Six things to consider right now

Small business owners need to be aware of these things as we head into level 2, writes Nigel Smith.

1. There will be significant redundancies. Even good businesses are planning to trim the fat. We saw after the global financial crisis in

2007 just how much fat many businesses did have.

2. Cut hard and early if in doubt. There will be labour looking for jobs for a while to come. Re-employ well when the time comes.

3. Look at each part of your business and work out if it’s profitable: it may be time to shut down the underperforming parts.

4. In Australia, all the issues with commercial leases were dealt with at a state government level. This saved a lot of hassle and also lawyers and valuers clocking up bills. Quick and decisive. We need that in New Zealand.

5. Apart from tourism, the most adversely affected sector is clearly hospitality. Most hospitality outfits are small businesses. I have to commend the commercial landlords for these guys who in so many cases have said without hesitation, three months rent-free, then three months at 50 per cent as long as they pay the outgoings. It’s generous, but needed. Many may still not make it. There may be a lot of vacant hospitality space coming up and landlords are doing whatever they can to keep these businesses open. Well done.

6. Finally, there has been a lot of honesty in the conversations. We have all felt tired, depressed or stressed. It’s not been easy. This is unprecedented and as I said to someone it’s like doing 1987 again in home isolation. It’s the lockdown that makes the economic parts all the harder, and vice versa. Hang in there and, if you are feeling stressed, do talk about it.

Nigel Smith is a recognised specialist in taxation, commercial advisory and trust services.