Industry insight: Backing small business on the road to recovery

Corrina Davison

Aug 28, 2020 – 2.21pm

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This content is produced by The Australian Financial Review in commercial partnership with American Express.

Corrina Davison, managing director, American Express Australia & New Zealand.

Small business resilience and agility has never been more important. Not only have businesses had to endure the impacts of a global pandemic, but this off the back of a period of devastating bushfires, drought and significant flooding to many parts of the country.

In recent research commissioned by American Express with 500 Australian small business owners, two in five said that current trading levels had more than halved since last year. And just over a third said they have less than $5000 in cash savings at their disposal to pay for business expenses.

It comes as little surprise then, that the majority of small businesses admit that sales need to pick-up soon (no later than the end of the year) if their business is to make it through to the end of 2021.

While we cannot underestimate the challenges facing small business owners, it is encouraging that more than half of those surveyed said the pandemic has made them more determined than ever to succeed. The tenacity of small business owners has come to the fore this year as we’ve seen many of them pivot their way around each obstacle they’ve faced.

We have all heard stories from our own communities about restaurants and cafes that started home delivery or takeaway services, gyms offering online classes, and retailers who dialled up their online and social media presence to engage customers. Their ability to find a way through the most trying of circumstances, and their intense focus on their local communities, is inspirational.

Unfortunately, there is likely to be more pain ahead for many businesses, with continued economic uncertainty and soft consumer spending.

At American Express we’ve seen the effects of the pandemic on our own customers’ spending. Back in April when the pandemic took off in many parts of the world, global spending volumes were down about 40 per cent compared to the previous year, with the most significant declines in areas such as travel, lodging and restaurants. And while we are seeing consumer confidence and spend starting to bounce back, the road to recovery still looks long.

An important question now is how we best connect consumers back to small businesses, whether that is in person or online.

It is why American Express brought Shop Small back early this year, to shine a spotlight on the importance of small businesses and encourage consumers to support them. This year’s campaign has been the most successful in its eight-year history in Australia, with more of our card members enrolling in the Shop Small offer and spending with small businesses in their communities.

Small business is the engine room of the Australian economy and as importantly, the heart and soul of the communities where we live and work.

We all share a collective responsibility to support small business to navigate the challenges ahead and shop small whenever we can.

Whether you’re a business owner, shopper or both, learn more about Shop Small by visiting www.shopsmall.com.au