The economic crisis brought on by COVID-19 is unlike anything the startup sector and broader business community experienced before.
The economic rule book has been thrown out the window and Australian government’s response reflects gravity of the situation, with Prime Minister Scott Morrison announcing a massive $130 billion stimulus package yesterday, worth 11% of annual GDP, in a bid to keep people in work.
While governments and central banks worldwide attempt to come to grips with the macro challenges, we want to talk to people on the frontline of business to see how they’re faring and share their advice on how they tackled the challenges they face.
Each day we’ll be sharing the story of a founder or executive as From The Frontline. We’ll kick off the series with Troy Roennfeldt, Managing Director of Increaseo, a digital agency specialising in web design, customised content marketing and social media. The business is based on the NSW Central Coast and also has a Melbourne office.
If you have questions you want to ask of founders, or want to share your own story, please drop Startup Daily editor Simon Thomsen an email at startupdaily[at]pinstripemedia.com.au
And a big thanks to Troy and the others who are sharing their experiences with us.
Managing Director, Increaseo
What’s happened to Increaseo?
Two weeks ago was quite a stressful week, we lost a number of projects that in total would have accounted for around 10-15% of our annual turnover.
We also lost a handful of retainers, where the clients asked us to pause the retainers or the clients businesses are under severe stress and it’s unclear if they will recover at this stage. We feel quite fortunate that whilst we have lost some work – last week we also started to win some work.
The work we have gained is from larger businesses and organisations that aren’t necessarily affected by the current conditions.
Have you had to let go of staff and if so, how did you do it?
We are a team of 10 people. So far we have just had to reduce one team members hours.
What’s happened to your industry because of the COVID-19 response?
As we are a digital agency and we have team members already working remotely, the social distancing and shutdowns haven’t really affected us as much as other industries.
How are you communicating with staff WFH and maintaining culture?
To try and maintain the social connection we have daily virtual coffee catch-ups and we are constantly on slack and video calls where necessary.
How are you planning for the next 6 months? What’s the best advice from your accountant?
It’s going to be a rough ride as everything is so uncertain at the moment. With our diverse range of clients across different industries and the projects that we have in place, we feel we are positioned as well as anyone. We’re being quite proactive and getting on the front foot where ever possible.
As far as far as our accountants advice, it’s all about cash flow at the moment. The stimulus package is going to be helpful in that regard.
How has your bank been helping? Are they being understanding? What’s the biggest issue you’re facing?
We don’t have any overdraft or finance in place, so nothing for them to help with at this stage.
How are you going collecting on any outstanding invoices? Any tips for getting paid?
Over the years we’ve never really had a problem with outstanding invoices. I imagine a handful of our clients are going to under serious financial stress in the coming months, we’ll try and work with them as best we can. Any new projects moving forward, we will be a lot more cautious and will be sure to take deposits for projects where we may not have in the past.
How have you approached sharing your issues with you partner/family?
I’ve always been open with my wife around how business is going, it does stress her out sometimes – but I think it’s best if we are open about that.
Whilst the current business environment is stressful, we both feel grateful and appreciative that we are healthy, and we are in a position to be able to help others out.
How a spouse/partner can support a small business owner under this stress?
Listening. I’ve probably talked my wife’s ear off about a number of things that don’t particularly interest her, but I’m appreciative that she listens to me anyway.
My wife works in aged care mental health, which is going to be an increasingly needed role in the coming months and we have 2 primary school-aged children, so really at this time in particular we both need to support each other as our regular routines and schedules have been thrown out the window. This means a lot of late nights, early mornings and a lot of juggling of household duties.