Review your financing arrangements
Insufficient capital and cash flow can quickly derail small businesses when they hit a slow patch. Being able to access the finance you need to carry on and take advantage of new opportunities may mean the difference between sinking and swimming in the uncertain months to come.
If trade has been picking up of late, you could be well placed to secure additional credit, or to refinance your existing arrangements. “It may be wise to get on the front foot and secure as much access to cash as you possibly can,” Hood says. “You don’t necessarily have to use it but you know it’s there if you need it.”
Approval is more likely to be forthcoming if your accounts are up to date. Institutions may be reluctant to lend on 2019 figures and being able to show the impact COVID-19 has had on your business may help an application get over the line.
“The banks are giving extremely good rates at the moment and it could be possible to increase your loan facility by an extra $50,000 or $100,000,” Hood says.
Keep costs down
Many businesses went on a cost-cutting mission back in March when shutdown measures were announced. Continuing to run as lean as possible, and salting away whatever cash you can while you still have the support of JobKeeper, will put you in a stronger financial position when the scheme ends.
“The biggest risk to businesses is what happens next and no-one knows what that will be,” Hood points out. “We’re encouraging people to keep as much cash as possible aside, so they have a bit of a war chest to help them weather a potential second wave.”
Talk to your trusted advisers
These days, things can change quickly and government announcements could have a significant impact on your strategy and direction. That’s why it makes sense to stay in close touch with your trusted advisers such as your accountant, financial planner and lawyer.
“As events unfold, business owners need to question what they’re doing and how events might play out,” Hood says. “Bouncing your plans off one or two different advisers can help you make sure you’ve thought of everything and are making good decisions for your business.”
After JobKeeper ends, businesses will likely be back to fending for themselves in what’s expected to be a challenging economic environment. Strengthening your position now will give you a better chance of surviving and thriving when that time comes.