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Poor resilience costing Aussie businesses $50bn annually

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
26 May 2020 2 minute readShare
Poor resilience

Nearly half of Aussie small businesses have seriously considered closing their doors as a result of a series of natural disasters, which culminated in the coronavirus pandemic in March, new research has shown, suggesting also that small businesses are losing $50 billion annually as a result of poor resilience.

The findings of Reckon’s Resilience Report have shown that years of drought, the recent bushfires and the current COVID-19 pandemic have had a major impact on Australian small businesses, with 47 per cent admitting they have seriously considered closing their doors permanently.

On top of that, 1.8 million (78 per cent) small businesses said they are feeling additional pressure due to COVID-19.

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Reckon’s Resilience Report finds a link between resilience and the success of Aussie small businesses, suggesting that small-business leaders who rank highly for resilience are twice as likely as to be financially successful.

The research measured levels of resilience in more than 1,000 people across Australia using the Brief Resilience Scale, which defines resilience as the ability to bounce back or recover from stress.

 

Reckon found that while small businesses are undoubtedly suffering as a result of the coronavirus crisis, 74 per cent believe they are highly resilient, with nearly two-thirds noting that it doesn’t take them long to recover from stressful events.

“Running a business is extremely rewarding, but success sometimes comes at the end of a bumpy road. Things have been tougher than usual for Australian businesses recently — from drought to fire and a global pandemic. That is why it is more important than ever for us to talk about resilience and what it means for the small-business sector,” Reckon CEO Sam Allert said on occasion of the report’s release.

Looking at the impact of poor resilience, the data revealed that more than half of small-business leaders have lost money, with the average leader forfeiting $21,832 in the last financial year as a result of missed opportunities.

With more than 2.3 million small businesses in Australia, poor resilience could add up to a cost $50 billion annually, Reckon warned.

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“The findings suggest that being able to identify and use all the right resources to succeed professionally and personally is a hallmark of the most resilient small-business owners. Those who do so are naturally better at bouncing back during tough times,” Mr Allert said.

Referring to the report’s findings on how Australian small businesses build resilience, Mr Allert emphasised that resilience can be developed.

“Anyone who has ever faced a challenge and come out stronger will know exactly why the experts say resilience can be developed. Resilience is a skill and — like any skill — it can be learn[t] and improved,” Mr Allert said.

The report sheds light on how Australian small businesses develop resilience, with more than half (51 per cent) of small-business leaders defining resilience as knowing how to tap into tools and resources for support.

Small-business leaders cite a wide variety of external resources for learning and practising resilience, with the top five being mentors (33 per cent), business and financial experts (16 per cent), books such as self-help guides (16 per cent), mental health professionals (16 per cent) and online resources (10 per cent).

Additionally, highly resilient small-business leaders tend to use technology to their advantage, being much more likely (90 per cent) than their counterparts (70 per cent) to think advances in technology make running a business easier.

“The findings suggest that being able to identify and use all the right resources to succeed professionally and personally is a hallmark of the most resilient small-business owners. Those who do so are naturally better at bouncing back during tough times,” Mr Allert said.

“Those who can identify and draw on the right resources will find the going easier. They can tap into JobKeeper-ready payroll software or engage professional accountants to quickly access the government stimulus funds and retain staff through the current challenging circumstances. They’ll be much more likely to bounce back.”

Poor resilience costing Aussie businesses $50bn annually
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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