Small business facing coronavirus massacre
AUSTRALIA could lose several hundred thousand small businesses as a result of the COVID-19 pandemic, the CEO of the Council of Small Business Organisations Australia has warned.
Peter Strong said the postGFC effect wiped out 200,000 businesses and 100,000 new ventures in 2009/2010 alone, which “gives an indication of what we might be looking at”.
“We could be looking at a couple of hundred thousand businesses that won’t be reopening,” he said.
Small Business and Family Enterprise Ombudsman Kate Carnell said it was “impossible to say” how many businesses would fail in 2020, or which industries would be most affected, but in normal times about half of all small businesses lasted more than three years.
“From what we understand there will be a range of businesses that will not reopen, simply because they can’t afford to,” she said. “We’ve spoken to a lot of businesses. We don’t have a clear figure but they’re saying ‘I just don’t want to get into more debt’.’”
An Australian Chamber of Commerce and Industry member survey in late April found almost three quarters of small businesses experienced a 25 per cent drop in revenue since the start of the lockdown. That figure is expected to be even higher in the Chamber’s May survey data, released this week.
Modelling by Deloitte Access Economics found there would be almost $60 billion in lost income in the Australian economy between the start of April and the end of July – and as small businesses (those with up to 19 workers) employed more than half of the workforce, they could bear more than half of that expected hit.
Research work by Bastion
Insights has revealed just how dire things have become for small enterprises.
Of the 424 small business owners and 890 sole traders who have participated in the group’s weekly surveys during the virus period, 49 per cent of sole traders and 40 per cent of small businesses say they are working less and earning less.
A Brisbane firm that is “not expecting Armageddon’’ is Place Woolloongabba.
When in-person auctions and open homes were banned, it quickly moved them online.
Sales agent and director James Curtain said property listings had halved since the outbreak. “The property management side of things has held up really well,” he said.
“There has been a need to re-market certain properties where tenants weren’t able to meet commitments but every property we have put up for lease has had solid rental inquiry.
“In terms of sales, we have experienced a much higher level of demand than we initially expected … but we have seen listings down about 50 per cent.
“We reduced headcount initially, but through JobKeeper we were able to reinstate the (two) people we put off.”