During the global financial crisis we had some warning, we saw news reports where people wearing suits will walking out of investment banks on Wall Street carrying their box file that represented their personal items from the desk.

Slowly over a period of time we slipped into the global financial crisis and many businesses had a chance to make adjustments to survive. Of course others failed because they were in a market that was fragile but we had some knowledge of what was coming over the coming months.

The coronavirus is a Pearl Harbor.

Over Christmas we were watching where one city in China had some sort of problem with the virus but we didn’t think it would end up here because of our experience with SARS which was more isolated to Asia, but suddenly like the Pearl Harbor attack our business life has changed and been affected in such a dramatic way in a matter of weeks.

Here are seven things you should stop doing

One –

Standing out in the open thinking it’s not really happening, or it won’t last long or that we will be back to normal soon

Like in a bombing raid you should take shelter, and you should shelter your business. Start doing things that save you money, start doing things that harbour your cash flow – take shelter by arranging for finance holidays with your lenders, start thinking about negotiating with your landlord and make decisions about staff and cost levels now.

Two –

Spending in the business and your personal life the way you use to.

Clearly things have desperately changed in the first thing you need is to have your personal budget in place. You need to re-examine every dollar that leaves your business your new plan is to make “a prisoner of every dollar”. Making sure that your business spending and examination of every expense is considered carefully.

Three – Thinking the government stimulus package will save your business

There is a misconception that the stimulus package with its various aspects including jobkeeper is a small business bailout. It’s a way of keeping jobs in place for businesses and the real benefit comes for businesses with PAYG through BAS.

You cannot rely wholly on the government package, and for many businesses it’s too late anyway – you must run your business as if you weren’t going to get anything from the government and make all decisions based on this. In

Four – ignoring your accounts and knowing absolutely everything that is going on in your business

So many business owners have operated on the basis that if there is money in the bank things are all right. Having accounts up-to-date and understanding them or having them explain to you and how to use them becomes essential because unless your business can produce a profit or you understand your accounts enough to know what costs you need to keep cutting both in operating and in your balance sheet (balance sheet refers to those capital expenses where you are paying principal, or we you store your tax debt) then you are missing the opportunity to calculate how much money you can harbour to survive or rebirth your business.

Five – not making those hard decisions now

You don’t have time to hesitate.

You don’t have time to be a soft boss. That doesn’t mean you can’t be polite and graceful. But for your business to survive you may need to let people go who are part of a great team and this must be done honestly and quickly.

You must consider assets that you don’t really need and think about saying goodbye to them.

Now is not the time to dillydallying or stand in the open when you’re under attack.

Six – No dumb, stupid loans! (And leave your superannuation alone unless you really need it)
After the banking Royal Commission the market is awash with extremely high – supposedly – unsecured loans for business owners. These loans take their payments daily or weekly and rip the guts from your cash flow. Do not, if your business is in trouble take additional loans out.
We would rather see you tough it out, now that you can get finance holidays for six months, have an ability to stay on your premises without being thrown out by your landlord for six months and a whole lot of other options rather than borrow money from the toe cutters. Their interest rates are never what they appear and they will break you if they can.

Seven – Non lodgement of BAS and SGC.

Right now, the Australian Taxation Office
Make sure you are compliant – you are better to lodge even if you can’t pay, than not lodge because you don’t have the money.

There is an idea that many business owners have that if they don’t lodge their BAS and Super, the ATO won’t know about their debt and chase them. It is actually the reverse, non-lodgement can start to move the liability from the company to the director.

And if that wasn’t enough here are 3 extra

Extra Two – Signing any more personal guarantees
Personal guarantees and compliance debt that creates personal liability.

Business is going to be tough enough without taking on any personal guarantees. Especially if those guarantees relate to your personal assets such as your family home. You may take credit and there are liabilities in this but don’t duplicate the problem by giving personal guarantees unless you have thought it through all sought advice.


Extra Three- Don’t be dumb when dealing with personal assets.
This is the time to actually think about your personal assets, such as a family home and make enquiries as to the protection of the equity or some of the equity especially if your business has been really hammered in the last few weeks. It’s not a time to pledge your equity with stupid loans either.

Extra One – Drawing money from your business – (take a salary instead.)
Loan accounts – drawings, division 7A or borrowing money from your company
 – “Mate, I just take the money and my accountant does my tax return each year” 
if that you then that has to change. You need to be on a salary that covers just your needs so the business doesn’t have to worry about you constantly dipping in and dipping out with the money.
Get some clarity, take action and start getting control back in your life and business.

The Your Business Angels toward Safe Harbour offers you the support you need to get through these troubled times giving you the strategy is that will make all the difference now and into the future.