At the time of writing, there are more than 300,000 cases of COVID-19 (novel coronavirus) and 13,000 resulting deaths around the world. The economic fallout, however, could have a much greater impact over the long-term.
These are challenging times for small business owners, but there are measures you can put into place right now to protect yourself – as well as government initiatives emerging to support you through the coming months.
Prepare for business disruption
Major decisions at both a state and federal level are being made daily. That means right now is the best time to acknowledge that your business will endure disruptions over at least the next six months – if it hasn’t already – and start putting into place measures to minimise the disruption and loss. This includes:
- Drafting up a risk management plan.
- Creating a business continuity plan.
- Speaking to your lawyer, accountant or bookkeeper about what you should be focusing on most.
Also, consider what you’ll do if you fall sick yourself. Can you operate your business from home? Alternatively, can you delegate to a team member who can operate your small business in your absence? Beyond COVID-19, business disruptions can happen at any time and it’s wise to have a contingency plan in place.
Ensure your team is healthy
Where possible, allow your employees to work from home and never come into work if they are ill or displaying cold or flu-like symptoms. If your workplace is still open to the public (i.e. you are not one of the non-essential services now restricted from opening as of midday on Monday, March 23), it’s also important to encourage sensible precautions such as regular handwashing and use of hand sanitiser.
What support is available for business owners?
With states and territories announcing shutdowns and closing their borders, your business may not be able to operate for the foreseeable future. Thankfully, government stimulus packages are being rolled out to help those affected by loss of business.
- If you run a business with employees
You may be eligible for:
- Temporary cash flow support to help cover the costs of your employees’ wages.
- Assistance to help pay the wages of your apprentices or trainees.
“From 1 January, the government will rebate half the salary of apprentices you have on staff and keep on staff for the next nine months or so,” says Kate Carnell, Australian Small Business Ombudsman.
- If you are a sole trade with no employees
You may be eligible for:
- The increased instant asset write-off measures.
- The accelerated depreciation deduction arrangements.
“The government has significantly increased the instant asset write-off. The amount you can spend on an individual asset is now $150,000 and all businesses with turnovers under $500 million are eligible,” says Carnell.
Help from a second stimulus package
The government has also announced an additional stimulus package worth $66 billion – far greater than the initial $17.6 billion package initially promised. This latest measure will provide greater financial support for small business owners, especially sole traders and freelancers:
- Casual workers and sole traders will be able to access a coronavirus supplement of $550/fortnight (for the next six months). This is on top of other benefits such as Jobseeker.
- Casuals and sole traders will receive the full supplement if they are earning under $1,075 a fortnight.
- Employers who are retaining staff and turn over less than $50 million per annum will receive up to $100,000 in cash (tax free).
Financial assistance through your superannuation
Treasurer Josh Frydenburg, in announcing the second stimulus package, also explained that individuals who have been directly impacted by the financial fallout of COVID-19 can access up to $10,000 of their super this financial year, and another $10,000 in 2020-21.
“These withdrawals will be tax-free and available to those who are eligible for the coronavirus supplement, as well as sole traders who have seen their hours worked or income fall 20% or more as a result of the coronavirus,” Frydenberg said.
Keep the lines of communication open
Communication is of paramount importance at this time, especially with changes occurring so rapidly and frequently. Ensure your customers are aware of any changes to your service offering – whether it’s affected supply chain, state-wide shutdowns or otherwise – so you can maintain their confidence and ensure you are doing everything in your power to stay ‘business as usual’.
Likewise, keep your employees abreast of the situation and explain that there may be hurdles and roadblocks along the way. It’s better to be open and honest than risk causing a panic with secrecy.
Remember: while the economic impact of COVID-19 will be felt for some time to come, and the future is unclear, there is help out there – through government stimulus packages, fellow business owners and online communities. Small business owners desperately seeking support can find a full list of facts, resources and contacts online via the Australian Government Treasury, and the Australian Government Business website.