Spring 2021 Newsletter
Looking Onwards and Upwards
The fast-changing nature of the pandemic has made the past few months challenging for many of us. Businesses that finally returned to regular trading in the first half of the year were plunged back into uncertainty as lockdown measures were reintroduced, and much of the state found themselves suddenly back working at home, with many juggling remote learning at the same time.
Fortunately, there is some light at the end of the tunnel, with vaccination rates continuing to rise steadily and the Premier announcing a roadmap out of lockdown for Victoria. To assist our clients in navigating the next few months, in this newsletter we’ve outlined the latest support measures from the ATO and the state government. We’ve also provided some simple strategies to help you support your mental health.
Finally, in the spirit of moving towards a more positive situation, we’ve included an example of a local business in our network that has taken the challenges imposed by the pandemic, and used them to innovate and strengthen his business, putting it on track for a record year. We hope you’re able to take some inspiration from this success story.
Stay well and all the best,
Vargiu Accountants
Small businesses successfully pivoting
Australian small business owners hit by the economic impact of the coronavirus have had to adapt in order to survive. Findings from Westpac’s SME COVID-19 Response Report shows 49 per cent of Australian small businesses have changed the way they operate. These include providing additional products and services (29%), moving their business online (21%), and changing the focus of the business (19%).
While many of these changes were made out of necessity, a silver lining has been that many businesses have fast tracked projects they’d long been planning to execute, such as moving online, offering a takeaway service or streamlining operations. And this has resulted in lots of businesses successfully diversifying their offerings and making them more robust and sustainable long-term.
In our own network, a great example of this transformation is Forza Italia, a retailer of Italian sporting, automotive and novelty clothing and merchandise located in Carlton which has shifted its focus from traditional retail to online.
In late 2019, the business relocated to a new store and by end of the first quarter of 2020, it became clear that its traditional retail business model had to be revised if it was to survive. Forza Italia’s website was upgraded, its entire inventory went online, and marketing on social media was significantly boosted. The business owner also created more value-adding offerings such as picture framing, design, and customised team wear.
Additionally, the business owner formed a number of new alliances with sporting clubs, motoring enthusiast groups and an entertainment group. It pursued new market segments and secured Victorian distribution rights to a major international team wear supplier.
Online orders started to come in from across Australia and from as far away as Canada, and growth in 2021 is on track to increase by 100 per cent. Looking forward, while the retail store will remain, it will act as a showroom to support the business’s thriving online trade.
While the pandemic has been incredibly tough on small business owners, there are many wonderful examples of businesses that have creatively adapted their offering to ensure they survive this period and flourish post pandemic.
ATO suspends some lodgement activities for businesses in lockdown
The ATO has paused firmer debt and lodgement activities for individuals and businesses in Victoria to mitigate the impact of COVID-19 lockdowns. The suspended firmer activities are expected to include garnishee notices, statutory demands, and the disclosure of business tax debts to crediting bureaus. The ATO is not implementing a universal pause on all compliance work as it did last year however.
If you have an outstanding ATO debt, please get in touch with a member of our team to discuss your options. Interest free payment plans can be arranged with the ATO and where possible, we recommend that debts are settled with the ATO during this time.
September COVID-19 support update
The Victorian Government recently announced a new support package for small and medium businesses in the state most impacted by current lockdown measures, which will cover the four-week period ending 30 September. We recently emailed clients about these support payments and have also outlined them below.
- Business Costs Assistance Program
- Licensed Hospitality Fund 2021
- COVID-19 Disaster Payment
- Commercial Tenancy Relief Scheme
If you didn’t receive our previous communication, you can access it on our website here. If you would benefit from more information about any of these initiatives, please get in touch with a member of our team. You can also visit Business Victoria’s website.
Please be aware that there is currently a scam SMS circulating that is pretending to be from Business Victoria. Business Victoria won’t ever contact you via SMS, and will always send an email from an address ending in ‘vic.gov.au’.
ATO Cash Flow Coaching Kit – Small Businesses
The ATO’s Cash Flow Coaching Kit is a new resource designed to help advisers assist small businesses with cash flow, meeting financial commitments and remaining in business during this difficult time.
The Cash Flow Coaching Kit helps advisers to discuss:
- Health of the business including cash flow
- Potential issues which create cash flow problems
- Cash flow in and out of the business
- How to improve cash flow
- Goals to improve cash flow
For more information on the ATO’s Cash Flow Coaching Kit, visit the ATO’s website here. And to discuss how it could benefit your business, please get in touch with the team at Vargiu Accountants.
Strategies to support your mental health
The pandemic has been tough on all of us and it’s completely normal that our mental health has been impacted as a result. To help you manage your mental health and overall wellbeing during this difficult time, here are some simple strategies you can practice daily.
1. Acknowledge what you can and can’t change, then focus on the things that are in your control.
2. Don’t fixate on the noise; avoid the news if it is weighing you down.
3. Set regular reminders to get up, go for a walk, and get fresh air
4. Do the things that make you happy. This can be as simple as calling a family member, cooking a favourite meal, or watching a much-loved movie.
5. Don’t set yourself unrealistic goals, especially given some things simply aren’t achievable in the current circumstances. Set small achievable goals that will give you a sense of accomplishment.
If you would like to learn more about strategies to support mental health, visit The Black Dog Institute’s website here.
