Hi, it’s Ashley Thomson with the COVID-19 business continuity update for Monday 30th March.
In today’s update:
1. Government approach: stay open. What this means for your business
2. Support for commercial tenants: no evictions
1. Government approach: stay open. What this means for your business?
Over the weekend we have seen clearer communication from the government on their plans for tackling the crisis. Our view at Tenfold is that our government is heading in a different direction than other countries and so we need to be proactive and adjust our business models and plans.
The government so far has taken a ‘stay open’ rather than a ‘shut down’ approach, which they strongly recommitted to in both press conferences on Friday afternoon and Sunday evening.
There are three important points for Tenfold clients to take out of this:
- Business continues to trade – the government will strive to keep all businesses operational, except for specific consumer industries that are high contact and discretionary.
- 6 months – the government expects this situation to continue for up to 6 months
- Infection rates determine policy – they will change these plans if they see infections go up, but they are cautiously optimistic that the rise of infections is not out of control in Australia.
Based on these points, we as business owners need to steel ourselves for up to 6 months. This is going to be a mental game when at times you might want to throw the towel in and at other times, you’ll see a silver lining to this situation. I have outlined what I see as the three stages we can plan for and the approximate time frames of each. Prepare yourself mentally for each of these stages and you will not only survive, but come out the other side in much better shape. Your Tenfold business mentor is here to help you.
Weather the Storm – now to mid-April
- Mindset – don’t panic, be aware of your emotional rollercoaster
- Leadership – show strength and lead your team, they will be as anxious as you
- Make decisions based on logic and financial modelling
- Watch for government messages carefully
- Business strategy – create a COVID-19 Continuity Plan with a business coach and prepare the business for a slowdown or hibernation if you are in an industry that has been shut down
Adjust to the New Norm – mid-April to May
- Mindset – be content with a breakeven position, don’t buy into the hysteria of the media, wait patiently
- Leadership – Communicate, let your team know what is happening, the good and the bad. Provide emotional support for your team, help them see that the situation won’t last
- Be aware some big corporate companies will disappear, there will be lots of talk about recession and depression
- Business strategy – Run your business according to your COVID-19 Continuity Plan and refine the plan according to the conditions
Prepare for the Uplift – June to October
- Mindset – act early, be prepared
- Watch for government stimulus targeted at consumers. People aren’t going to immediately start spending again, especially on consumer discretionary items, so watch to see what the government puts out about stimulus targeted at igniting consumption
- Watch for competitors who have given up or gone out of business, seek out opportunities to take over clients and work that is now up for grabs
- Prepare and activate marketing plans, develop job descriptions and job adverts to attract A grade team members who were jettisoned as a result of Coronavirus
- Leadership – Energise your team, show them the opportunities, engage them in coming out of the slowdown and embracing the growth
It’s useful to look back at the GDP uplift coming out of the GFC:
2. Support for commercial tenants
Today, Australian banks will expand their business support package to all businesses with loans of up to $10 million, making them eligible to have their loan repayments deferred for six months.
As part of today’s announcement, commercial landlords with loans of up to $10 million will be eligible for the same six months’ repayment relief. In order for those commercial landlords to access this package, they will have to give an undertaking that they will not terminate the lease or evict any tenant who is in arrears because of COVID-19. We will also see landlords more open to providing rental support for tenants.
Your Tenfold business mentor can help you negotiate your lease arrangements with your landlord/property manager so you can potentially reduce your ongoing rental costs during this period.
For tomorrow, we’re preparing an in-depth review of all of the cost savings that can be achieved in the three main categories of costs; labour, rent and general expenses.