Over the next four, six or eight weeks (who really knows) your focus will be on managing your business and getting it ready for when the time comes to re-open.
The two big questions being asked at the start of the lockdown are centred around staff and money, the latter being the prominent one.
• Apply for the wage subsidy package as many would have already done so — $585.80 per full time employee, or $350 for a part timer, for 12 weeks. This includes you, the owner, even if you are a one-person enterprise. Don’t wait — get onto it.
• Sort your home mortgage out with the six-month mortgage holiday or an interest-only plan.
• Get all your loans on interest-only.
• Cut as many expenses as you can.
• Talk to your landlord regarding your lease.
It’s just common sense stuff, and for some, if we are back to work in four weeks it won’t make a big difference.
But if we are still locked down in 12 weeks’ time it will make a huge impact on your cashflow and mental well-being. So do it now and prepare.
There are several financial help packages that have been broadcast, such as:
• Business Finance Guarantee Scheme: This is a loan through your bank for up to $500,000 for three years. It is for businesses that have a turnover of $250,000 to $80m. So not for all, but handy if the situation gets worse for some.
• The IRD is talking about help with tax, provisional payments, and use of money interest. ACC payments are being looked into as well.
The bottom line is that there is, and will be, a great deal of help out there. Look at it all, see what is relevant to you, don’t rush into any of it without finding out the outcomes or payback terms, but make use of all of it.
This is a controversial topic, and it centres around paying your staff 80% of their wages. Morally you want to help your staff as much as possible, you don’t want them suffering, and you want to keep them.
If you have the resources to pay them 100% you’re awesome. If you can manage the 80% without putting a strain on the business then great. But for some, topping up the $585 to 80% will cripple the business.
This is the controversial point, and it’s in the interpretation of the wording from the Government, who state: “Employers must use their best endeavours to maintain 80%”.
If your best endeavours to pay the top-up will bankrupt you in the next 4 to 8 weeks, is this working in the best interest of the employee, because they now don’t have a job at all?
You really need to think about this and decide what’s best for your business. Forecasts and budgets will help a lot here.
I have had questions relating to using holiday pay and sick leave. I say yes to holiday pay if you can afford it. But it has to be consented by the employee, and get it in writing.
And, no to sick leave unless the employee is genuinely sick — but be careful with this.
There was a lot of talk around essential services. If you believe you can be an essential service, call the 0800 number and get it sorted first. If you don’t get the required documentation before cashing on with business the fines will be costly.
I read this quote the other day — if you are looking for the loophole you don’t get the point of the lockdown.
That’s it for now and, as I mentioned at the start, the best advice is to step back and take a breath.
This will be over sooner or later and normality will return. You can ensure your business survives, and many will prosper on the rebound — you just have to be ready.
• Building Today Business columnist Terry Sage of Business Coaching NZ Ltd is offering a question and answer service to get you ready to open your doors and hit the ground running as soon the lockdown finishes.
Click here and ask your questions or have your concerns sorted.