You would have been receiving emails from various agencies, companies and politicians setting out issues relating to the steps being taken to deal with Covid 19. There have been an enormous number of posts on social media relating to restaurants, hospitality venues and other businesses that have had to close under the current guidelines. This is a tragedy for businesses which have worked hard for years to build a profitable base only to see it swept away almost overnight. The businesses which have had to close by prescription are in the front line and it is likely that as the economy progressively contracts we will see a second and third wave of business closures. It is very important to face facts dispassionately and make informed decisions.

We hope businesses are aware of the steps that they might be able to take in order to weather the storm and to ensure they are ready to return in some form when we have the crisis dissipates.

We strongly suggest you talk to your accountant, adviser, mentor or someone independent who can take a realistic dispassionate view of your options based on facts, available support packages and the likely reaction of banks, landlords and major creditors. You need to know how the various support packages work before you make decisions on laying off staff or closing premises because, amongst other things, cash handouts may depend on you continuing to employ staff.

You may not have a formal business plan but now you need to be planning for the next week, month and year. We believe that one of the most important metrics at the moment is your break even sales figure.

Break even sales is the dollar amount of sales which gives you a profit of “zero”. That is, you break even. Any less than this amount of revenue and you are making a loss and any more than this amount you are making a profit. Your break even sales covers your fixed costs of a business, plus all of the variable expenses associated with your sales. For most businesses fixed costs are things like rent, some staff costs, power bills etc. Variable costs are some staff costs (eg sales commissions, casual labour costs) and costs of goods sold.

If your sales are currently running below what is needed to cover your fixed bills then you will be making a loss and your bank balance will deplete – eventually, of course, you will go out of business.

It may be very difficult to stem the decline of sales in the current climate but you may be able to temporarily curtail your fixed costs until things start to improve, and the sooner you have a clear focus on your numbers the more likely you are going to be able to take meaningful action.

To begin with, if you have any borrowings, talk to your lenders and see if you can negotiate a moratorium on interest and/or principal repayments and also talk to your landlord about negotiating a rent free period.

These discussions are likely to have a better outcome if you are clear about your numbers and can present reasonable figures if asked. It may also be worth talking to the ATO regarding any debts you may be servicing with them.

Looking at your sales, you may be able to pivot and find other ways to deliver goods and/or services. For example, restaurants are turning to take-aways and delivery (what about a paid online session with the chef on cooking your favourite items on their menu) trainers and consultants are dropping face to face sessions and using online meeting software such as Zoom, Skype and Google Hangouts.

Business owners need to brainstorm ways in which you can use the resources you have to provide other revenue streams in creative ways.

These are some of the components of your survival plan and without a plan to manage your way through this crisis you may find, increasingly, that decisions are taken out of your hands. Your plan will need to be dynamic. The landscape has changed (and is likely to go on changing) so rapidly that you will need to revisit parts of your plan almost daily and make adjustments based on changed circumstances.

If you need help finding your break even point or help putting a short-term plan together, talk to your financial adviser or accountant in the first instance. You can also email the Chamber ( and we will organise a free online session for you to look at the basics.

If you need help approaching your major creditors you can also email us and we will find an appropriate person to provide reasonable help at no cost to you. We will be summarising the various support packages available to business and will let you know when that is available – in the meantime there are excellent resources at Small Business Development Corporation

Ken Wyatt

The Treasury  showing support for businesses, individuals and supporting the flow of credit.

We will also be introducing to you a member of the Chamber who specialises in Human Resources and has offered a free 30 minute consultation to members.

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