Covid19 – affecting Australian business
The impact of coronavirus (COVID19) is spreading to global supply chains, with contractors warning clients of potential delays on projects because factories have closed in China.
China is the source of many materials used for contracts and projects in Australia.
China, in an effort to halt spread of the virus that has so far killed 909 people and infected 40,235 – was due to end on Monday, I doubt that this will end anytime soon, and the supply chain issue begins.
Many basic contractors from cleaning to logistics, from builders to childcare rely on overseas supply chain to assist in the operation of their business. This has been brought to a sudden halt.
This means a business that was already struggling and had maximised their lending to push against the potential recession looming, have found themselves unable to lend more. The lending sector have had a massive knee jerk reaction to the Royal Banking Commission in 2019. Lending has been basically put on hold for many of the small businesses that used to get lending just by making a phone call or walking into their local bank.
As a contractor or an employee, if you depend on the Asia supply chain or not, you WILL be affected. A stop in work means no pay. As a contractor you pay yourself so, no work over a period of time can be catastrophic for the business, employees…. etc.
Now let’s cover tourism and just your everyday business and work.
Employers are asking workers to take any leave they have built up, including any long service leave they have accrued to cover this initial period. They hope this will cover the initial period and a vaccine is produced to assist with panic that is happening. If not, the unfortunate situation is that the workforce could be shed as the most feasible solution to deal with the lack of work or customers.
The Australian prime minister has implemented a self-isolation period of two (2) weeks and a ban on cruise ships for the next month (I think this will increase).
Cruise ships bring in tourists which spend big to the tune of $1.5 BILLION per year now add the self-isolation which means people will not travel if they have to self-isolate means that $1.5 billion will turn into $10 or 30 billion in lost tourist revenue (This is a conservative guess, 2018 produced around $210 Billion from tourism). This is just until we can get a handle on the situation.
This means as a business if you don’t have a good reserve or a good profit float to see out the next 12 months any and every business is on notice.
What can YOU do now? Is this just a push to far for your already struggling situation?
Are you struggling as a contractor, business owner or just personally? Then please get in touch with the team at Armada Advisory. We will get a good understanding of your situation and circumstance and we will work with you to find a solution.
Personal and Business insolvency is a difficult undertaking and you need to speak with an expert. It is also important to point out that catching a potential issue earlier will result in more solutions being available so please don’t delay.
Armada are proud of suppling a FREE consultation and assessment to ALL those who make contact.
Go to the home page on the website for more info and to submit a web form.
This is going to be a difficult time and even when we get through this Coronavirus struggle, we still have to deal with the potential of facing a recession. Have no doubt we are going to be facing a difficult 2020. You are not alone.
The first step is always the hardest one and the hardest step is the one that will remove most the stress.
My team and I look forward to talking with you and finding some light at the end of the tunnel,
Carlo
Carlo Napolitano
CEO – Armada Advisory
1300 391 819
