Your Financial Reality thanks to COVID-19. How to Cope
If one thing is for sure, it is that everyone across the world is being affected by the COVID-19 pandemic in not-so-pretty ways. For many business owners in South Africa, and particularly small businesses, this time has been particularly harrowing and difficult. Sleepless nights have become the unwelcome norm.
The lockdown was great. Till it wasn’t.
While we all commended our President Cyril Ramaphosa’s swift and stringent approach to the pandemic, as the weeks have worn on and the economy has continued to buckle under the weight of the lockdown, many of us have changed our opinion.
Though 500 Billion Rand has been earmarked to bring relief to South Africans, the reality is that this is a loan that needs to be paid back, with interest. South Africa has a negative credit rating, which means that we are going to be paying dearly. That is you and I – taxpayers – we will be paying dearly.
This for an already financially burdened business and individual, makes for unsettling future prospects. Unsettling enough for some to render the future entirely hopeless.
Making plans. Moving forward…
We may be in Level Three, but the edge of the woods is not yet at all near. Knowing that the knock-on effect of a complete shutdown will only now make itself truly apparent, what can we as business owners do to survive this – an economic emergency? Let’s take a positive look…
Here are some tips for businesses:
Try not to shut your doors.
You may be sitting with the burden of debt and it may be impossible to pay your rent or staff, however try to tripple along if you can until business picks up. You may need to slash costs or scale down, but try to keep your brand and your business entity alive. As business improves you will be glad you did. Starting again is a lot harder than it may seem.
Help each other.
We’re going to need to return to ‘community’. This means that in our circle, we must as far as possible help each other. Give away a portion of your time and skills or help network someone else’s business including your own. If everyone returns these favours to each other, we will be able to build stronger relationships and improve our chances of surviving.
Keep open relationships
That landlord you owe rent to, the bank, the internet service provider? Let them know about your situation. So many people and businesses are struggling that someone battling to keep their heads above water is no longer unexpected news. If you keep your creditors informed of where you are, you will find that for the most part, they will be willing to help you out somehow.
Plan ahead NOW!
One of our greatest failings both as businesses and individuals, is our failure to plan ahead. We don’t believe that this is the last global disaster we’re likely to see. There will be more situations similar to this in the future, so the time to prepare is now. The old recommendation is to save. And this recommendation hasn’t changed. Whether it’s R 50 or R 5000 – save a little every month and build a reserve that you can tap in to when you need.
And a key tip for individuals:
Save. That is the one key takeaway, or lesson from all of this. If your salary was cut but you had savings, you would have been able to cope. Saving money in our current economic times is hard, but every little contribution is something. At a time where even R 500 would have helped you put food on the table, imagine how little it really takes to save that amount. So save as much as you can afford for another rainy day.
The last word from MSO Accounting Group…
We are here to help. So many of our customers have wanted to cut off our services because they have been struck with major financial difficulty, and we have said no, we will continue to help them even if they can’t pay right now. We know that things will change and those relationships we have are very important to us. As we said above, we are all in this together so let’s help one another where we can.
As the economy returns to the new normal – let’s take a look at your finances and help you plan ahead. By looking at your books, we can see where you can improve your financial standing and help you to save.
We can help you financially navigate your way through difficult periods in your life. As cliché as you may feel this sounds, we’re about building a long term relationship with every one of our clients. So let’s talk today.
Email us on office@msoaccounting.co.za or ring 082 430 6016 to arrange your consultation.
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