COVID-19 and the country’s lockdown hit small businesses very hard. In response, the Government introduced the Wage Subsidy Scheme to support SMEs with their wage bill, and ensured they had access to cash, with more than 50,000 businesses accessing the interest-free loan scheme.
While all of that helps, enableMe’s Hannah McQueen says that what business owners need right now is tactical support, and a clear strategy that takes into account both their personal and business cash burn, so they can understand their options, what needs to be done in what order, and whether cheap Government-backed loans will change things, or just delay them. In many circumstances, their house is literally riding on this, which means there are big, hard decisions that will need to be made very quickly.
As Hannah explains, although you may have a very good accountant, if your actual personal finances are in disarray, getting the company books alone is not sufficient. The owner’s personal finances need to be addressed, along with their personal money behaviours, mindset and strategy – or lack thereof – which is where enableMe can help by delving into the owner’s personal situation.
Because businesses have many overheads besides wages, government loans may simply push more debt onto the balance sheets of small businesses, and Hannah says it’s there the trouble lies. There is major dysfunction in the management of the books of small businesses, and pumping more debt, into them will only mask that.
As she says, “When we’re sailing head long into a recession, SME owners need to do more than get more than the company books in order, they need to get their own house in order, too”.
Hannah McQueen is a Fellow Chartered Accountant with a masters in tax, Authorised Financial Advisor, a personal finance author and the founder of enableMe Financial Personal Trainers, so for more information on financial advisors Wellington, financial planning NZ and certified financial planners please go to http://enableme.co.nz .