COVID-19

18 Mar COVID-19

Yes, Covid-19 is here, and it is creating some fundamental changes in how our country operates incredibly quickly.  One of the benefits of living on small islands in the south pacific is that we are relatively isolated.  As of writing this there are only 20 confirmed cases so with a bit of luck and a lot of effort, NZ might dodge the worst of the health effects of this virus.

The economic effects on the other-hand…  Our economy is bound to take a significant hit, no one is sure exactly how much of a hit, but our best guess is that it’s somewhere between “pretty bad” and “an utter train wreck”.

We all need to make good decisions quickly, for the good of ourselves, our family, our business and our planet.  Practically, what does this mean?

1. Keep calm (easier to say than do, right?) When we panic, different parts of our brain become hyper-active, and we become incredibly short term in our thinking.This can result in us over-emphasising risks, and making very poor decisions.
2. Follow the public health advice for yourself and ensure that your team do the same.  This isn’t just for your own good, its for the good of others too.
3. When economic conditions worse, a common reaction is to increase your own hours of work to try and ‘work your way out of it’.  Becoming tired and stressed makes you more likely to get sick, so maintain some balance.
4. Make sure those close to you are safe and secure.   What support does your family and extended family and community need?
5. Develop a contingency plan: if you did have some form of interruption or had to shut temporarily, how will you communicate this out to your customers?  How will you inform suppliers or the bank?
6. If financial hardship is likely for your business, have a discussion with your team.Invite their input and look for ideas – i.e. would everyone reduce their hours?Or perhaps change tasks that they are focused on?
7. Will you continue to collect your income as in previous months?  Or will that pattern change?  If the pattern is likely to change, what can YOU change now to be prepared for it?
8. Will you be able to make your fixed payment commitments, rent, finance payments on vehicles and plant, mortgage payments?   If not, the best time to talk to your financiers/landlord etc is NOW to ask about flexibility and alternative arrangements.
9. Large tax payments will soon be due, for Income Tax and GST.  Will you be able to pay?   If not, IRD have released some measures and guidance on what to do, it can be found here.  IRD are still developing their response, we will let you know the details when they are released.
10. We recommend that you take the time to consider these issues, to work on your business, not just work in your business.  This means taking some time to reflect on where your business is now, and where it is likely to be in the mid to long term.
11. Already taking a financial hit?  Do you have staff who have had to self-isolate or take care of others?  You can apply for the Covid-19 wage subsidy. Go to https://www.aroadvisers.com/covid-19/, it has the links to apply for the subsidies and very brief videos of how to fill them in.
12. We are all going to have to be careful with spending, both business and personal.We will be sending you more about this over the coming months.

Most of all, these are stressful and uncertain times.  Take care of yourself and take care of others.