With only three weeks left until the end of the year, Australia’s small business sector continues to navigate the volatility of our COVID reality. We certainly weren’t alone last Christmas in hoping that the worst of the health crisis was behind us, but this year has proved to be another challenge.
The impact of lockdowns, supply chain issues, border closures – as well as the necessity of business transformation to meet changing customer needs have put businesses under immense pressure.
For some, the pandemic has been a period of unprecedented growth, an opportunity to evolve and transform at a rate that would have been unthinkable two years ago. Others have not been so lucky.
As the end of the year approaches, businesses have an opportunity to review, reset and plan for the next phase. Agile business models, expecting and indeed planning for volatility will ensure businesses are ‘match fit’ to meet the challenges, and opportunities ahead.
WHAT CAN WE EXPECT?
The SME sector will again be the key driver for our economic recovery. Businesses that invest in futureproofing, are strongly prepared both strategically and financially will have the edge over their competitors. With this in mind, we’ve taken a look at some of the current factors at play, as well as opportunities for businesses to evolve and succeed in the next phase paralleled global disruption.
CONTINUED ECOMMERCE GROWTH
The exponential growth of eCommerce is a definitive outcome of the pandemic. Online shopping grew 20.8 per cent year on year in the 12 months to 30 September 2021. This trend is expected to continue with social media commerce presenting a specific growth opportunity for businesses.
AGILE, DIGITALLY NATIVE BUSINESS MODELS
Another response to the evolving needs of consumers during the last two years has been the foundation of new (and reinvention of existing) businesses in the online space. Entrepreneurial, digitally native businesses are thriving, with Australia seeing unprecedented growth in new business formation, changing the competitive landscape.
Embracing digital transformation by investing in technologies that enable automation, AI, personalised customer experiences, hybrid ways of working and collaboration tools will increase productivity and high-functioning business models. Greater proportions of businesses online will drive data customisation and hyper-personalised experiences that drive loyalty, attract and retain customers and boost spending.
INCREASED CONSUMER SPENDING
According to ABS December statistics, the household savings ratio is at almost 20 percent due to continued employment (for most) and much of the stimulus packages and government effectively being ‘stored’ through household and corporate savings. Consumers ready to spend their disposable income, following curbs on spending due to lockdowns and restrictions, are set to aid the economic rebound predicted for 2022.
Labour shortages and supply chain issues are expected to abound well into next year however, we can expect to see some reprieve as air travel starts up and the effects of lockdowns recede. Businesses may also look to invest in relationships onshore as well as holding inventory to guarantee supply. Skills shortages are likely to reduce as foreign working visa holders are allowed back into the country and the tourism sector comes out of hibernation to give the economy a further boost.
HOW CAN BUSINESSES FUTUREPROOF FOR 2022?
A thorough review of business performance along with a forward-thinking business plan and good cash flow will ensure business can act on opportunities as they arise. Ask yourself;
How has COVID changed your business?
Review your products, services, staff and customers and plan ahead to capitalise on successes and strategic growth opportunities.
Are you digitally ready?
With more SMEs (and consumers) online than ever before, businesses must ensure that plans are laid to evolve in the space via investing in emerging technologies as well as pursuing online growth strategies.
Do you have the right financial support?
Look at the cost structure of your business when planning for the next phase e.g. are you required to hold more inventory or equipment to negate increased transport costs or supply shortages? Do you have good cash flow and the funds to act?
The last two years have demonstrated just how quickly change and transformation can occur. Strategic planning for the next phase of COVID reality is critical. Businesses that are forward thinking, agile and responsive to the changing needs of their customers have the opportunity to experience large scale growth as the economy recovers.
Good cash flow is a key enabler for business growth. To find out more about Apricity Finance or how an invoice finance facility could help your business adapt to changing conditions by giving you access to the funds from your invoices as soon as they are issued visit apricityfinance.com or call 1300 277 424