While the small business sector has been hit dramatically by the effects of COVID-19, they may also be our ticket out of economic distress.
Small and medium sized businesses employ 4.8 million Australians (44 per cent) and are a major GDP contributor (57 percent). Employment growth in small businesses accounted for approximately 60 per cent of total employment growth in the private sector between 2013-2018.
However, the pandemic has had devastating impacts to small businesses both globally and in Australia. In a new study from GoDaddy, 77 per cent of survey respondents reported reduced revenues and 37 per cent endured forced closures. However, often described as Australia’s “economic engine room” small businesses will be a major contributor to bringing Australia out of economic decline.
Suzanne Mitchell, the Director of Marketing at GoDaddy Australia agrees that small businesses will be a driving force in rebuilding the Australian economy.
“Resilience, dynamism and determination are terms that define Australian small businesses more than ever before,” says Ms Mitchell. “In the face of a year defined by challenges that few could have predicted, we’ve seen our small business community adapt and pivot to help set themselves up for success.”
SMEs have historically been a primary driver of growth. According to a 2015 report from the Department of Industry and Science, companies less than two years old created 1.44 million net new jobs from 2006 to 2011.
While only 11 per cent of Australian small businesses have managed to increase in revenue during the pandemic, 87 per cent are predicting full recovery within the next 12 months. The survival of Australian SMEs is imperative to rebuilding the economy in a post-COVID world.
The pandemic has undoubtedly caused major disruption to lives, both personally and professionally, but some small businesses see the situation as an opportunity rather than a challenge. Gabby Simoni, who leads marketing at Australia’s Golden Outback, a not-for-profit tourism board in Western Australia, believes that the disruption to international travel will encourage Aussies to fall in love with what their own country has to offer; supporting local businesses with their tourism in the process.
“The tourism industry has been disrupted by this global pandemic, and we’re no different,” Simoni says. “At a time when we’d normally have begun the bulk of our activity, restrictions were enforced and travel almost entirely ground to a halt. However, as the majority of Australia begins to return to some semblance of normality and interstate travel becomes more feasible, our optimism about the future as both a business and an industry is really growing.”