Is your business ready for life post Job Keeper?
Job keeper has been a lifeline for many businesses affected by the pandemic, but in less than a week it will come to an end!
Job Keeper has been a life saver for many small businesses…
Job keeper was designed to help businesses that were negatively impacted by COVID 19 to prevent business closures and job losses. The Australian Bureau of Statistics (ABS) reported that 72 per cent of businesses have taken a revenue hit as a result of COVID-19. Job Keeper provided many businesses the vital cash flow they needed to help cover operational costs, to retain employees and ride out the lockdown periods. It has helped us as a nation avoid a serious immediate economic fallout.
What Lies Ahead?
While the current economic indicators seem positive, there are still uncertain times ahead.
In Queensland alone, $83 million dollars a week of support to 172,000 workers will come to an end. It is not just the withdrawal of government stimulus that is of concern. There are other important factors to consider too:
- the tightening of the ATO’s stance on PAYG tax deferrals,
- the end of bank loan interest pauses,
- the end of state payroll tax and land tax concessions,
- the end of temporary relief measures for statutory demands,
- the end of rental relief measures; and
- the end of the temporary suspension of insolvency trading laws.
The impact of those factors has not been predicted however nearly one in three small businesses (29%) (Sensis Survey) say that when the Federal Government’s JobKeeper program finishes it will have a major impact on their business. Most of those businesses are now without the resources to weather ‘bumps in the road’ having exhausted their cash resources since the pandemic commenced.
As a business owner, the first question you need to consider is, will your business be able to keep its head above water post-stimulus? If the answer is no or not sure or maybe, then it’s vital to seek out qualified advice as soon as possible. The sooner business owners ask for help the more opportunity there is available to help save the business or alternatively minimise the collateral damage to others.
Some questions to help you prepare
If you are still receiving government support and are concerned, there is still time to start preparing your business for a successful transition to a post-Job Keeper environment.
- Cash flow is more important than ever –forecast your cash flow for the next quarter with a few scenarios including a worst-case
- Consider your revenue streams are they set to recover and are there opportunities for new streams?
- Invoices: Are you concerned about non-payment or delayed payment from any of your customers?
- Can you afford to keep all staff on post-Job Keeper?
- Deferred liabilities: Can you meet scheduled deferred payments like rent and bank facilities?
- Tax obligations and Superannuation Guarantee: Will you have enough cash to pay tax and your next superannuation payments when they fall due? Have you tried to negotiate a repayment arrangement?
- Cut back on unnecessary costs
- Consider different funding options to ease pressure
If after reading the above, you feel concerned please reach out to get support, it might save your business and it will definitely help with your stress.