A new survey reveals that despite almost one in five SMEs reporting a drop in revenue of over 90 per cent during the March/April lockdown, only six per cent found themselves exiting the business, with the majority adopting new strategies to ensure their survival.
The study commissioned by small-business advisors Realise Business, a not-for-profit enterprise empowering people to successfully run a business since 1989, surveyed 350 SME owners and reports that those in the accommodation and arts & recreation sectors experienced the biggest decline in revenue, while those in retail and professional services were least affected.
As to how the businesses that survived the pandemic have managed to do so, 70 per cent of businesses adapted their product or service offering, with JobKeeper becoming a central financial resource for cash-strapped SMEs. Those businesses that had their income reduced, or are no longer eligible for JobKeeper due to changes in the scheme, are prioritising cashflow to stay afloat.
A move to online was evident amongst 52 per cent of businesses, who are increasing online activity for sales, marketing and other business functions. Meanwhile, 65 per cent sought out professional assistance from accountants to business advisors, mentors and coaches. Shutdown also led to a transition to local products and services with 20 per cent businesses increasing their use of local or Australian suppliers during lockdown.
“Hats off to all small businesses around the country. From fires and drought to COVID-19, operating in this environment has been the toughest in a long time,” Jacqui Attard, CEO of Realise Business, said. “Their strong spirit and dedication to customers aided small-business owners to move quickly and shift to meet the changing market. Bigger businesses do not have the same flexibility.”
Despite very difficult operating conditions, and the negative affect on the economy, a high proportion (57 per cent) of small businesses remain confident on the future of their business even with almost half forecasting a revenue fall during the next 12 months. The recovery methodology to be adopted by businesses will mostly focus on business growth and new clients, followed by cashflow and marketing respectively. The accommodation sector is predicting the biggest decrease in revenue while Healthcare & Social Assistance is expecting the largest increase.
“These tough conditions will continue to put pressure on SMEs as they navigate their way out of the pandemic challenge, which day to day could swing without notice,” Attard said. “There’s never been a more crucial time to support small business and the heart of the Australian economy.”