COVID 19 Survival Assistance for SMEs

Empowering SMEs (Issue 058)

Greetings from ESS BIZTOOLS and our affiliates.  Welcome to this weekly update on issues confronting accountants, business advisors and bookkeepers from the COVID 19 coronavirus.

This week we looked at:

  • Financing your Business
  • Engaging your Accountant to add Value to your Business

In this week’s webinar Ashley Evans, Managing Director, AAA+ Financial Solutions and Consulting made some interesting comments relative to:

  • Financial Pressures
    • Can give signs that you may need help with finances and debt.
    • Late bill payments can be an indication that your debtors are in strife.
    • Legal action for recovery of debts is an important sign that there is financial pressure within a business.
  • How Can Businesses Like AAA+ Financial Solutions and Consulting Help?
    • An understanding of business resilience.
    • Planning for business resilience.
    • Preparation for different scenarios.
  • Benchmarking - Why Is It Important?
    • Helps in the identification of strengths and weaknesses of the business.
    • Every business benefits from a performance comparison against other competitors.
    • Annual benchmarking assists businesses and assists with dealing with banks.
  • Work-Related Stress – What Causes It?
    • Organisational culture.
    • Bad management practices.
    • Job content and demands.
  • Business Planning - Does This Help?
    • Definitely - yes if you are seeking finance.
    • Builds confidence for the business to consider new options.
    • But, just don’t prepare your Business Plan and leave it in a drawer.
  • Internal Business Risks
    • An understanding of the risk will help you to manage finances.
    • Helps in an understanding of debt obligation.
    • Identification of management stability.
  • Top Tips for Successful Business Operations
    • Cash is king.
    • Deferral of payment options have been considered.
    • Financial information up-to-date.
    • Taking advantage of special tax deductions – instant asset right off.
    • Loans available guaranteed by the Federal government or issued by a State government organisation.
    • Talk to your bank and keep them informed of what is happening.
    • Consider debtor finance, if you need extra funds in your business.
    • Communicate with your accountant, not just once a year for a taxation return.

Peter Towers, Managing Director, ESS BIZTOOLS – “Getting Your House In Order Now”.

  • The JobKeeper program has given businesses a window of opportunity until 30th September 2020.
  • The government has made it difficult for any business windup action to be taken until after 30th September 2020.
  • Business operations will probably be very difficult after 30th September – no JobKeeper payments – banks will probably not be in the mood to lend any further money – government grants will probably not be available because governments have spent a lot of money in the current period.
  • Australian Small Business Association unfortunately expects thousands of businesses not to continue.
  • Insolvency practitioners haven’t got much work at present and are laying off staff, but they expect to be very busy from October onwards.
  • My strong recommendation - make your accountant your virtual Chief Financial Officer, because you'll need them to do more than just prepare annual accounts and taxation returns.
  • Now is the time to sit down and consider strategies for your business – refresh your leadership team – commence monthly business review meetings, including your accountant as the Chief Financial Officer – but not for taxation discussions – talk about business matters and how your business can improve.
  • If you think you'll require loan funds later this year, it is probably a good idea to apply for them now.
  • If you're looking for a large amount of money – over $250,000 - consideration should be given to trying to raise capital from the public – you'll have to be a company or have your business transferred into a company.
  • A company can raise up to $2 million in 12 months under Section 708 of the Corporations Act with little formalities, other than the preparation of a Business Plan, Budgets and Cashflow Forecast looking at the next 3 years.
  • It is possible to raise up to $5 million in a 12 month period utilising Crowd Sourced Funding Equity Raising – this method of raising capital has been established especially to assist small businesses and medium-sized enterprises.
  • If you have developed a new product, process or service and your company’s young, you could raise capital utilising “Early Stage Innovation Company” status, which enables some benefits to be utilised by your investors and this might make your company more attractive to them.

Please talk to your accountant about these opportunities and potential problems.  If your accountant is unable to assist you and you'd like introductions to other accountants, who are geared up to supply virtual Chief Financial Officer services to SMEs, please send me an email peter@essbiztools.com.au.

To view this webinar recording (held on 13 May 2020) please click here.

NEXT "COVID-19 Survival Panel" Webinar

The next webinar for small businesses and medium-sized enterprises is on Wednesday, 20th May 2020 at 12-noon AEST with keynote speakers:

  • Paul Barnaby, Predictive Accounting Consultant and Australasian Representative of PlanGuru - “Utilisation of Three-Way Forecasts to Assist your Business Management Team to Understand Where the Business is Headed Through the Utilisation of Budgets, Cashflow Forecasts and Predictive Balance Sheets".
  • Peter Towers, Managing Director, ESS Small Business will supply an update on the next step that businesses should be considering now, relative to emerging from the “Lockdown Blues”.

To register for this free webinar, please (click here).

We would like to invite you to visit the ESS Small Business website - Survival in Difficult Times - Learn More, where you'll find details of the products that ESS Small Business has developed to assist small businesses and medium-sized enterprises to gain a better understanding of strategies which will assist you to emerge from the “Lockdown Blues”.

Want to know more?  You can access the material utilised by Ashley Evans in his presentation in the "Want To Know More" component – please click here.

Stay safe.  If you'd like to have a discussion, please don’t hesitate to contact us.

If you have a friend or a colleague who you think might find this article interesting, please don't hesitate to send it on to them.

Have a great day!

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Episode 58 - COVID 19 Survival Assistance for SMEs

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