Updated: Jun 17, 2020
https://www.businessagility.net.au/webinar-rebuild-your-businessThis is the first article in a series about how to rebuild your business after COVID-19. This article will focus primarily on the financial aspects of your business.
As we all undoubtedly aware, COVID-19 has wreaked financial havoc on businesses around the globe, leaving many businesses struggling in its wake. As published in one of our recent blogs, according to the Australian Bureau of Statistics (ABS), 72% of Australian businesses had less income; and 73% accessed support measures as a result of the impacts of COVID-19.
While the short-term outlook varies greatly for businesses depending on industry, given that most Australian states are now reducing government restrictions on businesses, now is the time to review, assess, plan and pivot your business so that you can rebuild and thrive post COVID-19.
In a recent blog, we shared the Western Australian Government's advice that a number of businesses could reopen from 6 June 2020 with the implementation of Phase 3 of the WA Government's COVID-19 Roadmap.
Now is the time to consider what you need to do to rebuild your business and get it back on track. The world that we once knew before COVID no longer exists. It's changed. We now have the 'new normal.' The smart business owners have already begun adjusting their products, services, marketing, advertising and financial arrangements to position their businesses to thrive in the new post COVID world. Have you made the necessary adjustments?
Here's how to rebuild your business post COVID-19:
Review Your Business Financials
The financial health of your business is fundamental to determining the way forward. You will need to determine how significantly your business has been affected - either positively or negatively, before you can determine what other actions you will take.
If you have not already reviewed your core financial statements (ie: statement of cashflows; profit & loss and balance sheet), now is the time to get this done so that you can assess your current position and start planning your rebuild. When conducting a financial assessment, it is helpful to compare to the previous year(s), or to another previous period to determine whether your business is up or down on the comparative period. Given that COVID is an extraordinary event, it may be challenging to find a comparable period, so you will need to use your judgement when looking for reasonable baseline measures to compare against.
It's also important to look forward, so if you haven't already updated your core financial statements with a view to the future, then you should also be doing this now. For many businesses, we are about to finish the financial year and start a new one.
What better time is there to prepare your new financial year's P&L budget, especially given how much things have changed? Embarking into the new financial year with your old budget and financials, given everything that has changed, is a recipe for disaster. Remember the old saying: "if you fail to plan, you plan to fail. So get proactive and get reviewing. Help is available (keep reading).
With many businesses now able to reopen (albeit with some constraints still in place), smart business owners should be recalibrating their menus and services pricing on the basis of the current Phase 3 COVID-19 one person per 2 square metres rule. Do you know whether you should be opening and whether you will make a profit if you do? How can you re-open profitably? As a business owner, you need to know the answer to these questions.
Business Agility is offering small business owners support in this area, with the 'Menu / Services Pricing Review' package, which will answer these questions and help you to achieve your target gross profit by revising input costs and recommending updated pricing.
Next 3 Months:
With COVID restrictions relaxing, the next three months will be crucial for many businesses. Business Agility has created a cost effective solution to update your financial records, point of sale systems (POS) and provide a financial view of the next three months.
The 'Update POS & Next Quarter Financials' package includes:
Free initial consultation
review impact of 1 person per square meter rule
review inventory, debtors, creditors, payroll
create cashflow forecast for next quarter
plan HR adjustments if necessary
review, update & prepare POS for reopening.
Next Financial Year:
As mentioned above, the world has changed - we now have the 'new normal.' Given these changes, smart business owners are entering the new financial year prepared with a full review of expected sales, costs, and profits. This is critical for your business rebuilding plan. You will need to also consider some of the other ways your business has been effected, and how this flows through to your financials in the new financial year.
For example, your marketing and advertising budget needs to be reviewed due to the changes in consumer behaviour like the significant shift towards online shopping. Additionally, if you were one of the 53% of Australian businesses that had to unfortunately reduce staffing (hours worked by staff), then this also needs to be reflected in your financials.
Business Agility are also offering another cost-effective small business package: 'Business Financials Review & Update,' which includes:
FREE initial consultation
2020 / 2021 Profit & Loss Budget (full 12 months)
2020 / 2021 Balance Sheet
2020 / 2021 Cashflow Forecast (full 12 months)
2 x 60 minute financial coaching consultations.
Get Support & Connect with Other Small Businesses
We need to remember that we are all in this together and these are extraordinary times. Knowing how to pivot and adjust so that your business can thrive is critical. Many small businesses are in desperate need of quality support and advice, but one-to-one business coaching can be out of reach for many financially at the moment.