the government (as one will learn later), they can also consider other money-making strategies:
- Sell idle assets. These may refer to pieces of equipment, office supplies, vehicles, and machines that they have been using sparingly.
- Downsize. Companies can opt to let employees continue working from home. This way, the business has the option to let go of their expensive space and downsize. Perhaps they can lease a small room in a co-working space.
- Claim all the possible tax deductions. The Australian Taxation Office has enumerated some possible tax deductions for small enterprises, including those that operate at home. These include meal expenses, depreciation, running expenses like electricity, and occupancy expenses such as mortgage interest and rent.
- Launch a sale or sell products at a discount. A sale is always one of the best come-ons to remind customers that the business still exists. It also allows enterprises to get rid of their existing inventory whose storage and maintenance may be only draining the company’s coffers. This then gives way for new products that may be sold at their regular or premium price.
3. Join Victoria’s Relief Programs
Victoria has created a wide variety of programs to assist the needs of business owners badly hit by the pandemic. One of these is the Commercial Tenancy Relief Scheme.
Under this setup, landlords and owner-occupiers of commercial properties can reduce their land tax bill by 25% in 2021. The remainder of the tax liability can be deferred until 30 November this year.
The amount may include the deferred land tax incurred in 2020. Those who want to take advantage of this have until 28 March to sign up.
Other business support plans include the Licensed Hospitality Business, in which the government allocates $251 million. The goal is to provide grants to members of the hospitality industry like bars and pubs up to $30,000. They also don’t need to pay their license fees for this year.
About $100 million, meanwhile, is set aside to support sole traders. They can receive between $3,000 and $30,000 for single entrepreneurs operating retail, accommodation, gyms, events, education, training, and hairdressing, among others. These businesses must be within a commercial area where the owner is a tenant.
4. Prepare the Business for the COVID Normal
Experts believe that the COVID-19 virus is likely to stay at least within the next few months or a year even after the vaccination program has ended. Businesses, therefore, should still prepare for the COVID normal.
One of the essential steps is to allay the fears of employees. In a three-month survey by Future Forum by Slack among 9,000 knowledge workers around the world, over 30% said they didn’t want to return to the office.
Companies can reduce the apprehension by ensuring they follow the state health protocols. They can also consider expanding remote work.
When it comes to customers, business owners can carry on with encouraging cashless payments and offering kerbside delivery.
They can also strengthen their online presence. Victoria runs the Small Business Digital Adaptation Program, which provides businesses access to online tools and training that will help them run their operations over the Internet.
The road to recovery may be slow, but with the support of the government and one’s ingenuity, resilient and committed business owners will eventually get there.