Tony Chapman of Redman & Chapman Pty Ltd, trading as the consultancy business SRA Corporate Change, said the team was “very positive about the future” having just taken on new offices in Hobart and Launceston.

“We were on track for our best year ever with considerable growth,” he said.

But when COVID-19 hit, his clients went into “crisis management mode”.

“In doing so, they deferred the work they were doing with us.”

Mr Chapman and Sara Redman decided to close up operations after 10 years of putting their heart and soul into the business.

SRA Corporate Change is one of eight Tasmanian companies that became insolvent this year; though several more are in liquidation.

Among the industries represented in the list include contractors, electrical appliances and other trades, information technology, and telecommunications.

>> SCROLL DOWN TO SEE THE FULL LIST OF INSOLVENCIES BELOW

CreditorWatch CEO Patrick Coghlan said the number of businesses entering administration or winding up were substantially, and perhaps surprisingly, lower this year.

Mr Coghlan reported only 11 administrations from January to the end of September this year, compared with 41 for the same period last year.

A similar situation emerged Australia-wide, with the usual 9,000 businesses entering administrations a year dropping by about 4,000.

He explained the real impacts of COVID-19 would not be realised while new safe harbour insolvency legislation allowed businesses to continue their trade despite being insolvent, or while JobKeeper kept businesses afloat.

“It has no doubt saved hundreds of thousands of jobs and tens of thousands of businesses,” Mr Coghlan said.

But the expert feared businesses would come crashing down next year in the aftermath of temporary safety nets, potentially bringing other suppliers and creditors down with them.

“It’s not real commerce, organisations are continuing to rack up debts they’ll potentially never be able to pay,” he said.

“It’s a danger for creditors and suppliers because it’s difficult to identify an insolvent businesses.”

Mr Coghlan said it was reasonable to assume there were more insolvent companies trading in Tasmania than those currently listed, particularly in the arts, tourism, hospitality and education sectors.

Tasmanian Chamber of Commerce and Industry CEO Michael Bailey confirmed regardless of COVID-19, each year some businesses “just don’t make it”.

“That’s the life of a business,” he said.

“About one in eight will fail.”

Mr Bailey acknowledged the “massive impact" of COVID-19 on businesses would start properly emerging after March next year when JobKeeper is cut.

Mr Bailey said during coronavirus already some smaller businesses had decided it was time to call it stumps before their financial situation could deteriorate further.

“It’s a really big decision and emotional decision to wind up the business,” he said.

“You need to keep on top of your business to understand when it is the right time to wind it up so you don’t get into the situation of getting insolvent and losing control of how you wind up.”

Mr Bailey made particular reference to the hospitality industry’s sole trader and partnership businesses.

“The one pleasing thing about the sad announcements of signature restaurants was the businesses were making that decision before insolvency happened.”

High end restaurants including Franklin, Oddfellows and CharlotteJack shut down due to COVID-19.

Willing Bros co-owner Carl Windsor said his joint decision with co-owner James Kingston to close Italian restaurant Ettie’s in July was difficult, but in hindsight the best thing for both their business success and mental health.

“We weren’t confident to sign a new lease with all the uncertainty,” he said.

“I think the timing suited us best, having the second restaurant allowed us to keep the job and keep moving along.

“Our business downsized and life has gotten better. Come the first of December we’ve had three of the busiest nights in a row since we’ve reopened.”

Mr Windsor said people fondly mentioned they missed Ettie’s to him at least five times a day.

“James and I are pretty ambitious and if the opportunity for the right venue comes up and the Ettie’s brand would fit it then we could come back,” he said.

The Tasmanian Hospitality Association board member said it was important business owners regularly checked in on each other’s mental health.

“Once JobKeeper dries up is when we’ll see the true impact.”

Mr Chapman said winding up SRA Corporate Change was not all doom and gloom.

“I am continuing to consult and am finding there is plenty of demand for my services, so I take from that, that many businesses have made it through the worst of the crisis and are now keen to move towards realising the potential of their business and their people,” he said.

Mr Coghlan expressed a similar sentiment, saying Tasmania was in a “phenomenal position” compared to earlier this year having recovered faster than other states and territories.

“If the government doesn’t end the insolvency safe harbour and JobKeeper legislation at the same time, the spike in companies entering administration should come back down sooner,” he said.

“I think companies are doing a lot better now and can probably shoulder the shock to the system that COVID has produced.”

Insolvent Tasmanian companies* for 2020

• Cassalo Pty Ltd trading as Cassidy’s Electrical | ACN: 151 601 580 | Status: In Liquidation
• Island Telco Pty Ltd | ACN: 629 778 945 | Status: In Liquidation
• Jones 97 Dairy Contracting Pty Ltd | ACN: 168 642 144 | Status: In Liquidation
• Kingston Joinery Pty Ltd | ACN: 009 587 400 | Status: In Liquidation
• NB Contracting Pty Ltd Formerly trading as Hotondo Homes Sorell | ACN: 160 507 317 | Status: In Liquidation
• Onetouch Technologies (Tas) Pty Ltd | ACN: 158 838 576 | Status: In Liquidation
• Redman & Chapman Pty Ltd trading as SRA Corporate Change | ACN: 147 697 863 | Status: In Liquidation
• XVT Solutions Pty Ltd | ACN: 099 907 865 | Status: In Liquidation

*This list covers companies only. It does not include sole traders or partnerships, which generally encompass small businesses. Not all companies that went into liquidation in 2020 were insolvent. These are the insolvent proprietary companies.

annie.mccann@news.com.au