Firstly, we hope everyone in Townsville and other parts of North Queensland which have experienced flooding are safe and well. To all our connections and referrers, we wanted to let you we are thinking of you. The recent events in Townsville have no doubt placed significant emotional toll on our clients located in the region and the follow-on effect could last for some time.
Unfortunately, when disasters occur in any region they impact not just individuals but also communities leading to social, economic, and environmental consequences. Most people are well aware of the immediate impacts of flooding; damage to property, destruction of crops and loss of livestock etc.
Indirect costs include the disruption of transport links, downturns in regional tourism and loss of trade for businesses. Further downtime with clean up or waiting for insurance claims all place significant pressures on our clients leaving them economically vulnerable.
In our experience the first step is to be proactive with suppliers, lenders and the ATO. Your clients will find in the most instances that they are happy to provide temporary relief in these situations. Make sure they understand the issues faced and show them that you have a clear plan in place for your client. Whilst, it may seem like the end of the road now, once the dust has settled and business returns to usual this proactive approach should have prevented issues before they arise.
The key to managing this is good communication. If your suppliers, lenders or the ATO are unaware of the situation they will continue as though nothing has happened. It is not about making promises, it is setting a clear strategy which is agreeable for all parties and ensuring it is followed through with.
Unfortunately, sometimes if the situation was already tough it may be that the business won’t be able to recover, or key infrastructure is too badly damaged to recommence work any time soon. Long delays on construction or manufacturing could result in the loss of contracts. It’s in these situations the fall out is more severe and often escalates quickly.
As advisors we should be talking to our clients at this time and checking to see if they require our support in managing the financial affairs of the business. If specialist advice is required on the options available to individuals or companies on the next steps, if it looks unmanageable, having those conversation early generally always achieve better results.
At de Jonge Read we are ideally placed to provide your client independent, honest advice which clearly shows the options available. Our initial consultations are without obligation and fee free. Talking to us may provide your client with options, or a plan B, so give us a ring.