We work with hundreds of businesses like yours that need access to cash now.
We have compiled some of the best and quickest ways to get cash into your business:
Government and ATO initiatives:
- The Government and ATO have offered help for businesses during these times. If you haven’t already, make sure you tap into all those that apply to you:
- Jobkeeper payment – up to $1,500 per employee per fortnight
- Backing Business Incentive – 50% of the cost of an eligible asset
- Apprentices Subsidy – maximum wage subsidy of $21k from 1 Jan–30 Sep 2020
- Boosting Cash Flow for Employers – between $20k – $100k
- PAYG Instalments – potential to claim a refund for PAYG instalments already paid for the year ended 30 June 2020 (but note that you will have to pay the tax liability at some stage)
- State Based Grant (SA) – $10k emergency grant
- Payroll Tax waivers (SA) – 6 months waivers (or Payroll Tax deferrals for larger businesses)
- GST Deferrals for 6 months
- ATO – Interest free payment arrangements (these can be separately negotiated)
- Additional government concessions may become available as the situation develops so it is important to keep track of announcements.
Talk to your Bank
We have found the banks to have been very responsive and accommodating during these times. Have a discussion with your bank manager. Explain your issues and work with them to arrive at a financing plan to help navigate you through this predicament. This might involve increasing your overdraft, a loan “holiday”, refinancing. Prepare a cashflow and make sure you include any deferrals detailed above (they will eventually have to be repaid!) The important thing to demonstrate is how you are going to trade out of this situation (more about Budgets and Forecasts later).
Reinvigorate your Sales Strategy
- Understand your Contribution Margin and Breakeven point
- How can you change your business model and pricing
- What new trends/patterns/demands are you experiencing (are they permanent or temporary)
- Can you bring projects forward. Offer incentives to secure new business
- Price discounting – might be a good way to retain your team or accelerate cash collection
- The trend to “Buy Local” – how can you make the most of this – we are all part of a community
Keep an eye on your costs
- Reduce your premises costs – There is now a mandatory Code of Conduct for landlords of commercial premises to follow. You can request rent waivers and deferrals if you satisfy certain conditions.
- Human Resources – Can you afford all your staff? Consider the shape of your team and the demand for your product/services in a “new normal” – options might be standing people down, taking leave, redundancies. Balance employment law, mid to long term forecasts and the culture of your business. The first priority is survival but you also need a team that trust you as enter the recovery phase.
- Convert fixed costs to variable costs – Consider outsourcing, contractors or building up flexible “talent pools”. Think about your essential costs. Keep the business lean. Not only will you have a better chance of survival but your business will be in great shape for the future.
Manage your Working Capital
- Keep stock at appropriate levels – not too much and not too little, just right!
- Cash Collection – deal with reputable clients and diversify your risk (don’t put all your eggs in the one basket and if you have to ensure you have instalment payment programs in place to share the risk)
- Ensure your Creditors are not paid before you collect from your Debtors – a simple Debtor and Creditor Day analysis will do the trick!
- Suppliers – negotiate long-term payment plans where possible. Renegotiate other terms if necessary – we are all in this together!
Prepare a Cashflow and a Budget
- With footy season not too far away, we are reminded of why in sporting contests they keep score. You need to keep track of how you are progressing to see if you are winning!
A Cashflow Forecast will help you sleep at night and a Budget will allow you to plan and follow your path to recovery. They are valuable tools in good times and critical tools in these current times! Stay close to them and deliver on the key assumptions that make up the models and you will be a strong chance to survive, recover and ultimately grow.