New research from PayPal Australia reveals that Australian small businesses are getting more concerned about the country’s economy, with 74 per cent predicting a recession in the next 12 months. Despite this, 82 per cent expect to weather the storm and remain in business after that period.
The survey took note of the four biggest potential threats to SMEs over the next 12 months: high cost-of-living impacting consumer spending (59 per cent), rising energy and fuel prices (52 per cent), maintaining a steady cashflow (37 per cent), and increasing cost of materials and other supply chain issues (25 per cent).
The report shows that 71 per cent of small businesses feel the current economic climate is equally or more concerning than COVID-19’s impact on the economy, and 74 per cent say that they have suffered sleepless nights due to worries about their business.
Despite the fears and concerns, many Australian SMEs remain optimistic, with 82 per cent expecting to be in business 12 months from now, thanks to taking control of the financial health of their business. Over half of respondents, 55 per cent, said that learning from past mistakes was key, and 34 per cent say they have upskilled themselves with technology, including learning to use financial management software.
Notably, 16 per cent admitted taking the “head in the sand approach” to their finances, agreeing that they ignore the financial health of their business because they’re worried about what they’ll find out. By contrast, 66 per cent monitor their finances systematically and are closely across the details of their business’s financial position.
“If there’s one thing the COVID-19 pandemic taught us, it’s the resilience and adaptability that Australian small businesses can show in the face of tremendous adversity,” Vanessa Patrizi, Head of Small Business at PayPal Australia, said. “Despite the challenges, most small businesses expect to navigate this period of uncertainty by using past learnings and digital-first approach to prosper. It is during these times of adversity that some of the biggest success stories and innovation can happen.”
