So, it’s happened… makeup artists across the world are out of work (*well, pretty much everywhere I’m aware of anyways). This is a frightening, uncertain time for many of us, and I am right there with you. I think the hardest part is not knowing an end date… that makes it hard to plan.
However, the reality is, coronavirus is here, and while it is, we are best of staying at home, doing our bit to stop the further spread.
Over the next few weeks my blogs will be focussed on things you can do in your business while you are at home, so that your business is primed and ready to go, with a bunch of clients ready and waiting to book you once the restrictions lift.
This is not the time to put your business “on hold” and ignore everything… remember, many of your clients are at home to, so keeping up that connection will be really important…
But, I might be getting ahead of myself here…
I know, for most artists, the thing on the top of their minds right now is “how the heck am I going to survive for the next few months without any income?”
I really hope that wherever in the world you are, your government has some form of relief package for you. The details of those relief packages will vary from country to country, but the things you need to do to prepare to claim your share will be similar.
This week’s blog post has some quick tips for what you need to do now in order to be ready to make a claim.
*Disclaimer: I am not an accountant or tax agent. Any information suggested in this blog is general only. For advice pertaining to your particular situation, please seek professional advice from your accountant.
Tip 1: Gather your records. Have a system for recording your bookings, date booked, date deposit paid, total value of booking, date cancelled, date postponed, new date etc. I recommend that you create a “snapshot” of your forward bookings as at 12 March (or whenever gatherings were banned in your country and the cancellations started rolling in). Have an idea of what the next 6 months of your business could have been had Coronavirus not happened. Of course, it’s impossible to know how many additional bookings you would have gotten, but it’s good to be able to say, for example: In the 6 months from April to September I had 28 weddings booked in for anticipated earnings of $18,000 (I’m just pulling figures out of the air here). In order to claim any benefits, you will most probably need to show that your business has been impacted, so having these figures will help your case.
Tip 2. Get any cancellations IN WRITING, so that you have a record of the original booking, the cancellation date, and the new date (if the bride is rescheduling), or the date you paid a refund (if you did).
Tip 3: Get your accounts in order. Centrelink (or whatever government authority) will probably want to see a copy of your tax return Notice of Assessment for the 2018-2019 financial year (these days Centrelink and the ATO are linked, so they should have that information readily available. They will also need to know how your business has been tracking so far this financial year. This is especially important if you’re fairly new in business and 2018-19 wasn’t that great, but your business has really picked up for this financial year.
Have a copy of your Profit & Loss (P&L) statement up to March, and then start a “coronavirus P&L” from when your cancellations started coming in. Especially if you’ve been paying out refunds.
If you have accounting software that works out these figures for you, great, but if not, time to get to work. If you have all your receipts in a shoebox, waiting to visit your accountant after June 30, here’s something for you to do while you’re in lockdown!
I am recommending to my students to create quarterly P&L’s up to the end of March, and then monthly P&Ls after that.
You can create a P&L by totalling all the money that comes INTO your business, less all the money that goes OUT of your business – both fixed expenses and variable. (for a list of possible deductible expenses check out THIS POST)
Income less expenses equals profit. Though of course, with coronavirus, if that figure is negative, it means your business has made a loss.
There are some expenses that you will need to keep paying (eg internet connection, web hosting, phone etc). The idea of the government’s relief package is that businesses keep running, albeit with no customers! So that we can just pick things up again when the lockdowns are over.
Remember, any loss you incur in your business will be applied against future profit. Here in Australia, we have 3 months of the financial year to go, so most businesses will be in profit for the financial year as a whole, but I fully expect many to run at a loss for this quarter.
Tip 4. Look at any expenses you can potentially put on hold or cancel and restart. There has been some discussion about cancelling business insurance, but if you are thinking about that, please speak to your insurer first to ensure that you are covered for any claims that arise out of past work. Also, if you have your kit covered on your business insurance policy, think about listing it instead on your home contents policy, because chances are, it will be stuck at home like you for the next few months!
I do NOT recommend cancelling your web-hosting and taking down your website. This is the time to be updating your website, working on your SEO, and getting your site optimised for the inevitable onslaught of enquiries once the restrictions are lifted.
In the next few weeks, we will be covering websites, and how to be present on social media when you have no new work to post.