COVID-19 Business Hub

Last updated at: 28/04/20 2:37pm

Hub Overview

With the ever-changing economic environment as a result of the COVID-19 virus, businesses need to navigate the complex web of Federal stimulus packages, as well as varied sources of advice and guidance to ensure their business remains viable now and into the future.

To help, we have created a centralised point of reference for advice and updates on all matters relating to managing your business through these challenging times.

Latest News & Updates

  • New NZ loan scheme for SMEsInland Revenue will provide interest-free or low interest loans for a year to small businesses impacted by the pandemic. Under the Small Business Cashflow Loan Scheme up to $100,000 is accessible, for SMEs employing 50 or fewer full-time equivalent employees – interest-free, if they are paid back within a year; 3% interest for a maximum of five years with no repayments required in the first two years. Applications open May 12.
  • In a separate initiative, the already-announced Business Finance Guarantee Scheme has been amended in May to allow agri-businesses and very small businesses. Smaller businesses will now be able to access loans under the scheme, as the requirement for businesses to have had a minimum turnover of $250,000 in the 2019 financial year has been removed. Details here.

Immediate Actions Checklist

  • Your number one priority needs to be your cash flow and maintaining the war chest as best you can. Below is a top 5 priority list that we strongly advise that you as a business owner or director go through in detail:
  1. Your employees
    Who is mission critical to your ongoing trading? Identify these people and keep them safe. If you can, split them into ‘Team A’ and ‘Team B’ to reduce the chance of everyone being away from your business at the same time if people need to self-isolate.
    Can you offer your staff any incentives to take (unpaid) leave or temporarily reduce their salary? Incentives could include an extra week of annual leave next year or finishing at 3pm on a Friday during next summer.
  2. Your clients
    Look at which clients are your top 5 revenue earners? Call them to ask if they can pay you early and if they will still be ordering from you next week / month.
    Speak to your clients every week; their world can change quickly and you want to be across any changes as soon as they happen. Make sure your clients are preparing their business to weather this storm in the same way you are.
  3. Government assistance, including the IRD
    Have you read through the stimulus packages to understand what support is available to you? Do you know your next steps to accessing these packages?
  4. Funding
    Regular and honest communication with your financier is key. Have a good think about what help you need; if you need additional money, do you have anything else to offer to support your request?
    Have you read through the Government stimulus packages available? Many banks are deferring mortgage repayments for 3 – 6 months if you need some hardship support.
  5. Operations
    Open lines of communications with your suppliers early. If you trade from rented premises, proactively call your landlord and ask for some relief. Options may include reducing rent now and paying more when covid-19 passes or renegotiating your rent to only pay a % of revenue.

Comprehensive Cash Flow and Operational Considerations

  • Leverage the many government stimulus initiatives available where applicable.  New initiatives keep being added, so watch out for relief packages.
  • Establish a 13 week cash flow forecast, ideally longer, and review daily or as regularly as possible.
    • Prepare sensitivity analysis on revenue (V shape – quick fall, quick recovery; U shape – medium fall, longer recovery; L shape – sharp fall, uncertain recovery).
    • You may be uncertain about your revenue, but you can take steps now to control your costs. Halt or reduce your cost base, including cutting discretionary spend.
    • Appoint one person in your business to approve all expenditure; this will help you keep track of what you are spending and why.
    • Model worst-case situations for the short to medium term. It’s okay to hope for the best as long as you’re prepared for the worst.
  • Look to early payment programs and discounting opportunities. Cash flow is the urgent priority, not profitability.
  • Remain agile as situation is highly dynamic – adapt or fall.
  • Make time for regular updates with your team. Your employees will be able to focus more on their important roles if they know what is happening around them.
  • Talk to all your key stakeholders regularly; clients and suppliers are your key partners through this time. People are more willing to help if they understand what you need. It is ok to be vulnerable and ask for help.
  • Review funding solutions to see what’s available to you, what’s appropriate for you and whether your current solutions best suit you.
  • Take stock of your assets and understand where your hidden value is. Contracts, invoices, inventory, equipment etc.
  • Manage your stress and keep calm. The captain needs to be in control of themselves before they steer the ship
  • Seek advice and counsel where possible. Talk to your advisors and gain their expertise. You are the expert in your industry, they are the experts during these uncertain times.

There are many resources readily available to help you navigate these troublesome times, be sure to lean on them where possible and seek advice from experts where available.