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2020-04-26 04:21:16coronavirusEnglishIf you're wondering whether to close your business temporarily amid the coronavirus, here are 4 things to think about. Learn more.https://quickbooks.intuit.com/au/resources/au_qrc/uploads/2020/04/temporary-closure.jpghttps://quickbooks.intuit.com/au/resources/coronavirus/close-business-temporarily/4 questions to consider before you close your business temporarily

4 questions to consider before you temporarily close your business

10 min read

As the government issues self-isolating guidelines and social distancing measures which affects a plethora of industries,many businesses are closing their doors temporarily. As a business owner, you may find yourself wondering if your business should do the same. But before you do, consider the following questions:

  1. How will I know when it’s the right time to close temporarily?
  2. What legal and financial risks could affect my decision?
  3. What financial assistance do I qualify for if I close temporarily?
  4. What should I do if I get sick?

How to know when it’s the right time to close temporarily

As you think about closing your business for a time, you’ll want to consider key factors. These factors include government mandates, suppliers, your health, and more.

Consider external factors

Government requirements

As of March 30, the government has prohibited public gatherings of more than 2 people and is requiring Australians to stay home, leaving the house only to shop for essentials, receive medical care, exercise or attend work or education.

A number of businesses and organisations were required to close including pubs, clubs and hotels, gyms, cinemas, beauty salons, churches and places of worship. Restaurants and cafés are restricted to takeaways.

In addition, there are further restrictions from state to state. You’ll need to check the current situation in your own state, territory or locaity.

The number of confirmed cases in your area

The number of confirmed cases in your area may affect your decision to close your business. If there is an increase in reported cases near your business, your local health department may advise businesses to close to protect the community.

Supplier availability

If your suppliers or shipping service have shut down production, they may also force your hand. Border closures will further impact supply chains.

How to manage external factors

As the pandemic continues to spread, more disruptions may be on the horizon. Here’s what small business owners can do to manage external factors:

  • Check government websites for updates on current restrictions from federal, state, and regional health officials.
  • Research the current status of community spread in your area.
  • Communicate with your suppliers to stay current on changes to shipment schedules. Ask your suppliers if they’ve created long-term plans. Then consider how these plans might affect your business. Notify customers of the potential for delays if your supplier is experiencing troubles.

Consider internal factors

Your and your family’s health

Consider your health if you’re within a high-risk group for contracting the coronavirus. Consider your family, and if anyone you live with is at a higher risk. And keep in mind that you may not experience symptoms but can carry the virus and transmit it to others. If you feel your health or your family’s health is at risk, then social isolation might be the best protection. And that could mean closing your business temporarily.

Your employees’ health

Consider the health of your employees and their families. If employees are at higher risk of developing severe symptoms, then it may not be safe for them to continue working near others. Social distancing may help protect them, but not all employees can do their work from home. Consider your options, such as staggering shifts and limiting the number of people on the clock.

Your business revenue, cash flow, and savings

Many small businesses run on tight margins. And with people avoiding public spaces or stores, your business may be affected by low sales. Disruptions to cash flow can be hard on your finances. And you may have to dip into your personal savings to recover. Evaluate your finances and business performance to determine how much a temporary closure will affect your business.

How to manage internal factors

If any of these internal factors are influencing your decision, explore the following options:

  • Limit contact with any at-risk people who may frequent your business.
  • Follow the health department’s advice on reducing transmission.
    • Ensure everyone washes their hands regularly and doesn’t touch their face.
    • Sanitise high-traffic areas.
    • Maintain a distance of 1.5 metres from customers and other employees.
    • Stagger shifts so that employees are not all on the clock at the same time.
    • If anyone is sick, make sure they stay home.
    • If possible, ask those at higher risk to work from home to avoid contact with others.
  • If your business revenue or personal revenue is at risk of experiencing financial hardship, consider:
    • Generating income with delivery services or online ordering.
    • Creating a business continuity plan to document how you will weather the pandemic.
    • Preparing for any potential operational or supply-chain disruptions.
    • Comparing the cost to stay open (including overhead costs, payroll, etc.) and close temporarily.

Legal and financial risks

As the pandemic spreads, you may experience legal and financial fallout if you choose to stay open.

Legal risks

State, and federal guidelines can change at a moment’s notice. Even if you’re in an industry which is currently allowed to continue as usual, there may be further restrictions to come which could impact your operations. Follow local guidelines and speak with a legal expert in your area if you’re unsure.

Other legal risks may include employee lawsuits for unsafe work conditions. Check out Safe Work Australia, to make sure you’re fulfilling your obligations.

Safe work advises that employers should currently be doing the following things to ensure they are providing a safe workplace:

  1. Allowing employees to work from home where possible
  2. Heighten hygiene practices, cleaning and disinfection to prevent the spread.
  3. Sending employees home if they are unwell
  4. Have signs around the workplace to remind workers of safety measures
  5. Ensure social distancing, with a minimum of 1.5 metres between all customers and employees.
  6. Provide facilities for good hygiene – soap, toilet paper etc

In order to satisfy your legal duty of care to your employees under the work health and safety laws, you need to implement control measures that are ‘reasonably practicable’. And remember to check the local laws in your state, especially in Western Australia and Victoria that have not implemented the national laws.

Financial risks

Closing your business, even temporarily, can result in significant financial losses. So you’ll need to consider if you can afford to close and if staying open will cost more. Whatever you decide, you may still need to cover the following costs and expenses:

  • Employee pay. Will you continue to pay employees after you’ve closed the business? Or will you lay off employees and offer severance pay? Check state and federal laws for further guidance on layoffs.
  • Overhead costs. Contact your leaseholder, landlord, or loan provider to see if they can waive payments temporarily or accommodate payment plans. Then contact your utility provider to see if they offer a similar service.
  • Supplier costs. If you’re still receiving inventory, you still need to pay suppliers, regardless of sales. Speak with your suppliers to determine a course of action.
  • Miscellaneous expenses. You’ll need to consider monthly payments on business tools and credit card payments. Speak with each service provider to determine if they can offer financial assistance.
  • Note that both state federal and state governments, have announced a range of relief initiatives to address your business costs. These include SME commercial leasing principles, the Early Childhood relief package, Jobseeker payments, wage subsidies and many more. Start by looking at the ‘Financial Support’ heading on the government’s Covid19 page.

Other local businesses may provide some inspiration on what to do. Speak with your local small business council, neighboring businesses, and business advisors to get advice. You might also speak to:

  • An employment lawyer. They may be able to help you in the event of a layoff and ensure you’re compliant with all necessary laws.
  • Your accountant or bookkeeper. They will be familiar with your business’s finances and situation. They can also help you build a plan for when you hope to re-open.
  • A reputable business advisor. They can keep you informed of important changes in your area.
  • Your financial advisor or certified public accountant (CPA). They can help you make sure you have your personal finances in order.

Financial assistance for businesses that need to close temporarily

If you decide to close your business temporarily, you may need financial assistance to ride out the storm. Depending on where you work, you may have a few options for financial aid.

Local assistance

Check with your local small business council to learn more about local assistance programs.

State assistance

Your state or territory may also have relief funds in place to help small businesses. The Victorian Government has launched the $500 million Business Support Fund. And the WA Government has announced a $1 billion economic and health relief package to support Western Australian businesses, households and community groups.

Federal assistance

Research your options on business.gov.au .Follow the links to research support available to sole traders, companies or employers.

What to do if you get sick

1. Seek medical attention and follow guidance

If you are sick and think you have symptoms of COVID-19, seek medical advice. If you want to talk to someone about your symptoms, call the National Coronavirus Helpline for advice on 1800 020 080.

There are respiratory clinics around the country to assess people who have a fever, a cough, a sore throat, or shortness of breath. These are being rolled out gradually. If there is not one in your area yet, visit your state or territory health department website for more information on fever clinics and other services.

While you wait for assessment or results of Covid19 testing, isolate yourself and protect others.

2. Consider your health and ability to continue working

If you or someone in your household is at a higher risk for contracting the coronavirus, continuing to work may be risky. Unless you work remotely for your clients, continuing to interact with customers and clients could expose you to the coronavirus.

3. Consider the health of your customers and clients

If you work with your clients directly, you will also want to consider their health. If clients are at a higher risk of serious complications, you may want to work with them remotely or stop working with them temporarily.

4. Consider your ability to fulfill orders and meet customer needs

If you choose to continue working with clients, you will want to consider how this may affect your work. And if you get sick, your health might impact the quality of your work. Consider how your customer service, work, and results might suffer if you get sick and choose to stay open.

5. Consider your ability to get financial assistance or additional workers

Your business and personal finances might suffer if you choose to close your business. But the cost to run the business might also hurt you financially if you choose to stay open and lose sales. Consider the financial safety nets you have in place, and if you can apply for financial assistance in your area. Finally, consider if you can hire someone to take over your work in the event you get sick or need help.

Making your decision

Temporarily closing your business is a serious decision. It’s important to weigh all the factors. Seeking advice from experts and advisors can help you make the best decision possible. The good news is there’s more assistance available to small businesses right now than ever. With help from the community, your state, and the federal government, small businesses will have the options they need to weather the storm.

If this article was helpful, head over to QuickBooks Resource Centre for more ideas on how you can get your business through Covid19.

This content is for information purposes only, and information provided should not be considered legal, accounting or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc. does it have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Inc. cannot warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers should verify statements before relying on them.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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