Business guide to Coronavirus

How to stay in the black with COVID-19

Non-employing businesses are being tested on how to stay in business whilst navigating coronavirus. You are not alone, there is support available.

Non-employing businesses that haven’t already closed are under pressure to stay in the black despite managing equipment costs, shop fronts and reduced cash flow, as customers disappear into isolation as well as other non-essential business customers temporarily closing.

There is a lot of support available on how to reduce retail leasing costs during this time.

Government business support

Australian banks will defer loan repayments for small businesses affected by COVID-19 for six months and the Australian Government is offering sole traders that do not employ any staff the following support:

  • Increased instant asset write-off: asset write-off has been increased from $30,000 to $150,000 and expanded access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million).
  • Backing business investment (BBI): this a time limited 15-month investment incentive to support business investment and economic growth short term by accelerating depreciation deductions
  • Increased and accelerated income support: this initiative is expanding eligibility to income support payments and establishing a new, timelimited Coronavirus supplement.
  • Assistance for affected regions, communities and industries: an initial $1 billion in support has been committed to aid industries and regions severely affected by the economic impacts of coronavirus.
  • SME guarantee scheme: designed to provide businesses with funding to meet immediate cash flow needs, by further enhancing lenders’ willingness and ability to provide credit.
  • Early access to superannuation: access up to $10,000 of your superannuation in 2019-20 and the same amount in 2020-21.
  • Tax support: the Australian Tax Office (ATO) is providing relief for some tax obligations for businesses affected by the outbreak, on a case-by-case basis.

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*Based on 958 meters switched between 1 July 2019 to 3 April 2020

10-step plan for retail sole traders

Phillip Chapman, Director of Lease1, has a 10-step plan of attack for retail sole traders:

1. Review trading hours and create a saving plan (landlords are already advising they will be flexible here).

2. Negotiate with bankers to defer loan payments.

3. Negotiate on equipment leases, seek to defer.

4. Negotiate suitable payment terms with suppliers and even defer part or all payments for a period.

5. Review and remove all non-essential operating costs, for example storage.

6. Defer capital expenditure on equipment, shop refurbishments, and channel funds into the operating costs plan.

7. Compare numbers on customer counts, sales, gross profit and profit and loss (P&L) reports for the same weekly or monthly period this year to last year.

8. Lease review for savings areas such as waiving of annual rent reviews, reduction in security or bank guarantee to free up capital.

9. Create a revised sales and cash flow projection to the end of this calendar year making assumptions based on the above savings.

10. Make an appointment to sit down with your landlord and discuss where they fit into the plan. This may be through rent abatement, deferring rent, extending lease term or a combination of these.

The quicker these options can be reviewed and accessed for non-employing businesses could mean the difference between staying open or closing. 

Business Australia is on hand with a range of resources to help sole traders and non-employing businesses navigate this difficult time, with practical advice and information to help businesses develop strategies to maintain and sustain. Visit our resource hub to find out more.

Siobhann Provost

Senior Writer, Business Australia

Siobhann has over 18 years human resources business partnering experience in large organisations. She more recently established and led a people advice team of senior workplace advisors before moving into content writing.