Where to after Covid-19?

The Impact of Covid on Small Businesses in Australia

Introduction

The effects of the Covid-19 pandemic have been felt across the world, and Australia is no exception. In particular, small businesses in Australia have been hard hit by the economic shutdowns and social distancing protocols that have been put in place to slow the spread of the virus. This article will provide a look at how these businesses have been affected and what is the ongoing effect post Covid-19.

The Impact on Small Businesses Generally

As with other countries, Australian small businesses have suffered greatly during this pandemic. The Australian Bureau of Statistics (ABS) reported that 577,000 jobs were lost between March and May 2020, with more than half of those losses coming from small business owners. Many of these businesses had to close their doors due to restrictions on movement. During the pandemic, being able to pivot was crucial. Manufacturers turned to making masks, protective shields, rubber gloves and other ”Covid merchandise” This revenue stream was never going to maintain its momentum, so businesses had to look to the next pivot or hope business returned to normal soon.

The government stimulus and support programs managed to keep many of these businesses open, however as these programs wound down, businesses had to look to other resources to stay afloat.

The Impact on Retail Business

Even before the pandemic struck, businesses were looking to online sales to boost their businesses and compete. With the onset of the pandemic, suddenly online was the only way people were shopping. Business owners who were well set up in e-commerce were quick to capitalise while others had to play catch up. Some still have not adapted.

The Impact on Manufacturing

Suddenly, with the effect of lockdowns been felt around the world, there was a supply chain crisis. Factories had been down on production, either because they had been locked down or their staff were home sick. This led to short supply and was the beginning of the inflation crisis now devastating economies.

Availability of Staff

For one reason or another, businesses were hit by staff shortages. Almost all industries were struck by this, however physical service business were severely affected. Pool services shops, landscaping businesses, general maintenance businesses, just to mention a few, suffered greatly. Work couldn’t be taken on, cost of wages went up as staff were poached and inexperienced staff left after only a few days as the pressure was too much.

Good News

While many businesses suffered, others did well. Here’s a list, which is by no means exhaustive:

· ??Suburban cafes and bakeries (people working from home and supporting local businesses)

· ??Business associated with take away as opposed to sit down meals (Pizza for example)

· ??Mortgage brokers, financial planning businesses and insurance brokerages

· ??Courier businesses supporting the online economy

· ??Businesses supporting home working, like technology equipment suppliers and other IT related businesses

· ??Real estate, both sales and property management.

Winners and Losers

The losers were those that relied on personal contact to make business.

The winners were those that could operate from home and whose industries didn’t have to close down during the pandemic.

Lessons Learned:

· ??Maintain a strong culture within your organisation (helps with retention)

· ??Be nervous whenever you feel comfortable.

· ??Plan and train for the next future shock scenario

The Future:

As this article reflects, the future of business belongs to those who can:

· ??Adapt and pivot quickly (small business thrives here)

· ??Run businesses offering above award wages

· ??Create a culture where staff are not simply motivated by money

· ??Provide flexibility to staff

· ??Maintain a good balance between employed and contracted staff.

· ??Deliver their service through many different avenues

Australian business might look the same to you, but sadly the landscape is littered with failed business, bankruptcies and devastating personal loss. Empty shops and offices will be re-tenanted. The great Aussie spirit will prevail. We hope those same survivors will share the lessons of survival they have learnt. We learn most from our periods of hardship and challenge.