Online channels now generating most of SME revenues

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Australian small businesses are optimistic about 2022 as they are target the eCommerce boom for growth in the year ahead. According to the latest Entrepreneurial Pulse research from GoDaddy, Australian entrepreneurs and small-business owners are positive about the new year and eager to harness the digital skills they developed during the pandemic. And despite 30 per cent of respondents saying a return to lockdown is the biggest concern they face in 2022, 66 per cent are either optimistic or very optimistic about their small business’s prospects, while just 10 per cent are either concerned or very concerned.

Furthermore, 45 per cent reported that they are no longer feeling the financial impacts of the pandemic, while a further 46 per cent expect to feel the impact for the short term in 2022. However, nine per cent believe they’ll be feeling the impacts longer-term, until at least 2023.

“While the last 20 months have been an unprecedented challenge, the enduring themes in the small-business community have been resilience, adaptability and innovation,” Tamara Oppen, Managing Director at GoDaddy Australia, said.

“Small businesses aren’t just focusing on their online presence and eCommerce offering to overcome short-term challenges, but rather create long-term growth strategies,” Oppen added. “With a fresh year ahead, we’re excited to see these everyday entrepreneurs and small businesses reach new heights in the ‘new new’.”

The research also noted that digital transformation has been crucial for small businesses navigating the pandemic. 62 per cent said having an online presence is either “more or much more important” than having a bricks and mortar store, while nine per cent said a physical location was more important.

According to respondents, an online presence is now responsible for, on average, 53 per cent of a small business’s annual revenue. For 23 per cent of respondents, 100 per cent of their total business revenue comes from online sales. And 46 per cent said they believe a business cannot succeed today without having a website.

The research also noted that 52 per cent feel more confident in their digital skills due to the global pandemic. Many business owners added a wide range of functionality to their website in the last year, including social media integrations (according to 24 per cent of respondents), shipping and delivery services (21 per cent), and adding an e-commerce page or online store (17 per cent).

Online retail is the greatest focus for small business expenditure in the coming year, with 27 per cent planning to invest in an eCommerce website or online store. Of those surveyed, 72 per cent are focusing on selling locally, 35 per cent selling nationally and 13 per cent selling overseas.

Other common areas for investment include enhancing their existing products or services (23 per cent) or developing new products or services (22 per cent). Reflecting the rising value of an online presence and the ongoing volatility of the pandemic, just one in ten small businesses are considering investing in their premises, such as their office or their retail space.