Bright spots for small businesses in the Covid-19 era
It is hard to neglect that NZ small and medium enterprises (SMEs) are having a torrid time navigating the Covid-19 storm.
However, instead of freaking out, Kiwi SMEs are pulling out all stops in turning Covid-driven challenges into meaningful opportunities.
From meeting liquidity shortfall to addressing demand shocks, businesses are making every possible effort to adapt to the new paradigm shift of the ecosystem. Needless to say, government-backed financing schemes are playing an instrumental role here.
Notably, the recently published Small Business Insights report by Xero demonstrated that small business revenue in New Zealand escalated 3.4 per cent year-on-year in September 2020. Besides, the data indicated that the average number of jobs in the small business industry improved by 0.9 per cent in September after tumbling 1.4 per cent in August.
The improvement in revenue and job figures surfaced at a time when NZ stepped up to ease all Covid-19 restrictions outside Auckland in mid-September. With entire country operating at level 1 restrictions since early October 2020, a further uptick in small business prospects can be expected in the months ahead.
Amidst this changing landscape, three promising trends need closer attention to chart out the growth curve of SMEs in the near term.
Extension of the Small Business Loan Scheme
In a bid to ensure small businesses’ access to the line of credit, the government has decided to extend the Small Business Loan Scheme to December 31, 2023. The scheme was initially slated to end on December 31, 2020. This has now been extended by three years, with the interest-free period of loans also increased from one year to two years.
Besides, the government has planned to invest an additional $311 million into the Flexi-Wage programme before Christmas to help employers hire an additional 40,000 unemployed workers.
These initiatives are projected to accelerate the nation’s economic recovery from its worst recession in decades.
Tech-driven solutions
The use of tech-driven solutions has worked as a saviour for SMEs in adapting to the changing dynamics during the coronavirus era. SMEs largely resorted to automation and technology to sustain their operational performance, especially in the early stages of pandemic response.
A recent Asia Pacific survey by Microsoft stated that about 62 per cent of NZ organisations are accelerating digitalisation to accord with the new reality. Moreover, the survey highlighted that around onethird of NZ organisations intend to focus on innovation over the next year to build resilience and recovery.
All in all, tech-driven solutions are acting as a catalyst in promoting a change in SMEs operations during the post-lockdown period. This intervention is expected to deliver massive productivity gains to small businesses, thereby empowering growth in the NZ economy over time.
Remote working
Remote working or flexible workplaces is one of the most prominent changes brought by the pandemic in the corporate world.
Data revealed by Stats NZ in September 2020 indicated that over 40 per cent of employed workers did at least a part of their work from home in April and early May 2020. In fact, about 36 per cent of the working population worked from home in June 2020 despite moving from level 4 to 1 during the period.
To support SMEs’ effective transition to remote working and foster online presence, Google and Spark New Zealand have lately unveiled a virtual skills training programme for SMEs. The programme is targeted to focus on three core areas, which comprise getting businesses online, reaching new customers via digital channels and protecting online presence.
While remote working has brought substantive benefits for both employees and employers in the pandemic-stricken environment, ransomware and cyber-crime attacks have also grown in tandem at an alarming pace. The current situation demands an extensive and diligent work on the part of businesses towards cybersecurity improvement to leverage the benefits of flexible workplaces.