New research from American Express has revealed the toll of the pandemic on SME owners, particularly on the extent of the sacrifices they’ve made to ensure the survival of their business. The SME Recovery Survey reveals that 81 per cent of SME owners are making personal sacrifices to ensure their business’ success. They are doing so by:
- sacrificing some or all of their wage (40 per cent)
- not making big purchases (39 per cent)
- putting either their house, business or other assets on the line in order to secure funds (32 per cent)
- dining out less (30 per cent)
- not buying items for themselves that they typically would such as clothes (27 per cent)
- reduced the amount they spent on Christmas gifts and are skipping out on a holiday this year (26 per cent each).
In relation to the last point, it was revealed that during December last year, 14 per cent of SME leaders admitted that they haven’t had a holiday within the last five years, while 69 per cent said it has been over 12 months since their last holiday.
The study also revealed that 35 per cent of SMEs have less than $5000 in savings. And, on average, SME owners said that their current company cashflow could only maintain the company’s operation for four months.
One example of the type of sacrifices SME owners are making is Sharon, the owner of Leilani Boutique, a family-run “lifestyle” in Cherrybrook. The resaearch reveals that the boutique that in pre-COVID times sold garments and accessories,had to pivot and diversify the products it sold, expanding its range to include homewares and gifts. At the height of the COVID crisis Sharon and her husband were unable to afford to give shifts to their staff and ran the whole business themselves. At one stage Sharon worked 156 consecutive days in order to keep the business afloat.
In the midst of these challenges the survey noted that SMEs are seeking ongoing support from the government (40 per cent) and greater support from consumers (39 per cent) in order for their businesses to recover.
“Small-business operators have had to take extraordinary risks and make big sacrifices in order to keep their businesses running during the COVID crisis,” Martin Seward, Vice President of Global Commercial Services for American Express Australia, said.
“Many have put assets on the line, made salary sacrifices and worked around the clock, showing they’ll do what it takes to keep their passion alive. As the engine room of the economy, it’s vital that we come together as a nation to support small businesses to help ensure a swift recovery.”