Collapse of small businesses

“Small businesses are more financially stressed during the Covid crisis”, says ANZ CEO

“Few large corporations have collapsed due to the coronavirus-induced crisis, and it’s the small and medium sized companies that are shutting down”, commented Shayne Elliott, CEO of Australia and New Zealand Banking Group, who last week outlined benefits in the current business climate that may help businesses.
According to Business Insider 240,000 small businesses risk collapse in Australia as the country enters a recession.
And the daily evidence is clear – “As a small business owner it’s certainly hard to imagine being in a more vulnerable situation than right now”, commented Rowe Advisory Owner and CEO, Jody Rowe. “Small-Medium Enterprises are suffering, and if and when job keeper payments cease, many SMEs will struggle to survive. We talk about support through improving payment terms but that doesn’t work if the sales are not there”.
The Small Business Australia website estimates that there are 2 million SMES in Australia, supporting the livelihoods of more than 5 million people. As they rightly commented, “small businesses are the backbone of the economy and the heart and soul of local communities”.
Local content is pivotal to supporting Australian owned business, by onshoring jobs we can ensure we continue to develop the economy to the benefit of all Australians.
“The disappointing reality is that life is tough for small businesses, and it’s even worse when big businesses don’t support SMEs”, continued Jody. “SMEs become desperate for work, accepting all terms and conditions, and dropping rates at the client’s requests. SMEs provide innovation, technology, and out of the box thinking that should be promoted and supported, lets not lose this in Australia.”
Everyone should be aware that next year will be tougher – tax incentives will have gone, job keeper payments will potentially have ceased, and if businesses don’t improve their returns, then inevitably more people will get laid off.