COVID-19 and your business - impacts

We met with the bank today to crunch some scenarios, talk through options and “what if”s. They were very frank about how they viewed prospects for local businesses.

We are already seeing a downturn in the last week (retail store) but where it gets really scary is if one of the staff were confirmed as having it.... two week shut down of the whole store?!! Can’t exactly WFH in retail...

Thankfully we’re in an ok position and should be able to come through this.... but it is going to be very tough for a lot of small businesses, especially in regional areas where other industries / the general economy is seriously struggling.

What impacts have you seen on your business, and what have you done to mitigate them (either so far, or planned)?

 

We have seen some ridiculous panic by two fairly senior but lazy staff about staying home (on full pay) until the whole thing washes over.
So 35 staff costing about $80k per week with no work indefinitely.
When the two protagonists were advised they could take time off without pay ( as they use all sick leave, holiday leave, compassionate leave and even domestic violence leave, as it falls due) they were happy to continue on working.

 

That's really taking the mickey!

 

Not sure from your post (although I am guessing you’re still open) but was it just those 2 staff that chose to stay home, or did that affect/influence others? Are you also retail, or if not, what sector?

Staff taking the mickey can be a big aspect...

 

Yeah the entitlement of some people

My workplace is pretty good in that regard but some I hear ranting and raving like about trivial things like how unfair life is because their boss is making them take annual leave or not likely to get a payrise soon because of the economy

 

We just had a new Massage centre opened in our small shopping centre about 2 months ago by a friendly Chinese couple...

Poor thing...walked by a few times and not a single soul in sight

Discretionary spending will go. Fast! (nail salons? dry cleaning? cafes ? Spas? Facials?

 

Everyone is facing a difficult time.

If I open a business( personal service) this year that means I will have to sell my house to pay for rents.

If the foot traffic in major shopping centers is not proven in this hard time so where is the best place?

 

My hospitality business is in the absolute Poo.

Asking landlord for a 3 month rental holiday now. Hope Stimulus package announced today is good.

On the phone to Commbank to try and place hold on debt repayments as per their media release. currently on hold for 20 minutes, so that probably tells you something.

 

Very few business will maintain regular activity at moment. To the best we can it is a big lesson on diversity in what you sell and range of clients you are exposed to. Equally this will ride high for those trying to sell a business now and those doing risk assessment who were planning to buy into one.

I have medical clients remaining strong, and retail ones dropping off in a serious way.

Lesson is diversity to a reasonable level that small business can manage and profit.

Then you need backup plans / backup businesses etc if you have to launch them which may work better in a down turn. But all this takes ages to get of the ground unless it is already running small.

I couldn't imagine having to deal with high rents, staffing and outgoings in this period. Those fixed costs would be the killer. There is only so much you can scale back and turn off.

Yes easily said, but my 1 cent worth.

What about all the struggling franchises that can barely profit in the good times?

 

B2C customers have only started to feel the impact. A lot of business to consumer guys had the biggest lead up coming into Sunday.

I think for a lot of people nothing has really changed yet.

Farming, mining and food is unaffected other than future staff layoffs. Iron ore is holding up but that might change.

We currently have massive enquiry with the stimulus package and talking with banks.

 

Get on the front foot before everybody else calls them.

Tell them you will pay them 50%, given the current environment, and then pay them 40%, and call them to let them know they will need to write off the balance, and you don't care of they do it on 30 June or 1 July, as that's their business.

Some pie, or no pie. Time to choose.

I realise this is really unpleasant, and can be transposed to Resi, but it is what it is.

 

Yes, but expenses need to be cut to the bone in this environment.

 

Those franchises are probably going to experience an unpleasant biblical event.

And, having many years retail experience, I cant think of how they will continue, unless they start stocking products that people want to buy, such as toilet paper, hand sanitiser and tissues.

If Noni B can do it, then so can anybody else...

 

Yep...the game this week was using company car and driver to deliver desktops and screens out to the provinces...data the current issue!

 

So far we are already doing:
- request rent reductions (at least 3 months)
- change opening/closing times (albeit only slightly)
- limit all non-essential overtime & casual hours
- achieve an already-set stock reduction target
- “manage” accounts

If required, the next stage will be:
- move any loans to interest only for a period (already approved by the bank)
- further reduction in opening hours, staff levels & stock holdings

Last choices:
- stand down staff / take salary hits
- request an extension on our overdraft
- call in any loans

We are also looking to see if we can work out a staff roster that enables a split into 2 or 3 “teams” and have no overlap (this so that if a case is confirmed among staff, not EVERYONE has to self-isolate). Not that easy.

Tough times ahead for many.