Without a doubt, 2020 has been a challenging and difficult year. We have all had to pivot and adapt to a new concept of what is “normal” in both work and social settings.
We have been assisting our clients with navigating the various COVID tax and funding measures and strategies to keep their businesses going throughout this year.
Here are some of the lessons we have learnt during 2020:
#1 Cash is King
Our clients with good savings and strong cash reserves were in a better position to weather the storm when the COVID restrictions were implemented. Those clients had more breathing room and time to strategise and adapt their businesses to a new COVID model.
#2 Save for a Rainy Day
This leads us to our next point, the importance of saving for a rainy day.
It is always tempting to use all your cash reserves. However, it is important to save on a regular basis (when you can) to ensure that you can meet all your future obligations on time and to fund future business plans.
#3 Government Funding and Support
Funding provided by all levels of Government (whether Federal, State or local) were vital for struggling businesses and the community after COVID hit. For example, the JobKeeper scheme helped businesses retain their employees even when their income dried up.
You should be aware of what Government support you may be eligible for and apply for it. This may give you the funding required to overcome your challenges.
Please ensure you are eligible though for the funding as we are seeing increased audit activity by the Government after the funding is granted.
#4 Communicate with Key Stakeholders
During times of hardship, it is important to maintain communication with key stakeholders (this may include suppliers, customers, employees or lenders).
We have assisted our clients during 2020 with:
– Negotiating with lenders over their loans;
– Negotiating improved payment terms/plans with suppliers;
– Providing data to negotiate rent relief with landlords; and
– Entering into new payment arrangements with the ATO.
Poor or the lack of communication may result in actions taken by key stakeholders that are detrimental to your or your business.
#5 Be Adaptable
2020 has required everyone to change their views on what is normal and adapt to the ever changing COVID situation.
Some of our clients had to change their business models to keep their businesses afloat or running by:
– Introduction of new products/services;
– Change the delivery method of their products/services;
– Find a new way to continue work when being in an office was not safe;
– Market and advertise their business in new ways;
– Implement what were long term plans for the business immediately;
– Tap into previously untouched markets; and
– Implement cost savings and efficiencies.
For some, this has opened up new opportunities to improve and grow their business that they didn’t believe were possible.
For us at EMspire, COVID has meant working from home and cancelling in person meetings. Instead of going to see a client,w e are now video conferencing. At first it took some adjustment, however, it has enabled us to find efficiencies and maintain our relationships with our clients. Instead of waiting for all of us to find the right time to meet in person, we were able to quickly resolve queries over a quick phone or video call.
#6 Should have invested in the toilet paper business
Even though there is no proof it can prevent COVID, it was one of the most in demand products flying off the supermarket shelves.
Please note that this information is not specific and is general in nature and cannot be relied on as advice. Please contact us for advice specific to you and your circumstances. The team at EMspire Advisory are experienced accountants, bookkeepers and tax agents in Sydney and would like to help you create, grow and succeed in business.