How small business is adapting for the recovery

A leading small business researcher says his work has uncovered a remarkable resilience among Australian businesses through the COVID-19 pandemic – including among some of the hardest-hit enterprises.

Ross Cameron is the founder of Cameron Research, which specialises in uncovering sentiment and trends among the small- and medium-sized business community. He says despite the challenging trading conditions, in many cases small businesses have successfully adapted to a variety of new ways of working.

“One of the research findings is how quickly business owners have been able to adapt to a new environment,” Cameron says. “Many were able to transition to working from home almost overnight. This is because they were already operating their business in the cloud and using software-as-a-service technology, which has helped smooth out the transition to remote working.”

From his research Cameron has identified a number of different strategies businesses have adopted to help them plan for the new normal.

 

Evolving business models

As well as hybrid working arrangements, digital technologies have also helped deftly switch from bricks-and-mortar to online business models.

“The best businesses in this category have now trained their customers to buy online by offering discounts or free delivery,” he says.

Other businesses are using the time to fast-track their business plans for digital transformation.

“For instance, one business owner told me he'd executed his three-year business plan in 12 weeks,” Cameron says. “He’s used this time to completely digitise his operations.”

Rather than manually opening the large volume of letters received daily, it has a contract with Australia Post to manage this for them, as well as scan the documents and send them digitally.

“This has reduced their workload and addressed safety and hygiene issues around opening mail as well,” Cameron explains.

Pivoting into opportunity

Fortuitous firms that were already selling in-demand products and services - whether sanitiser or gym equipment or push bikes – are doing well, Cameron says.

There are celebrated examples of a pivot into these types of products goods – such as Melbourne’s craft brewery and pub Urban Alley, achieving more than $2 million in revenue from a new hand sanitiser line – backed by CommBank.

Ventures that have pursued new opportunities like this are showing momentum. For instance, one textiles business Cameron is aware of now employs people to sew face masks. “Another importer I know very quickly moved into bringing personal protective equipment (PPE) in from China when the pandemic started and she has done very well.”

Strong customer focus

One of the other secrets to doing well in this environment is to keep a total focus on customers – especially those existing ones who are keeping the business going.

An example Cameron cites is a restaurateur in Palm Cove in Queensland who contributed to the research.

“He really needs to make money from April until late November, but when COVID hit in March, tourists fell away. So this business owner redoubled his efforts to focus on local trade and existing customers and has done quite well.

“He’s also spending a lot more time in the business talking to customers and he’s increased sponsorship of local sports teams. They have also freshened the menu and they are posting beautiful pictures of their food more regularly on social media. The premises were also renovated to give customers easier access from the beach front.”

Cameron says other strategies to keep going for the future include new approaches to deliveries and returns. An example is a women’s fashion retailer he interviewed, which was forced to close during lockdown and shift totally online. The business owner has offered free shipping and a no-questions-asked returns policy to maintain sales. “She’s still in the same business as she has always been, she’s just doing things differently.”

Keeping an open line to finance

In such a challenging environment, Cameron encourages business owners to stay close to their bank.

“Lenders can give small- and medium-sized businesses so much help. So don’t be afraid to talk to your bank because you may be surprised what it can do for you.”

CommBank Business Banking group executive Mike Vacy-Lyle says having access to extra funds to boost cash flow has been crucial to many small businesses during this pandemic.

“We know getting access to funds quickly can make all the difference so we're trying to make that process a whole lot easier,” Vacy-Lyle says. “We support all types of businesses across Australia, no matter how big or small, and there have been many ways we've been able to help over the past few months.”

One of these is extending CommBank’s BizExpress solution online, with a fast-tracked business lending application of up to $50,000 for existing CommBank customers. This is initially being offered as part of the coronavirus government guarantee scheme, Vacy-Lyle says.

Australian businesses with annual turnover of less than $50 million who meet the lending criteria for the scheme can receive a real-time lending decision and have access to their funds within 20 minutes, with no establishment or account fees and no repayment required for six months*.

 

Source: https://www.smh.com.au/business/banking-and-finance/how-small-business-is-adapting-for-the-recovery-20200826-p55pfw.html

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