Financial resilience tips to help your business navigate COVID-19.
Financial resilience tips to help businesses with their planning to navigate COVID-19.
It’s an understatement to say that COVID-19 has generated significant uncertainty for businesses and their customers. The pandemic is the textbook definition of VUCA – volatility, uncertainty, complexity, and ambiguity.
To fightback and survive in these VUCA times, support is available. Help for business owners impacted by COVID-19 includes grants, loans, financial assistance, and wellbeing support:
Government support for small businesses.
A range of help is available at a federal and state government level for businesses impact by COVID-19.
- Learn more about financial assistance for businesses from the Federal and State Government here.
- Access a low interest rate small business loan through the Federal Government’s SME Recovery Loans. Find out more here.
Banking support for businesses.
Banks, including Westpac, are offering COVID business support and financial assistance to eligible customers, whose revenue has been impacted by the latest lockdowns.
Find out more about:
- Westpac’s help for business customers here.
- Westpac’s Business Recovery Loans, under the Federal Government’s SME Recovery Loan Scheme here.
Small Business Debt Helpline.
The Small Business Debt Helpline is a free service that offers support for small business owners in financial difficulty. The service is free, independent, and confidential. The Small Business Debt Helpline has a team of qualified financial counsellors who can answer business owners’ questions and provide guidance to help get businesses back on track. Call the Small Business Debt Helpline on 1800 413 828.
Discover mental health and wellbeing support for your business.
As a business owner, you may have experienced that running your business can be stressful. COVID-19 has affected all businesses, and this may have led to mental health challenges for you and your team. There are resources available to help you to create a mentally safe workplace:
- Find mental health help from the government here.
- Find mental health tips to look after yourself as a small business owner here.
In VUCA times, we’re in uncharted territory, and even the most seasoned business owner is unlikely to feel comfortable. Many small businesses have been impacted because they don’t have the cash reserves and borrowing powers to sustain their operations and in some cases their business models are not designed to generate monthly recurring revenues.
One thing is certain for Australian business owners, those that respond and adapt to the crisis are more likely to have confidence that they’ll be able to serve their customers in the next normal, a post-COVID world, and continue to offer employment opportunities for their staff. Having a plan in place can be an effective way to help your organisation do just that – even when you don’t know what the future may hold. Each businesses plan will need to be tailored to their own circumstances. Factors to consider when formulating your plan for include:
Know your numbers and plan accordingly.
Business continuity is at the heart of financial resilience. It helps to first have an up-to-date understanding of your financial position. By keeping track of your bank balance and cash flow, you’ll be able to understand changes may be required and by how much you’ll need to reduce your discretionary expenses to pay bills and stay afloat.
When it comes to reviewing your business expenses, if you can’t answer yes to the following questions around your business expenses, then you may need to consider cutting it.
- Is this expense helping me get more customers?
- Is this expense helping me retain my existing customers?
As for help with your personal expenses consider these handy money saving tips available here.
Effects of loss of business or lower customer demand.
As consumer spending reduced with the impact of lockdown, it may have led to revenue declines for some SMEs. This may, in turn, put pressure on liquidity (the ability to cover its short-term financial obligations or the ease with which the assets can be converted to cash) for these businesses. Lower demand results in lower need for staffing, causes increases in unemployment or temporary standing down of employees, which in turn further lowers the purchasing capacity of consumers.
As cash flow is critical in times of crisis, a limited reserve may make SMEs more susceptible to financial devastation. If this is a situation your business is facing, a focus on tactical cash flow management is the best place to start. These tactics may include cutting costs, seeking to improve margins, and releasing cash from working capital to stabilise your business as fast as possible.
Managing the effects of supply chain disruption.
A situation that you may face into as a business owner could be a scenario where your customers have ordered goods, and due to supply-side issues (be it availability or shortage of raw materials or other goods and parts) your business is no longer able to supply.
If this occurs, in most cases, your business will be required to provide a full refund. You will be able to retain payment for goods or services already provided. If the fault is with a supplier, the business may be entitled to a reimbursement under a contract with that supplier.
A vital and sometimes underestimated tool that is available to all businesses is good communication. Whether you’re a business deep in the supply chain that serves other businesses, a manufacturer, or a service provider, communication with all stakeholders is vital.
Communication can reassure people that your business will continue – or, if you can no longer work due to COVID-19 government restrictions, it can provide clarity to the people who need it the most. Employees, stakeholders, and customers understand that this is a challenging time - three things to focus on in your communications to them are:
- Be values orientated. Ensure your business’ values, are enacted, and communicated.
- Be transparent. Try being open and sincere about how these decisions make your business feel.
- Keep communicating. Provide updates on how your business is handling the situation and any major changes that they should be aware of. Try to use all communication platforms, where possible, to ensure your message is received. Social media can offer a low-cost, visible, and shareable way to communicate with stakeholders.
Doing these things consistently and well can not only help now but also lead to maintaining and improving relationships in the long run.
Also, recognise the benefits that two-way communication can have. By listening to your employees, suppliers, and customers you may find ways to improve your business's position at this time.
Lifting digital capability and adoption.
The pandemic has made it an imperative for SMEs to actively engage with digital technology to adapt to changed conditions. Over the next decade, the Australian Government will focus on lifting digital capability and adoption across the economy to support new ways to work and do business, increasing profitability and saving time. For tailored advice for your small business, find out more about Digital Solutions – Australian Small Business Advisory Services program.
COVID-19 Help for business customers.
Find out more about Westpac’s support for our small business customers during the COVID-19 pandemic here.
This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness for the information to your own circumstances and, if necessary, seek appropriate professional advice.
© Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.