There are just 100 days until JobKeeper ends and national insolvency solutions firm Jirsch Sutherland asks if it’s time for SME owners and directors to ask the hard questions and plan for the future.

The Australian Bureau of Statistics (ABS) has reported that 72% of businesses have taken a revenue hit as a result of the COVID-19 pandemic, while 73% of businesses have accessed support measures including wage subsidies, renegotiated rent/lease and deferred loan repayments.

“The JobKeeper safety net is being removed in three months – not to mention other stimulus initiatives and forbearance measures ending soon – and that means business owners should be getting on the front foot now to survive,” Jirsch Sutherland partner Andrew Spring says

“As a business owner, you know your strengths and abilities well, but you should also know when to call on the expertise of others.”

He says that people need to be proactive about assessing the economic impact on their business and changes needed to get back on the right course.

“That includes getting your accounts in order, meeting taxation and superannuation obligations and, if necessary, seeking professional help from a qualified adviser,” he says.

Jirsch Sutherland partner Andrew Spring

Eight questions for business owners to ask themselves now are:

1. Cash flow: What is my cash-flow situation like now and what will it be like after stimulus ends?
2. Revenue streams: Will my revenue streams recover and are there opportunities for new streams?
3. Staff: Can I afford to keep staff on post-JobKeeper?
4. Deferred liabilities: Can I meet deferred payments? (e.g. rent, mortgage)
5. Tax obligations: Do I have the money to pay tax when it falls due?
6. Superannuation Guarantee: Do I have enough money to meet the next superannuation payment?
7. Worn out/no mojo: Do I want to hang on or have I lost my passion for the business?
8. Personal guarantees: Are my personal assets at risk? (e.g. personal savings, house, car)

“It’s crucial to understand that personal guarantees don’t fall away under the COVID-19 stimulus or deferral measures,” Andrew explains.

“Business owners should be aware of ‘sleeping personal guarantees’ that will awaken later – e.g. leases, make-goods, trade credit applications, finance, credit card debts etc. Any debt deferral decision may exacerbate liabilities, which could put personal assets at greater risk if the business is ultimately unable to meet the liability.”

Jirsch Sutherland provides ten tips to prepare for the post-stimulus environment:

1. Plan: Plan for the current conditions, the immediate post-stimulus environment, and for the longer term. Ensure you have a contingency plan should the economy be hit by a second coronavirus outbreak and continue to revisit your plan to ensure it remains relevant to your business and the market.
2. Calculate: Assess your current and projected cash-flow.
3. Assess staffing needs: If your business has experienced change, it’s essential to reassess your staffing needs.
4. Reduce costs: Where possible, cut costs to minimise further impact on your cash-flow.
5. Communicate: With your staff, customers, suppliers and creditors.
6. Renegotiate rent/lease terms: If you will struggle to pay your rent, speak with your landlord now and renegotiate existing arrangements.
7. Funding: Engage with your bank/lender to discuss funding needs or repayments/interest rate relief or seek alternative finance.
8. Give yourself breathing space: The Safe Harbour and Voluntary Administration regimes are designed to provide companies and their directors with breathing space and can secure leniency from creditors, buying you time to ‘right the ship’.
9. Reinvent yourself: Prepare for the ‘new dawn’ – whether it’s restructuring your business or restarting with a new model, strategy or market post COVID-19.
10. Put your hand up: If your mental health is being impacted by the current financial stresses or the need to let staff go, speak with a trusted adviser or contact Beyond Blue or another mental health organisation.