Receive the latest mybusiness news
Copyright © 2020 MOMENTUMMEDIA

1 in 5 Aussie small businesses shift focus entirely amid COVID downturn

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
27 August 2020 1 minute readShare
small businesses shift focus

As many as two-thirds of Aussie small businesses have adapted their business in response to the coronavirus crisis, but while many have been forced to tap into their cash reserves, one in five has reoriented their operations entirely, creating unique ways to stay afloat.

Allianz Australia research has revealed that despite the devastating impact of COVID-19, many Aussie entrepreneurs have reinvented their businesses, safeguarding their survival over the last six months.

One in five (20 per cent) small businesses surveyed by Allianz has altered operations entirely, ranging from adding new delivery services to creating unique discounts for pensioners and those unemployed, and even providing materials that Australians can make their own soap and sanitation products from.

Others have invested in digital operations (18 per cent), leading to improvements in web, social media and e-commerce, making it easier to help more Australians support small businesses in new ways.

“We recognise and applaud the entrepreneurial spirit of small businesses and how they have both adapted and ‘been there’ for Australians during this time,” Nick Adams, Allianz Australia chief market manager, said.

Cash reserves to run out in 2021

However, despite positive stories of resilience and bravery, many businesses Australia-wide are doing it tough and have genuine doubts about their long-term survival.

According to the research, 84 per cent of Australian small businesses have faced financial, operational and emotional challenges as a result of the pandemic.

Concerningly, over 1.1 million small businesses believe without support, their cash reserves will only sustain them until December and almost two-thirds (62 per cent) doubt the long-term viability of their business.

Similar figures were released by the ABS on Thursday, revealing that over a third of businesses are expecting to struggle to meet financial commitments over the next three months, with small businesses almost twice as likely as large businesses to be in severe financial strife. 

Responding to these findings, Mr Adams reiterated the importance of buying local. He noted that as Australia enters different phases of recovery, Allianz findings show that there is mutual dependence between businesses supporting Australians and Australians supporting businesses.

“Nearly half of Australian small businesses have experienced reduced revenue due to COVID-19 and a further one in five is not earning any income currently.

“These businesses carry great economic value, but also incredible practical and emotional value to the communities in which they are located across the nation. We all play an important part in helping them get back on their feet. That means revisiting, spending and shouting about the businesses we know and love.”

And although, for many businesses, there is a long road ahead, business owners may take some comfort from the nationwide awareness of the challenges and commitment to helping overcome them.

1 in 5 Aussie small businesses shift focus entirely amid COVID downturn
mybusiness logo
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] 

Leave a Comment

Latest poll

How satisfied are you with the SME measures in the federal budget?