“Business Hibernation” – How can this help your small business?
Every crisis has its hidden opportunities and “Business Hibernation” is one of them. Because the recent shut down affected big numbers of small businesses the power that big companies (like landlords, banks or energy providers) usually have over the smaller players has now shifted around. There is nothing that they can do until we are getting out of this on the other side. On top of that it is in their best interest that you are staying alive until then. That means you now actually have the power to tell them what payments you can make until you can open shop again.
What are the steps?
First you need to separate yourself from your business!
If your business doesn’t have any income this does not mean you have no income. You, as the business owner, have to get your personal money inflow sorted to survive and there is a lot of help on offer:
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- Apply for Job Seeker Support and receive the Coronavirus supplement of $550 on top of any Centrelink benefits
- Receive the $750 payment to support households , this will automatically be paid out when you are registered with Centrelink
- Apply for early access to your super
Now you can look at your business from the “outside in”.
- At this stage you will have already let your staff go and (hopefully) told them that they have their job back once this is all over.
- Next step is to shut down your shop – make sure everything is turned off and securely stored away. Leave your shop as if you are shutting down for a holiday – don’t think about the time period – nobody knows anyway.
The most important thing to make sure is that you will be able to open up the moment a cure or vaccine has been found and restrictions are released. Think about how awesome that will be to be amongst the first to provide your services again to customers after a prolonged shutdown! - Temporary finalise your books
Get your bookkeeper on board – negotiate deferred payments if necessary – and let them clean everything up. There should only be unpaid bills left over in your accounts, everything else should be finalised and then “hibernated”. - Send out an email to all your suppliers, landlords, lenders and other business partners to outline your strategy to save your business. Tell them what you are planning to do when you open up again and how you propose to pay back the hibernated debt. This will give you the upper hand because most of the institutions will be happy to have a solution and tick you off their list of problems.
- Now you are officially hibernated. You have secured personal payments to stay alive and you have put your business to sleep for as long as it takes. This is now the time to reflect on what you are doing right and what never worked out – where you want to improve and what you always wanted to scratch but never had the time to do so. It is the time to up skill yourself and find areas to explore where you always wanted to know more. But most of all it is a quiet time that we all miss so desperately because life is growing so busy around us!
- As the last step – if you are brave enough and believe in your “resurrection” with all your heart – go one step further and ask your bank for support to invest in improvements that you always wanted to undertake but never had the time to do so. If you have a strong business plan at hand that will show your increased sales potential after reopening, chances are your bank will jump on board.
Please call us or arrange an appointment if you want to know more about any of these steps. We are here to help you through this (with deferred payment options available).