The financial safety net provided during COVID has now been withdrawn. Here’s how to stay afloat without JobKeeper payments as a backup.

One of the reasons Australia experienced less financial upheaval during the COVID outbreak was the Australian Government’s JobKeeper payments. While this blog isn’t intended to be political, there is no denying these payments helped bridge the financial gap for many businesses in 2020, particularly those affected by a downturn in payments or customers. 

However, with the outbreak contained (at the time of writing) and consumer confidence increasing, JobKeeper payments have come to an end and bankruptcy safe harbours are being withdrawn. 

If your real estate has been relying on additional payments to hold on to staff, you will need to have a clear idea of your financial circumstances and break even points so your business remains viable now those payments have finished. 

Take a look at some ways you can create better financial stability for your agency.

Spend time on financial modelling

Review your current financial position, including the money you owe and the money owed to your business. 

Look into what you need to do so you can stay solvent for the next 12 months. If it includes urgently following up on overdue payments, make this a priority. 

Book an appointment with your accountant or a financial adviser to review past performance and create a forecast. Schedule regular budgetary reviews so you aren’t slipping into the red without realising. 

Reduce overheads

2020 was a time of financial belt-tightening but there may still be places where you can minimise expenses. Online subscriptions are a good place to start; many businesses fall victim to ‘subscription creep’ and end up spending money on services they don’t use. 

Sometimes reducing expenses doesn’t mean cancelling services but reducing them. You could negotiate for lower costs, find a different, more cost effective supplier or cut back on the supplies you order. 

Be careful not to shoot yourself in the foot; some expenses deliver a return on investment in terms of time saved. Talk to your team and ask for ideas for ways to either reduce expenses or make investments which save time and therefore promote revenue growth. There could be a small cost which delivers surprising benefits. 

Build regular income

Your rent roll is the bread and butter of your agency, getting you through when property sales fall flat. 

Make this area of your business a top priority and investigate ways to grow your rent roll, either organically or with a strategic purchase. 

Create an offshore team

One way many Australian businesses improve services and profits is by outsourcing tasks to an offshore team. The cost of virtual assistants and administrative offers can be less than $10 an hour. Thanks to technology, the people you have working with you are only a mouse click or a voice message away.

Some businesses shy away from the idea of sending jobs overseas but we all know how high wages are in Australia. By outsourcing administrative tasks you can get four or five people for the price of one. As a result, you can grow your agency and bring on an extra marketing or property manager here at home. 

There are also options for part time virtual assistants who are based in Australia. These specialists will work remotely and only charge for time spent. 

Market smart

In the competitive world of real estate, standing out is essential. When your budget is tight, review what marketing collateral you already have. Perhaps blogs can be repurposed, existing materials can be given a refresh or social media content can be shared another time.

Don’t forget; happy clients are your best marketing tools. Stay in touch and let them know you’re excited to find out how you can support them and their network. You could consider some form of incentive for successful referrals so everybody wins. 

Sell to free up cash

A final option to stay afloat after JobKeeper is to sell part of your rent roll. This may be the best move for you, depending on your current circumstances and your long term plans. 

BDH Solutions are rent-roll agents with over 40 years experience in connecting the right vendor with the right purchaser. Download our information booklet on the new Victorian Minimum Living Standards Legislation