Almost all businesses are trying to keep going as long as they can and manufacturing their product in hopes that the industry is ultimately going to pick up again.
In order to survive and avoid bankruptcy, there are several things small businesses can do, let’s check it out!
1. Collect any outstanding cash
On the flip side, reach out to those who owe you money and collect. You can also ask customers for prepayment of future activity and offer a discount if they pay it.
2. Renegotiate contracts
Review your accounts payable. Gather all your vendor contracts, prioritize them, and then start negotiating. Things like reduced payments or extended terms. While some may not agree, some will. You can also work with your landlord to try to forgo rent payments for a set amount of time.
3. Tax-free programs by Government
Since 12 March 2020, the Australian Government has announced several stimulus and relief packages, designed to sustain small businesses through the coronavirus (COVID-19) pandemic and keep employees in work. Such as:
Not-for-profits and small businesses with a turnover under $50 million will receive a tax-free cash payment of $20,000 up to $100,000 to help them retain staff and continue operating.
Eligible entities will receive an additional payment equal to the total of all of the ‘boosting cash flow for employers’ payments received.
The Government expects 690,000 businesses employing 7.8 million people and 30,000 not-for-profits will be eligible for measures in the stimulus package.
Besides that, The Australian Banking Association has announced new loan deferral arrangements for small businesses affected by a coronavirus.
4. Increase efficiency
Do as much work as is viable with the least amount of people. Right now you’ll be better off working longer hours with a smaller group than less hours with a larger group.
You can also increase efficiency by working online. Because of technology growing so fast, and now businesses have been forced to move to online platforms, but it has helped keep productivity high.
5. Reduce staff cost
As painful as it is, you have to reduce your staff as much as possible, either through layoffs or furloughs, to make sure you handle it with care. For those who remain in your employ, make across-the-board “significant” pay cuts.
6. Monitor all purchase
Make sure all transactions require your personal signature approvals, no matter the size so that only the owner can approve any payment. In this way, nothing will be spent that you don’t know.
In the end, you should note the critical thing is to make sure that you can reduce expenses, reduce the cash outflows, working more efficiently. If you need more cash to keep your small business survive without hassle and fast.
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