It takes about 3 minutes to read this article. You will find economic forecasts, tips to shift your business model and links to the Australian government key support schemes.
COVID-19 situation and forecasts at the global and Australian levels
As the world is shaken by the viral pneumonia from Wuhan , business model innovation is key for survival. The figure below provides a summary of the current pandemic situation.
In Australia the University of Sydney suggests that Covid-19 may peak in late-April 2020 and be controlled by July 2020. Our simpler epidemiology model below generally agrees with these timelines albeit active cases may be overestimated using our model. The current lockdown is likely to continue for a few months.
Meanwhile, the global economy is in a bad shape: Australia already has 700,000 unemployed people to-date. The Bankwest Curtin Economics Centre estimated that Australia may lose extra 670,000 jobs by June 2020 if trade restrictions continue. The figure below shows their timelines per State and territory.
What can small-medium enterprises and the community do for the coming months?
The media continuously promotes business model innovation is key to business survival during COVID-19. And yet, it is the most difficult of the three types of innovation to accomplish, even for corporate giants.
1 . Product innovation
This innovation is triggered by new technologies or insights about customer needs. It may involve:
- creating a new product (Guerrilla Tacos emergency kits)
- adding an innovative feature to an existing product (Netflix party)
- improving an existing product features (Dyson ventilators)
2. Process innovation
Process innovation combines capabilities, methods and technologies to change how a product or service is produced and delivered. Think of what company accuRx enabled with its digital GP consultation and tools.
3. Business model innovation
Business model innovation is a business-wide transformation that can change everything from products to operations. The Harvard business review gives several options for it, which can be seen as tips:
- Less is best: focus your attempts on products and services for specific customers with defined needs. IntiGo went from taxi start-up to online grocery delivery company.
- Use what you have: can your products, processes and capabilities be used for something else? 3D-printing company Markforged is making equipment for COVID-19 testing.
- Edge your bets: select an assortment of products or markets that reduces your risk. The UK Department of Transport is increasing its portfolio using on-demand services.
- Control, fairness and integrity: do not let private objectives damage other aspects of the business value chain. Facebook is now keeping a keen eye on advertisements or claims about the COVID-19.
Businesses and individuals may access their government or States COVID-19 funds to relieve financial pressure, prepare for the aftermath and reinvent themselves. Here in Australia we have:
- JobKeeper Payment: if legislation is enacted, even businesses without employees (directors only) may be eligible. The first payments would start from the first week of May 2020 onward. Businesses should consult the guides on the Australian Taxation Office (ATO) website.
- Increased instant asset write-off: the instant asset write-off threshold has been increased to $150,000. Access is expanded to include businesses with aggregated annual turnover of less than $500 million until 30 June 2020
- Backing Business Investment: new, not previously held entities may deduct 50% of the cost of eligible assets installed from 12 March 2020 onward. Existing depreciation rules applying to the balance
- Increased and accelerated income support: self-employed individuals may be eligible to access $550 per fortnight through Centrelink Jobseeker payment. You can register your interest on myGov even in absence of a Centrelink account
- Assistance for affected regions, communities and industries: businesses in regions heavily reliant on tourism, agriculture and education may be eligible to access a $1bn scheme
- SME Guarantee Scheme: Government guarantee of 50% to companies (turnover up to $50 million) for new unsecured loans aimed at cash flow needs . Businesses should apply through their financial institution
- Early access to superannuation: People can access up to $10,000 from superannuation in 2019-20 (from mid-April 2020 onwards) and a further $10,000 in 2020-21. You need to register your interest at myGov via the ATO
- Tax support: the ATO is providing case-by-case relief from some tax obligations. Businesses should contact the ATO directly on 1800 806 218 to request this help
Indive Analytics can help you navigate unfamiliar waters during these uncertain times, including accessing funds and innovating your business model.
Contact us at firstname.lastname@example.org for a free consultation.