Small businesses across Australia are finding new ways to do business during the pandemic. Dynamic business spoke to Nathan Rowe, Director of Paramount, a liquor distributor and Sendle, a small business shipping service, to see how businesses have changed on account of COVID-19.
Effects on Business
The economic conditions created by the pandemic have affected every small business differently. In Paramount Liquor’s case, the forced closure of hospitality venues hurt the most.
Mr Rowe said, “As our wholesale liquor business is 95 per cent geared to the hospitality trade, every time we lockdown, our revenue drops significantly, with all expenses still continuing on, so the effect is enormous.The effect is also enormous on all of our customers too – over 10,000 on-premise retailers including bars, restaurants, clubs and cafes, all reliant on people being able to physically visit their premises.”
Sendle is a shipping company that focuses specifically on the distribution of goods from small businesses. From their point of view, the effects of the pandemic on small enterprise trading are significant.
Sendle Chief Customer and Marketing Officer Eva Ross believes that there is a direct correlation between a small companies’ ability to take trading online and their success.
“We’ve seen small businesses that were already set up online with an eCommerce platform like Shopify or an eBay or Etsy store, really thrive during the pandemic and weather the economic downturn far better than brick and mortar businesses. The pandemic has no doubt created the biggest shift to eCommerce the world has ever seen, with more small businesses moving online for the first time than ever before.”
How the situation has changed
At the beginning of the pandemic, businesses had no way of knowing what was ahead. The only options many had was to reduce staff hours, cut costs where they could. However, as the reality of the situation became clear, opening an online store was a lifeline for the small business community.
More than 18 months into the pandemic, small companies are making the most of a situation and finding new ways to meet ends.
For Sendle, the transition of many businesses going online was a seamless one. With their business benefiting from the eCommerce boom, they found ways to help small businesses that may have been struggling.
“Being an ‘essential service’, we quickly pivoted to contactless delivery back in April 2020. We immediately began hiring more staff, especially on the customer support site, to keep up with the growing demand for parcel delivery in Australia.. Sendle very much experienced the eCommerce boom firsthand.”
“Throughout COVID, we have been committed to helping our small business customers, and growing side hustler community reduce their overheads. This is a time when many need affordable shipping the most.”
Paramount Liquor reacted to initial COVID lockdowns in a standard way, by reducing staff hours and using available government support. In the meantime, they used the time to explore new revenue streams and ways of supporting their customers.
Mr Rowe said, “We needed to do what most businesses did and reduced hours across the board until JobKeeper kicked in, allowing us to keep all of our employees engaged.
“We also launched Paramount Connect, Paramount Retail and Paramount 3PL (third party logistics) arms. COVID-19 really encouraged us to innovate and re-engineer things across the board.”
New ways of doing business
As the pandemic wears on, finding new ways of doing business has kept countless ventures alive. Adopting new approaches, financial technology, and supporting their customer base has been crucial to paramount survival.
“With ongoing uncertainty and the hospitality industry hit particularly hard, we’ve had to explore new ways to build our resilience, strengthen our relationships and maintain cash flow.
“To help our retailers keep purchasing products so they can service customers and turn a profit, we’ve introduced more flexible payment options like Zip Business — to allow them to buy what they need now and pay us over time, to better manage their inventory and cash flow amid rolling lockdowns.
“Helping our customers to keep purchasing products means they can generate some sort of revenue for their business too, with many launching online stores and delivery options during lockdown.
“This has been really beneficial to our business and our customers of course too. The more businesses that survive the lockdown, the more vibrant the hospitality industry will be when we make it through the other side. This has been the focus for Paramount Liquor — to help as many of our customers as possible make it through this gruelling season.” Mr Rowe said
Flexibility, the ability to pivot a business model and innovation appear to be critical in business survival.
Ms Ross said “Being flexible, creative and adaptable is key. Businesses that quickly pivoted online, launching online stores with eCommerce platforms like Shopify or WooCommerce were able to keep selling when the country first went into lockdown”
Advice for small businesses
Small businesses supporting one another through these challenging times is so important. Mr Rowe provides the following advice to small company owners.
“Outside of making sure that you get access to all of the government support you can leverage, ensure you’ve got a thorough cash flow forecasting system sorted to ensure you have enough cash to get you through until mid-October in NSW, and mid-November Victoria
“Embrace going digital during this period, if you weren’t selling products online before or investing in your digital presence, I highly encourage you to do so.”
Sendle’s top tops for businesses survival include:
- Embrace online: The time to go online is now! Seek advice from an eCommerce expert if you’re not already running your business online or if you need to increase your online presence. If you’re making the move from brick and mortar to online, consulting the National Retail Association for advice and support is a great place to start. There are loads of resources available there to help you begin this journey.
- Government support: Make sure you’ve carefully researched whether your business is entitled to any Federal or State government support. Every bit helps at the moment.
- Keep looking forward: Stay focussed on the certainty and stability that will eventually come when we return to some kind of normal. These conditions are not forever and only a season in the life of your business if you are able to keep going with the right financial support.
- Get your books in order: Use this time to get all your books and inventory in order. A consumer spending snapback has been predicted for once lockdown lifts and life returns to some kind of normal, so start preparing for this boom now and identify ways your business can maximise this spending snapback.
- Cut costs where you can: Look at your expenses and work out where you can make cuts or savings, such as switching suppliers or using Sendle for cheaper shipping rates during the peak holiday sales season, which is fast approaching (if you’re in the eCommerce space that is).
- Support Aussie businesses: Supporting fellow Australian made businesses, suppliers, and partners could never be more important. The more we support local and choose to do business with fellow Australians, the greater the chance we’ll all have of surviving this economic downturn. Our country is full of incredible businesses with locally made products that deserve our support.
As a final word from Mr Rowe, “Hang in there, we’re almost there!”
Read more: How to pandemic-proof your business payments
Read more: Economic downturns: How SMEs can survive