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How COVID has impacted small business

In Australia, 4.8 million people are employed by small enterprises, accounting for 45.7% of the country’s workforce.  But when the pandemic came, 70% of them reported a revenue decline. 

According to Shane Perry, SME loans analyst at Max Funding, “A small business is vital to the economy because they’re the ones that can quickly adjust to upturns and downturns. When the economy is strong, hiring begins with them. And during the recession, they’re also the first to cut down spending and conduct layoffs.”

The contributions of small businesses to the economy and sense of community can be seen in the Australian Leadership Index, which shows that their ALI Score has continuously increased last year. The ALI Score is a measurement of a business’s direction for the greater good.

Small Businesses and Connections

Many Australians believe that small businesses are more ethical, accountable, and transparent compared to larger enterprises. The former also tend to be more responsive to the needs of the community and sub-groups within it.

Surprisingly, the COVID-19 pandemic created positivity towards small businesses, as consumers realise their contributions and deeper connections to the local communities.

So, what did most small businesses do to stay afloat during these uncertain times?

small business

Adoption of e-Commerce

Many businesses without an online presence were forced to adopt digital channels to continue operations. Those who don’t have a complex virtual store can take advantage of the e-commerce tools offered by large marketplaces, such as Alibaba, Shopify, and Etsy.

Adapted New Business Models

Sometimes, survival necessitates doing something you had never considered before. Many businesses expanded their products/services and offered deliveries, while others offered their space and equipment for other purposes. Take for example the schools and fitness centres that started offering online classes.

Wield Social Media

According to a study, 71% of Australia’s population is active on social media. Social media now plays an integral role in our life—a strong factor in our personal and professional decisions. Small businesses that figured out how to properly exhibit their value via social media are reaping the rewards now.

Ultimately, a small business may be the key to Australia’s economic recovery with the support of the government and sustainable partnerships between SMEs. It is also time for consumers to reflect on their purchasing behaviour.

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