The government’s JobKeeper program has been cited as a lifeline that has helped many small businesses that have been facing difficulties in this current pandemic-induced economic crisis to continue their operations.
This was affirmed by the recent research of MYOB, published in a special COVID-19 Edition of its Business Monitor publication, which surveyed more than 1000 Australian SMEs during the period between April and May 2020. It revealed that 84 per cent of small-business owners who were eligible for the JobKeeper program reported that the subsidy allowed them to continue trading.
In addition, majority of the small-business owners have been positive about the response of the Australian government with regards to their welfare. In fact, 71 per cent have said it has done a better job than the United States and 68 per cent says it did better than the United Kingdom.
The research also highlighted the impact COVID-19 has had on small businesses across industries. The report noted that four in ten business owners said that their business is in hibernation for six months, with a further 24 per cent reporting that their business has or will need to permanently shut down.
The research also found that 68 per cent are experiencing a decrease in revenue due to the impact of COVID-19 and One in five small businesses were unprepared for the pandemic. And 26 per cent of small businesses say the impact of the epidemic will last at least a year or two.
“The impact of COVID on the small business sector is hard to overstate, as evidenced by the data,” MYOB Economist Jon Manning said. “Some small-business owners believe their recovery will take only a few months while others are expecting it to take years.”
Manning noted that 93 per cent of small-business owners have seen a reduction in work due to the pandemic. In addition, 52 per cent of respondents say they expect their revenue to decrease by 20 per cent or more over the next three to six months.
“When it comes to projecting how businesses will come out of the pandemic, the outlook is split based on demographics and by industry,” Manning said. “By industry we can see 35 per cent of Transport, Postal and Warehousing industry believe the disruption will impact their business for up to six months whereas 24 per cent of the Retail and Hospitality industry believe it will take between one and two years for their business to bounce back.
According to MYOB, one way to help businesses bounce back faster will be to continue to support contactless payments.
“Contactless payments will speed up the circulation of money through the economy, improving business’ cashflow along the way and the bigger the transaction value, the bigger the benefit,” Manning said. “As life gets back to normal and Australia starts to rebuild the economy, the shape of the recovery will differ from industry to industry.
“Businesses will bounce back faster if they continue to drive contactless payments to manage cashflow and get paid quicker. If the velocity by which money electronically changes hands from buyer to seller gathers pace and bigger transactions are possible there is no doubt the economic recovery will speed up, too,” Manning concluded.