Summer blues for small businesses on the horizon

A new survey from Xero, found 55.3 per cent of small businesses are feeling the pressure of inflation and cost-cutting from their customers that will mean their usually busy summer trading won’t eventuate.

The survey — conducted by Xero to understand how to better help small businesses over summer — also revealed that over a quarter (28.1 per cent) of small businesses are concerned that the cost of new supplies and equipment will also prevent them from achieving their targets.

These revelations are a particular concern as recent data from the Xero Small Business Insights special report — Cash Flow Crunch report — uncovered that small businesses in Australia already receive almost 20 per cent less of their annual revenues over January and February, 7 per cent compared to an average of 8.6 per cent in the other 10 months of the year.

Will Buckley, country manager, Australia at Xero, said while most Aussies know the importance of shopping small over summer, these results reinforce just how important it is to support local economies at a critical time of year.

“We’re all feeling the effects of the increased cost of living, the summer holiday period is a valuable way to choose to spend time — and money — on small businesses who have had a turbulent few years,” said Mr Buckley.

The survey also revealed how supporting small businesses has a flow-on effect on the local community, with more than a third (34.9 per cent) noting they donate to local community groups or schools, more than a quarter (26.8 per cent) choose to volunteer, and more than 30 per cent sponsor local clubs or give to local business initiatives.

“Seeing how much small businesses mean to a local community reinforces the importance of supporting small where and when you can,” said Mr Buckley. “These results show that a dollar spent at your small business will have a flow on effect on your local community.”

Late payments are unfortunately still costing small businesses. Xero Small Business Insights data showed half of all payments to small businesses are paid late, with the manufacturing and information, media, & telecommunications industries seeing the largest additional seasonal delay in late payment times. These late payments then have a knock-on effect, with more than 40 per cent of small businesses surveyed admitting they struggle to then pay their suppliers, or even staff, on time.

Finally, when asked what further support could be provided to small businesses to support summer trading, nearly half (49.7 per cent) requested grants for technology to support business management, while 41.4 per cent requested rebates for customers who spend at small businesses.

Beyond fiscal support, over 75 per cent of small businesses surveyed noted that support with word of mouth or social media is vital to their business.

“Supporting small businesses doesn’t always need to be financial; sharing recommendations with your network and taking the time to leave a positive review are small things that have a big impact. Whatever form it takes, our message is to get out there and support the small operators this summer,” Mr Buckley said.