After Australia’s 30 years of growth, the economic pains from the pandemic have arguably hit small businesses the hardest. This isn’t just a problem for the millions of people who run these small businesses—it’s a problem for our wider economy, which is powered by local businesses.

That’s why so many individuals, organisations and policymakers have been looking for ways to help small businesses through the crisis. But with some programs ending in September, and with interest accruing, small businesses need to know how to get help now and what they need to do after the assistance comes to an end.

As part of our Idea Exchange 2020 masterclasses, Unpacking the Government Assistance Programs looked at these exact issues, featuring speakers who have first-hand experience in running and supporting small businesses:

• Kate Carnell, the inaugural Australian Small Business and Family Enterprise Ombudsman (ASBFEO)
• David Koch, TV presenter and Chairman of Pinstripe Media

Their discussion and Q&A session included a variety of practical advice—along with a bit of commiseration—but there were five key takeaways.

Know what help is available

There’s been a heavy focus on JobKeeper but there are numerous measures at both a state and federal level, including assistance for payroll tax or utilities and grants to help with cash flow. The key is to know all the levers available to you based on your location, industry or business circumstances.

David recommended starting with your bookkeeper or accountant, although there are also free resources available to business owners who manage those operations on their own.

“The assistance is different across states and territories, with different eligibility criteria,” explained Kate. “So what you can do is go to your state’s website, where you’ll find a lot of helpful info. Or, if you just want one location, you can use our website as a starting point.”

Many states and territories have worked to make relevant paperwork far simpler and more user-friendly after bushfire-related assistance revealed that some forms were, as Kate put it, “just beyond mortal man or woman to fill in.”

“If all else fails, ring my office and we'll help you. We'd love to translate government documents into normal-speak!”

Have conversations early

Understanding what help is available can also depend on how early you involve other parties. And, even more importantly, that early engagement can make the difference in whether those parties can help at all. Both David and Kate recommended having conversations ASAP with:

• Banks
• Landlords
• The Australian Taxation Office (ATO), and
• Customers

David stressed the importance of making sure customers and clients understand the invoicing procedure right from the start, which can be a challenge for small business owners who just want to dive into the work and may not want to talk invoicing right away. “The importance of cash flow means we have to be more fastidious in this area,” he said.

“Once you have that conversation early, then it sets up a relationship that will help avoid late payments or at least make it much easier to chase them.”

Kate also explained how, with tax time approaching, the ATO is working with small businesses. “If you just go and talk to the ATO, they're more than willing to enter into a payment plan. But you need to do it—if you don't, the problem for them is that it becomes much harder to tell the difference between somebody who's got a real reason for not paying and the people who don’t.”

Plan, plan, and plan again

Though there are a lot of options for help, Kate and David stressed that it’s critical to be cautious and plan ahead. Solutions like deferred bank loans or rental payments might be necessary to save a business but they’re often just temporary solutions.

“It’s really important to get a proper cash flow plan in place now because all of these things will come together and you’ll have to start paying them at some point,” said Kate. “And revenue may not be back to what it was prior to COVID by then. Hopefully it will. But you can’t bank on that.”

David himself had already turned to the ATO about relief for his small business but is planning around the delays they granted. “I've set up a separate bank account so I don't use it in my current cash flow, ensuring it's there for when September comes.”

When asked whether payments suspended due to COVID-19 would impact their credit history, Kate reassured listeners that this shouldn’t happen and to contact either her office or the Small Business Commissioner’s office if they suspected it had.

Still, though, she urged everyone to remember that nothing is simply “on hold” and that interest will be accruing.

Go digital to improve your cashflow

In the immediate response to COVID-19, many small businesses made incredible digital shifts. And many of those shifts are unlikely to go away in a post-pandemic landscape.

“You’ve got to have a level of digitisation—your website, your use of social media. These aren’t extras, they’re now absolutely fundamental,” Kate said. But that digitisation doesn’t just apply to marketing or sales. Small businesses should also be looking to digitise their entire operation and the manual admin that eats into the time and resources currently in short supply. Going back to the issue of cash flow, Kate explained that electronic invoicing can make an enormous difference.

“Talk to your software provider about it, because something like 30% of delays tend to happen because an invoice has landed in the wrong tray or inbox. That doesn’t happen with electronic invoicing.” She also pointed to low-cost apps for tasks like scheduling staff or rosters for stock control. 

“So many small businesses have already stepped up. I think the most successful will be those who incorporate these sorts of changes into their operations going forward, making them even stronger businesses than before.”

Business health depends on literal health

The pandemic has underscored the preciousness of health—physical or otherwise. But, for the small business owner who has a singular focus on their enterprise, David and Kate wanted them to know that health is also a business imperative. As David put it, “You are the most important asset and investment in your business."

With David a current small business owner and Kate a former small business owner, they discussed how emotionally devastating it can be to make decisions that impact your staff. That makes it easy to focus solely on employees and customers, who are of course vital, but David noted that owners ultimately drive the business.

As a starting point, they directed listeners to the My Business Health website, which doesn’t just cover business or financial health, but also provides tools to look after the mental, emotional and physical health of small business owners and their staff.

According to Kate, “Not much point in doing the cashflow stuff but finding that your health is not up to it as we come out of this crisis.”

To watch the replay of the masterclass, click here.