New research has found that one in five Australian business owners took a hit to the bottom line in this summer’s heatwave, facing a double whammy as customers stayed at home and energy bills soared.
OnDeck’s Heatwave Healthcheck, conducted by independent research house YouGov, surveyed 300 small-business owners about trading during the December-February summer period – which saw boiling temperatures of almost 50 degrees Celsius in parts of New South Wales and Queensland. The prolonged heat smashed records with nine consecutive days of heat, reaching more than 20 degrees above Sydney’s average.
The sweltering summer season created headaches for thousands of business owners, with almost 30 per cent saying their business performed worse than the summer before and almost the same number unhappy with their level of trade over the period.
Some reasons cited for a drop-in business were lower foot traffic as customers stayed indoors, it being too hot to work outside, heat and rain damaging stock, and hot and bothered customers being in a bad mood.
Cameron Poolman, CEO of small business lender OnDeck, said the results reflect the number of variables small business owners must contend with to succeed.
“Extreme weather is one of many ups-and-downs that small business owners face. It shows why cashflow management is so important, but also why businesses need to be agile and respond quickly to opportunities as they arise. A business that sees an uptick in demand for swimwear, for example, may not have cash on hand for more stock, so we can loan them funds to stock up in as little as one day.”
Poolman said one in four OnDeck loans were used for purchasing stock or inventory, with business expansion, more staff, marketing and advertising the other top reasons.
“We want to increase the number of businesses who are growing, and that’s what we’ve built our offering around,” Poolman said. “Australian businesses need more flexible financing options that better suit their commercial circumstances.”
Fortunately, the rising temperatures weren’t all bad news for small business: 44 per cent of respondents were happy with their summer trading period and 35 per cent believe their business performed better this year than last. Businesses that cashed in on the heat put it down to several factors, from demand for summer stock through to customers coming in for free air-con.
Inside Small Business