Published on the 30/07/2020 | Written by Jonathan Cotton
Businesses on both sides of the Tasman are preparing for the rough road ahead…
The latest MYOB Tech Report finds local businesses facing big challenges – but eager to meet them head-on.
According to the report, flexible hours, developing continuity planning, using new technology and buying from local rather than international businesses are among the key changes SMEs are now considering.
“The COVID-19 pandemic has forced businesses and their employees to change the way they work and as a result, many are now reassessing their operations,” says Ingrid Cronin-Knight, MYOB New Zealand country manager.
It’s just about rising to the challenge of the moment.
“Because technology has enabled businesses to do things differently – some much more so than before – many SME operators are now more open to reimagining how they plan to work in the future.”
For many that means finding ways to run a leaner operation.
According to the report, almost half of the businesses surveyed are now allowing staff to work from home at least part of the week, almost a third are considering reducing or closing physical premises to focus on online sales, and one quarter are planning to introduce more technology to reduce dependence on human workers.
The driver behind the belt-tightening is undeniable. According to MYOB’s Australian figures, less than 50 percent of small businesses were ‘very prepared or somewhat prepared’ for a Covid-19-like disruption, with 68 percent saying their revenue is down due to the impact from the pandemic.
Almost a third of those surveyed say they’ve struggled to communicate with customers, and more than a fifth say that slow internet connection for staff working from home has been a problem during pandemic-disruptions. Other challenges have included training for work-from-home staff , lack of hardware (such as computers, laptops, printers etc), and lack of tools to facilitate staff collaboration as a key challenge.
That’s having an effect on bottom lines, cashflow and even mental health, says MYOB.
A survey of more than 1,000 Australian SMEs between April and May, at the height of the pandemic, found more than half expecting a revenue reduction of 20 percent or more, thanks to the pandemic. More than a third expect the slump in revenue to continue beyond 12 months.
It’s a similar mood in NZ: Most small businesses are expecting rough roads immediately ahead. Almost two-thirds of Kiwi SMEs (64 percent) expect the economy to decline over the next 12 months.
Amongst the gloom, there’s an optimistic contingent, however: More than a quarter of the Kiwi SMEs surveyed say they are expecting growth in the next 12 months.
“The Covid-19 crisis has been labelled as unprecedented for a reason and there’s no doubt that local businesses have been hit extremely hard,” says Cronin-Knight.
“While confidence is still well down on previous years and we still have a long way to go as we strive to rebuild a thriving economy, it is very heartening to see our SME sector displaying the resilience and optimism they are renowned for.”
And it’s just about rising to the challenge of the moment. Ultimately, today’s tech investment can improve performance beyond the Covid-19 disruption, says Cronin-Knight.
“Our insights suggest that many businesses saw real improvements as a result of the changes they made through the use of technology, such as video calling, cloud applications, instant messaging and even setting up an e-commerce site. Now, they’re looking to lock these benefits in for the future with a focus on driving positive business outcomes like improved productivity and boosting staff or customer engagement,” explains Cronin-Knight.
“We’re certainly not out of the woods and it’s likely there will be more tough times ahead, but this attitude and their efforts to drive an upturn in their operations will be a big contribution as we aim to recover.”