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In limbo
Welcome to this week’s handbook for managing through the COVID-19 crisis. 

Some 150,000 Australian businesses have gone missing. 

When the Australian Tax Office admitted its $60 billion JobKeeper “reporting error” in JobKeeper estimates last month, it also revealed 150,000 businesses were stuck between enrolment and declaration, or the final step before payments start flowing.

So what happened to these businesses, 40% of which were sole traders? SmartCompany news editor Matthew investigated: here’s what he found

Meanwhile, here are five things to check off your list this week:
Keep reading below to catch-up on the pending changes in the childcare industry, insights into how the pandemic is affecting co-working spaces, and profiles of other entrepreneurs who are navigating their way through this crisis. 

Please get in touch If there are specific questions you’d like answered, or experiences you’d like to share with the SmartCompany community.

Stay safe,

Eloise Keating
SmartCompany editor

JobKeeper limbo

You could be forgiven for thinking ghostbusters was the number to dial when one of your workers disputes their eligibility for the JobKeeper program. After all, even certified posts on the ATO’s forums have fallen prey to the jurisdictional quagmire that’s emerged in the wake of the wage subsidy program.

We’ve attempted to get to the bottom of who is responsible for what under the $70 billion scheme.

Here’s what we found

Remember those 150,000 businesses stuck between JobKeeper enrolment and declaration in May? Well the deadline has now passed for them to jump onboard, but the ATO says it’s unable to say what happened to them. 

It’s the latest in a concerning lack of transparency around the operation of the program since the ATO admitted to a $60 billion “reporting error” in May.

Read our investigation here

Childcare changing

JobKeeper payments for childcare centres will end in less than a month, in the first major change to the federal government’s wage subsidy scheme. There will be a transition plan for centres, but some business owners are concerned about the cost pressures this plan will create.

“Once you introduce fees again, we don’t know how many enrolments we’re going to have, because we don’t know how much money parents actually have,” says Andrea Christie-David, director of Leor In Home Early Learning.

Read more

The changes also mean that “free” childcare will come to an end, and Australian families will once again be paying childcare fees. It’s a “snap back” to an already expensive system at a time when many families have less income, and women’s participation in the workforce will suffer.

Keep reading

To co-work, or not to co-work?

The ongoing COVID-19 crisis is continuing to cause economic difficulty for many small businesses. At the same time, many have moved to remote working, and may not be planning on moving back into the office any time soon.

That’s a perfect storm for co-working businesses such as Fishburners, which rents out desk-space to up-and-coming companies in spaces built around collaboration and community.

This week, Fishburners announced it will be closing its Brisbane space, and bolstering its digital offering instead.

“The financial viability is difficult when you’ve got a sustained economic hibernation in place,” says chief executive Nicole O’Brien. 

Learn more here.

On the other side of the coin, the founders of Sydney co-working space Workit Spaces have brought forward digitisation plans and doubled down on growth, banking on increasing demand post-pandemic.

While the business felt the initial shock of the crisis, it has a diverse client base and a dedicated e-commerce hub, which has seen continuing demand.

And, investment in the website, SEO, a video series and even new staff seems to be paying off. The business has seen a tenfold increase in enquiries.

Read more.

Not all stories have such happy endings. In May, SmartCompany spoke to Jodi Imam, co-founder of co-working space Depo-8.

When COVID-19 hit, the space lost the majority of its tenants within a week, Imam said. 

Following a failed sale attempt, the co-founders were already disillusioned with the business, and the pandemic was the nail in the coffin that caused them to close the doors for good.

Read the full story.

Quick links
‘COVID Safe’ businesses to be handed safety ‘badges’ under NSW government plan
Instant asset write-off extended: $150,000 claims to last until December 31, but it’s still not permanent
Tesla and Amazon under fire as employees contract COVID-19
COVID-19 delivers both pain and gain for Aussie retailers, ABS figures reveal
JobKeeper verdict in July as Australia prepares for first recession in 29 years
Restrictions easing

COVID-19 social restrictions are starting to ease, which means we can welcome friends and family back into our homes and start celebrating again.

That’s good news for Queensland startup Gathar, which connects dinner party hosts with chefs looking for hungry mouths to feed. 

This week, the startup has announced a $600,000 seed funding round, as it gears up to expand in Australia and New Zealand.

Co-founder Jodie Mlikota says COVID-19 has changed consumer behaviour, and we may see changes to the way we entertain.

Read about Gather here.

Australia seems to be (touch wood) past the worst of the COVID-19 health crisis, and we’re now tentatively heading back to our favourite cafes, wine bars and restaurants, all for the noble cause of getting the economy back up and running. 

For those in the hospitality sector, things are slowly improving. But some states and territories remain more open than others.

Here’s the state of play so far.

Healthy Mind, Healthy Business

You might be feeling more tired than usual at the moment, and that’s understandable if you are working harder than ever.

But what if you aren’t? Some of us have long expanses of unscheduled time on our hands, and yet, we’re feeling tired.

Find out why

In this sponsored article, small business consultant Angela Henderson shares four actionable tips to protect and reinforce your mental health during this period of uncertainty.

Read on for tips you can apply today.

Find out how cutting back from seven staff to sole trader improved Studio Marché founder Alisha Dunsford’s mental health, revenue and customer relationships in this sponsored article.

Why it was the best decision she ever made.

We spoke to Smiling Mind founder Jane Martino and MYOB chief employee experience officer Helen Lea about mental health advice for small business owners in this sponsored article.

Get their mindfulness advice here.


Small businesses are approaching the edge of a government-induced financial cliff, when JobKeeper, rent deferrals, insolvency and loan repayment pauses expire in September.

What happens when the government throws SMEs back into the wild? How will businesses respond to losing thousands of dollars in support each week?

John Batistich dives into the implications for business owners.

Emotions are running high, parties have diverging interests and there’s a pandemic in the background threatening your business. With all this in mind, what are the secrets to negotiating success during COVID-19?

Benjamin Chong takes a look at what we can learn about “winning” in 2020 and how negotiation is being redefined around the world.

Read on

In case you missed it
SMEs are ditching cash, as coronavirus fast-tracks a shift that will fundamentally change how they do business
Why the death of cash is a win for law-abiding SMEs competing with criminals
SMEs caught in a turf war, as complexities of going cashless abound
“Money isn’t there”: Businesses say Federal Court ruling will deter them from hiring casuals
Xero delays price hike indefinitely amid COVID-19 fallout for SME customers
What other entrepreneurs are doing

With events cancelled and the public locked up at home, business has been difficult for food trucks. But, new app Where The Truck is offering a lifeline.

Owned by the Australian Mobile Food Vendors Group, the app allows users to explore and find a food truck, pre-order and pay for products, and arrange for pick-ups or delivery drop-offs using a mobile drive-through service, making it easier for patrons to find the exact snack they’re after. 

Punters can also order a food truck to their street, complete with ice-cream-truck style bells to announce their arrival.

Find out more.

It’s not only Mollydooker’s business that has been hit by COVID-19. Sarah Marquis, founder of the McLaren Vale winery, spent last month in isolation and recovering from the virus herself.

But, despite the shutdown period and a smaller yield than usual, online sales have kept the winery in business. And it’s well placed to recover from this crisis, and come back stronger, Marquis says.

“I like the time to reflect at the moment and reinvent the business.” 

Read the full story here.

When COVID-19 forced state legislators to relax certain requirements around legal documents, Sydney startup Lawpath was quick to act, creating new tools for remote witnessing.

But, for founder Dom Woolrych, these changes have been a long time coming, pandemic or not. And he would like to see things stay this way.

The law is archaic, Woolrych suggests, and won’t adopt modernisation without a nudge in the right direction. COVID-19 has given it that nudge and “put a firecracker up a few areas”, he says.

Find out more.

The pandemic saw the traditional events industry grind to a halt, but not-for-profit ticketing platform Humanitix pivoted to create a virtual hub, helping thousands of organisers to take their events online.

“Almost everyone in the events industry has taken a massive hit,” co-founder Adam McCurdie told SmartCompany.

“Being able to run a digital event can be a substitute of sorts, but it’s often difficult to switch from in-person to [an] online [format].”

Read more.

Entrepreneur and co-founder of 12RND Fitness, Tim West, had a rapidly growing business and plans for further international expansion in sight for 2020.

Then, COVID-19 came along, and forced the closure of about 80 franchises, leading to a 95% drop in revenue for the business.

But, this boxing business is far from knocked out. In fact, the pandemic has been a blessing in disguise.

Here’s how.

What we're predicting and watching

It’s not strictly COVID-19 related, but it would be remiss not to take notice of the Black Lives Matter movement sweeping the US and the world, following the death of George Floyd in police custody last month.

The outcry in the US sparked demonstrations in Australia, highlighting the deaths of 437 aboriginal deaths in custody since 1991.

Predictably, we’ve seen businesses and leaders respond with varying degrees of tact and sincerity. Notably, US President Donald Trump’s tweets about the protests were labelled as inciting violence by Twitter, while Facebook’s inaction over the same comments caused employees to stage a walkout, and in some cases resign.

Elsewhere, Reddit co-founder Alexis Ohanian resigned from his position on the social media giant’s board, calling for it to be filled with a black candidate.

Crossfit, on the other hand, is facing boycott and an exodus of partners, following an offensive tweet from founder Greg Glassman, and a somewhat flimsy follow-up that did not initially include an apology.

We’ve been considering how and when businesses should take a stand in times like these. Can a founder’s values be separated from those of the business? How can a business create change, beyond getting their messaging ‘right’?

There may not be any easy answers here, but we believe there are right ones.

As we start the slow journey back to economic normalcy, we’re wondering what will become of COVID-19 side-hustles. 

Will the innovative interim solutions of the hospitality space remain once the doors are open again? Of those businesses that have pivoted, which will pivot back, and which will stay on their new course?

What we’re most excited about is finding out what new businesses have been brewing in garages and living rooms all over Australia. Have you used lockdown to launch a new business? We would love to hear from you.

The question on the lips of business owners heading into July is whether the Morrison government is going to take the axe to the JobKeeper program after deciding to cut out childcare workers earlier this week.

Finance Minister Mathias Cormann was grilled at length on government decision making around JobKeeper in the Senate yesterday, and he indicated the government won’t pursue any further surprise changes before handing down its review next month.

But you better believe there’s going to be some big changes in the wake of that review. The government is keen to reign in the program, especially amid ongoing reports Australia’s economy is bouncing back from the pandemic.

So start planning now, because the Prime Minister has shown his six-month commitment to JobKeeper is bogus. The legislation will remain, your eligibility may not.

Additional resources
Council of Small Business Organisations Australia
Australian Small Business and Family Enterprise Ombudsman
My Business Health
Department of Health