Small Business Bookkeeping. Cotchy Bookkeeping and Accounting

Small businesses need to start getting prepared to open their doors again

Lockdown is set to end very soon, and we are excited to get back into the shops, restaurants, and have friends and family back in our homes. But for small businesses, there are many things you need to keep in mind as you get ready to open the doors.

Clearly, the type of industry you are in will impact the preparations you need to make. Some businesses won’t encounter any real changes as many have worked online during the lockdown, but for industries such as retail, hospitality, fitness and health, the way you previously ran your business may need to change particularly when it comes to working capital, payroll and cashflow.

Working capital

For businesses getting ready to reopen, the key is access to working capital – meaning, having cash ready to fund the running of your business, especially if your business was amongst those industries that had to dispose of perishables back in June and are now starting from scratch again.

If you don’t have the luxury of a comfortable sum of cash to cushion your business in times like this, what are your options for working capital? If you were able to save some of the Jobsaver relief payments, those could help you out, but for most this has likely gone into expenses such as rent and payroll. You may be able to access a line of credit from your bank or an overdraft could be the ideal option for times like this. Otherwise, you may be thinking about utilising credit cards, which is not a great choice and is best to avoid.

Another option is gaining access to other types of loans like the SME Recovery Loan scheme. This is where the Federal government underwrites the loans offered by established lenders such as the big four banks, and other mainstream lenders. Although, while the risk for the lender is mitigated, they continue to make applicants jump through many hoops to work out if they qualify, so it this may not be an easy or quick process. There are other lenders in the Fintech space who have a more straightforward application process and are targeted to assist small business.

Team

While the borders are still shut both between our states and internationally, we have a reduced amount of people available to fill vacant jobs. This has been noticed mostly in the hospitality industry.

Some businesses had to let people go and now they are moving around. You need to ask yourself; how will I attract and retain a team to help run the business? You might need to pay new staff a higher wage or salary than before. When you do have a fully trained team back in place, then you need to plan for when you pay them. When will be your next pay cycle? It might be worth looking at when you would have usually paid people and see if you can possibly change that slightly to later in the week, to make sure you will have the funds from your sales to pay them.

Compliance

All businesses now need to have a COVID-safe plan in place and need to keep on top of all current updates and changes. Make sure that you and your staff fully understand your obligations under the new rules – which staff member will be checking that your customers are fully vaccinated before they enter your premises? What is your plan if a customer declines to leave if asked?

Cashflow

We have now completed the September quarter and that means that the quarterly BAS is due at the end of October. Forecasting your cashflow will help you to capture these items which are coming up. Making sure that you know what you will have to pay is half the battle.

As you plan to reopen, have you thought about how you could maximise your cashflow within the rules? This could simply be limiting customers to a shorter two-hour booking so you can turn your tables over quicker. Perhaps making a payment plan with the ATO could be an option for you to meet your payments? If you don’t have a plan already, it’s important to consider organising one as it’s a good way of managing your business through tough times.

If you have any queries regarding any of the above information please feel free to email us at: support@cotchy.io.

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