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Terminally … unless they implement careful cashflow management and lean on the support provided by State/Federal Government, trusted business advisors and large corporations. If they do this, then I think that small businesses in Australia can survive the worst of the COVID-19 impact and ultimately emerge intact once it passes. (See the 15 strategies outlined below)In my position as a Small Business Teacher at TAFE Queensland, I have been charged by the Queensland State Government to develop a webinar that helps small businesses survive this crisis. Detailed below is the content of that webinar.Building on my decades of experience (some disastrous) in founding and managing over 30 cafes, speciality retail and restaurant businesses in Australia, I have researched all the options (as at 28 March 2020) that small business can activate to survive this crisis … especially for small businesses in Queensland.The attitude that I believe small businesses must adopt is brilliantly eulogised in the Gladiator (2000) Movie by DreamWorks, where the Gladiator character, when facing mortal danger of unknown proportions, says“Whatever comes out of these gates, we've got a better chance of survival if we work together.”In this crisis, small businesses do not have a choice - they are going to have work together with all stakeholders which includes Governments, financiers, shareholders, landlords, suppliers, creditors, clients, unions, employees … if they are going to survive.Now an age-old and often necessary action in times when small business revenue falls is to terminate staff (especially casuals) … but not this time. At present, there is no market for an unemployed person, so this action would be cruel. For your small business to survive you will need others to support you … so this time we need to ‘pay it forward’ in relation to our staff and keep as many employed as possible. In fact, central to the Government’s support for your small business is for you to support your staff.To get through the mental shock that COVID-19 is having on the Australian economy, small businesses must understand this truth …“This crisis is not your fault … but the responsibility has fallen to you to deal with it”As a critical starting point, all small business owners should build their online networks ASAP, which includes:Personal networks: emotional support – i.e. family/friendsOperational networks: efficient day to day business operations – i.e. Specific industry associations/mentorsStrategic networks: future opportunities/threats – i.e. Chamber of Commerce and Industry/Global communities (Quora)A cashflow management focus rather than a profit focus is the key to surviving this crisis because while a business can survive for some time without profit, without cash - failure is imminent.So here are the 15 strategies that I believe that small businesses in Australia can adopt to mitigate the impact of COVID-19 and stop the impact from being terminal on their business.Option 1 – Implement Cash-flow Management Strategies[1]Review all outgoing expenditure – line by line and reduce expense payments in the long term business building expenses over the expenses that relate to immediate survival value.Analyse and rank your creditors according to their ability to cripple your business. Pay the priority 1 creditors first.Defer capital purchases – Property, plant, equipment, vehicles, furniture. (better to rent, share, lease)Develop a payment plan with your creditors but you will need a detailed cashflow forecast.Increase cash into your business by clearing out obsolete and overstocked merchandise, selling non-core equipment and assets, get, State/Federal Government low-interest loansDecrease cash going out of your business by converting annual payments to monthly payments, negotiate with the landlord (rent reduction or rent deferral), lease, rent or borrow rather than buy, surrender non-essential lease assets, buy on consignment (Pay for only what you sell), negotiate debt payments plans (creditors, ATO, landlord), reduce owners drawings from the business to just necessitiesOption 2 - Get a trusted advisor to negotiate deals on your behalfSmall businesses are going to need help negotiating all the deals they need to survive. At present they are too emotionally involved. They have made promises, that through no fault of their own … they just can’t keep. The challenge to their integrity makes them poor negotiators. My advice is for them to get a trusted and capable negotiator.Negotiations are needed with Landlords (rent renegotiation), repayment plans (with Creditors, ATO, Payroll tax), Loans (Banks, Federal and State Government), Creditors (getting trading terms extensions), ‘White Knight’ investors and completing applications (i.e. Apprentice subsidy)Trusted and capable advisors would include consultants who belong to Professional Association and/or are answerable to Government Authorities or Departments. These include accountants (members of CA or CPA), lawyers (members of the Australian Bar Association), business reconstruction and turnaround specialist (ASIC registered liquidator) or a trusted mentor – (DESBIT Mentor for Growth)Option 3 - Claim the Federal Government’s - Cash flow assistance for businessSmall businesses receive a tax-free payment equal to 100 per cent of the salary and wages withheld (PAYG Withholding) in the Jan-Mar period as reported on their BAS.Payment automatically calculated by the (ATO). No forms are required. Note: Best to lodge your BAS early (soon after 1 April as possible). See Fact Sheet link for details. Also, call Emergency Support Infoline 1800 806 218 if required.Option 4: Claim PAYG Instalment refundSmall businesses can adjust their Pay-As-You-Go Instalment (Employer’s tax) on their BAS to zero for the March 2020 quarter and then claim a refund for any instalment payment made for the September 2019 and December 2019 quarters.Small Businesses can change their BAS reporting period from Quarterly to Monthly to speed up refunds. See details here Administrative measuresOption 5: Drawdown some personal SuperannuationSmall business owners, affected by the Coronavirus, can access up to $10,000 of their Superannuation in 2019-20 + $10,000 in 2020-21Small business owners will need to apply directly to the ATO through myGov website and certify that you meet the eligibility criteria. The ATO will then review the application and make a determination, then authorise your Superannuation Fund to pay your bank account. See details here Early access to SuperOption 6: Get a Federal Government-backed loanUnder the Coronavirus SME Guarantee Scheme, the Federal Government will provide a guarantee of 50% of a new unsecured (no asset security required) bank loan used for Small Businesses as working capitalThe maximum amount is $250,000 per borrower, for up to 3 years with a repayment holiday for the first 6mth. See details here SME Guarantee SchemeOption 7: Negotiate an ATO Payment plan - BASThe Australian Tax Office (ATO) will grant small businesses a deferral of some payments by up to 6 months on taxation debt. This included both GST and Income tax.Small businesses can request a low-interest payment plan (up to 2 years repayment period) but the small business must still lodge their BAS on time and still pay in full the employee Superannuation liabilities. You or your accountant must contact the ATO to make a request on the Emergency Support Infoline on 1800 806 218 or by email. See details here ATO Low-Interest Payment PlanOption 8: Apply for a: Queensland Government COVID-19 Jobs Support LoanLoans are available from The Queensland Rural and Industry Development Authority (QRIDA) to help small businesses with carry-on finance to help businesses retain staffSuccessful applicants with get a low-interest loan of up to $250,000 with an initial 12-month interest-free period over 10 years at an interest rate of 2.5%pa. Freecall 1800 623 946 or Apply online hereTo secure this loan, small businesses will need to provide an aged debtors & creditors list, Tax returns/financial statements for 2 years and a Cash-flow forecast. See details here Jobs Support LoanOption 9: Apply for Queensland Government Payroll Tax Refund/DeferralBusinesses affected by COVID-19 (coronavirus) can claim a refund of payroll tax for the past 2 months, get a payroll tax holiday for the next 3 months and defer paying payroll tax for the 2020 calendar year. See details here Link to refund/holiday applicationOption 10: $ Subsidy for apprentices and traineesSmall businesses that employ an apprentice or trainee and employ fewer than 20 full‑time employees become eligible for a wage subsidy of 50 per cent of their wage paid for 9 months from 1 January 2020 to 30 September 2020 up to a maximum of $21,000, per eligible apprentice or trainee. Contact an Australian Apprenticeship Support Network (AASN) provider here Link to applicationOption 11: Renegotiate your lease arrangementsIn a good economy, it's a difficult negotiation: i.e. because it is easy to find your replacement. But in these economy-wide downturns, landlords are generally desperate to keep you. (Laws are changing to protect you from legal action by landlords forcing them to the negotiating table)Open your communication with the landlord on rental abatements (suspend/reduce). Decide on your lead negotiator. Consider negotiating a side agreement for rent-free or rent reduction period or rent deferral. (for at least 6 months) – The government anticipates closures for 6 months.Get legal advice because each lease is different. In most leases – you can’t withhold rent. Typically 14 days after not paying your rent the landlord can terminate your lease and take back possession. However, laws are changing to prohibit landlords from taking legal action against you for up to 6 months.Given that often a small business is forced to close by government and all leases demand that you obey the law means that a ‘Force majeure’ exists where an unavoidable or unforeseeable event has occurred that makes it impossible to fulfil the terms of the lease. Unfortunately, unless this is stated in the lease, you can’t pursue this action.The ‘Doctrine of frustration’ is a more likely legal argument in negotiating with the landlord where an unexpected event occurs (without default of either party) but which significantly changes the nature of the rights/obligations of the parties then both parties can be discharged from further performance. The lesson here … Get legal advice now.Option 12: Defer bank loan paymentIf the small business has term loans, personal loans, mortgages or leases, the major Australian banks are deferring payments for up to 6 months.With the royal commission fresh in their memory, Australian banks are very sensitive to small businesses who claim, ‘hardship’, mental health concerns or COVID-19 impact. You will need to talk to your bank early. Be proactive. Act now.You may need to sign a ‘Deed of Forbearance’ and support your application with a cashflow forecast. See details here Banking Association SupportOption 13: Negotiate essential services ‘Legacy debt’Certain services are designated by the Federal Government as essential services. They are Water, Electricity, Gas and Data. These services are owned by big corporations who are very political and bureaucratic. They too are very sensitive to small businesses claiming ‘hardship’, mental health, COVID-19.With these essential services, small businesses can typically section off past debt as a ‘Legacy debt’ that they pay off over time (1 year) if they agree to pay current and ongoing debts on time.Option 14: Do nothing – Undefended processSmall businesses can take the do-nothing option in relation to debt obligations. This option is a difficult one for a creditor to pursue because at a minimum it takes 9 months and cost a lot in legal fees.The Federal government has made this option even harder for creditors because it has raised the minimum debt that a creditor can pursue through the courts to $20,000 and added a 6 months delay to any statutory demand and bankruptcy notice responses extending the whole process out to 15 months forcing creditors to negotiate a settlement with the small business.Option 15: Secure Jobkeeper PaymentsBusinesses (including self-employed with 0 employees) with a turnover of less than $1 billion and suffering at least a 30% loss on last year, can access a subsidy from the Federal Government to continue paying their full-time, part-time and long term casual employees at the rate of $1,500 per fortnight (before tax) for the next 6 monthsEligibility starts from 30 March, based on employees as at 1 March, but with first cash payments starting in early May. ATO will use the Single Touch Payroll data to pre-populate the employee details for the business. Superannuation on these funds is optional for employers. JobKeeper Fact Sheet - Register hereJobKeeper Payments for Sole TradersAs a sole trader, if your turnover has been reduced because of the coronavirus. the Government may provide $1,500 per fortnight per eligible sole traders for a maximum of 6 months.Any eligible self-employed person will get a wage subsidy regardless of the business structure used, i.e.:one partner in a partnership can be nominated to receive it,one director of a Pty Ltd can be nominated to receive it,one individual beneficiary of a trust (i.e. not a corporate beneficiary) can be nominated to receive it. JobKeeperOption 16: Appoint a Voluntary AdministratorBefore a small business owner sells assets (family home) to put into a struggling business, they should first think about the option of appointing a Voluntary Administration (ASIC registered)This appointment Buys time (about 5-6 weeks), where the Voluntary Administrator has significant power to negotiate a “Deed of Company Arrangement” that often converts Legacy debt into a repayment plan that is quite often reduced to about 30 cents in the $. Talk to an ASIC Registered Liquidators in your state.That’s it. As at 7 April 2020, these are the 16 strategies that Small Businesses could adopt in Australian to mitigate the impact that COVID-19 (Coronavirus) has had on their business.Here is a link to the webinars I am developing - TAFE QueenslandFootnotes[1] Peter Baskerville's answer to How can a business increase their cash flow?