The State of the Nation – Advice for SME’s
Alas I do not share Mr Trumps view that by Easter we will all be eating turkey and blueberry pie, with churches filled with happy faces and the star-spangled banner once again blowing proudly in the wind.
But Mr Trump is correct in saying that if we are not careful, the paranoia surrounding the Coronavirus will lead the world into a global recession.
Without wanting to repeat myself, the immediate problem facing SME’s is:
Where is the next $ coming from, and the one after that?
As business leaders we must behave like squirrels. Year after year the humble squirrel gathers enough nuts to see his family through the cold winter months. Here’s a tip, squirrels are not that smart, but in this instance, we could learn a lot from the humble squirrel.
Lock down is coming, the question is, how long will it last? Days, weeks, or months. If it’s only days or a few weeks no need to panic, right? As a leader you can take a couple of days off and get back on deck. No real damage done.
However, if my suspicion proves correct, the aftereffects could last months if not years.
Lesson number 1
Ok times are uncertain, but don’t let your business drift aimlessly. If you have done a budget, that’s great, but you will need to revisit it. Here’s a tip, things will have changed and changed, not only quickly, but also significantly. Re-do the budget using different scenarios, do a worst-case scenario, it’s unlikely to be pretty but it may be realistic. Things are changing rapidly so revisit and remodel regularly.
If you don’t have a budget, don’t use working from home as an opportunity to learn a foreign language or catch up on Netflix.
It may sound dull but do a budget and do one sooner rather than later. Be prepared for the worst-case scenario so you are at least prepared for the inevitable challenges ahead.
Lesson number 2
Replace cash for nuts and gather as much cash as possible. Easier said than done I hear you say. Here are a few suggestions that you may not have thought of:
- Work your current debtors hard, the old saying “the squeaky wheel gets the oil” is never truer than today. Maybe explore using an automated debtor management programme like Chaser. We use Chaser and without a doubt it saves time, but more importantly gets results;
- Maybe consider invoice discounting in the short term. There are several financial institutions that offer this type of facility, many of which we have relationships with, so if you need an introduction please feel free to reach out to us;
- Other types of finance will pay your creditors up front enabling you to repay over an extended period. Again, we have access to several such financiers, so please feel free to reach out to us.
- Take full advantage of the tax breaks offered by the ATO, please refer to our previous correspondence regarding the details or contact our office to discuss.
Lesson number 3
Stay positive, the majority of “good businesses” will survive to fight another day. Do not become isolated or depressed, we are all in this together. The world and the way we do business will be vastly different when we come out the other side. This is a great opportunity to harness new technology and stay connected.
The team at Elderton will continue to provide our clients support and assistance regardless of whether we are in the office or working from home.
If you need any further clarity on any of the matters raised, please do not hesitate in contacting us.
WE ARE HERE TO HELP