- Half of Aussie small businesses believe their cash reserves will only sustain them until December
- Two-thirds of small businesses have adapted their business in response to COVID-19
- Changing business operations can impact a business’ insurance; small businesses encouraged to check their policy still meets their needs
Allianz Australia research reveals the resilience and agility of small businesses, despite the devastating impact of COVID-19 over the last six months, and a promising commitment from Aussies to “support, shop and spend” to aid in their recovery.
According to the research, 84 per cent of Australian small businesses (businesses with 1-49 employees), the largest proportion of businesses in Australia2, have faced financial, operational and emotional challenges as a result of the pandemic. Based on data from Australian Bureau of Statistics, 2019, there are 2.3M small to medium businesses, representing 99.4 per cent of all businesses in Australia (based on YouGov’s survey size of 1-49 employees). Concerningly, half (51 per cent) of those small businesses believe without support their cash reserves will only sustain them until December (the equivalent of 1,161,000 businesses) and almost two-thirds (62 per cent) doubt the long-term viability of their business.
In response, two-thirds (66 per cent) of small businesses have adapted their business most commonly by utilising cash reserves to maintain minimal business operations until revenue increases (22 per cent), reducing staff hours (22 per cent), or enabling remote working for employees (19 per cent).
In fact, one in five (20 per cent) have altered operations entirely, ranging from adding new delivery services to creating unique discounts for pensioners and those unemployed; and even providing materials that Australians can make their own soap and sanitation products from. Others have invested in digital operations (18 per cent) leading to improvements in web, social media and e-commerce, making it easier to help more Australians support small businesses in new ways.
Changing businesses operations can have a larger impact than just goods and services, it can affect your insurance policy. Nick Adams, Allianz Australia Chief Market Manager, said he wants to make sure Allianz’s small business customers continue to have the peace of mind knowing they are covered should anything go wrong, and is encouraging businesses to check their policy still meets their needs.
“We recognise and applaud the entrepreneurial spirit of small businesses and how they have both adapted and ‘been there’ for Australians during this time; now we want to be there to help small businesses in their recovery. We encourage any small business customer who has made changes to contact us for a free policy health check to make sure their policy still meets their needs,” Nick said.
But it isn’t just the agility and resilience of Aussie small businesses that has been both inspiring and admirable, reassurance about the future of Aussie owned and loved small businesses comes from Aussies themselves. In fact, 78 per cent of those polled showed greater motivation to support local small businesses over larger companies in the wake of COVID-19.
While the majority of Australians acknowledge how vital small businesses are for the economy (68 per cent), support for local business isn’t just about the products and services they buy, it’s about supporting the community. 65 per cent of people want to spend with Australian businesses, especially those close to their homes (63 per cent), but the biggest motivation for shopping with small businesses was supporting the staff from their neighbourhood that are employed locally (70 per cent).
“Nearly half of Australian small businesses have experienced reduced revenue due to COVID-19 and a further one in five are not earning any income currently. These businesses carry great economic value, but also incredible practical and emotional value to the communities in which they are located across the nation. We all play an important part in helping them get back on their feet. That means revisiting, spending and shouting about the businesses we know and love,” Nick concluded.
As Australia enters different phases of recovery, the findings show that there is mutual dependence between businesses supporting Australians and Australians supporting businesses. And although, for many businesses, there is a long road ahead, business owners may take some comfort from the nationwide awareness of the challenges and commitment to helping overcome them.
About the research
About Allianz Australia
Allianz Australia Limited is a wholly owned subsidiary of the worldwide Allianz Group. The Allianz Group is one of the world's leading insurers and asset managers with corporate customers in more than 70 countries. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life, and health insurance to assistance services, credit insurance and global business insurance. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we are among the leaders in the insurance industry in the Dow Jones Sustainability Index.
Any opinions expressed constitute our views at the time of issue and are subject to change. Neither Allianz, nor its employees or directors give any warranty of accuracy or accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in this article.
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