With Christmas now behind us it’s safe, to say that the majority of us have reflected on a phenomenally tough and trying year.
For many small business owners however, the Christmas/New Year holiday period is important for a different reason – the opportunity to boost their revenue for the year.
According to our latest research, for nearly a quarter of our local SMEs the holiday trading period generates between 20-30% of their annual income. For more than one-in-10 (14%), it’s 30% or more of their yearly revenue. So, it’s no wonder we’re hearing that there’s significant concern from SMEs around the potential impact of a coronavirus resurgence on our shores.
But Kiwis are known to be resilient and innovative bunch and our SMEs are no exception.
Bracing themselves for any number of scenarios, 60% of SME owners or decision-makers have adapted parts of their business operations to ensure they’re prepared - from ordering stock earlier because of supply chain concerns, extending or reducing opening hours, opening an e-commerce store, or abstaining from employing new staff.
What’s clear as we enter the final stretch, is that it’s not just SMEs that are approaching this season differently – New Zealand consumers are too.
A change on last year, the results of our research highlighted that a significant quantity of consumers planned to shop earlier this year, with nearly half (47%) expecting to have completed their shopping by the end of November and just 22% in early December. This is a marked change on 2019, with the proportion planning to complete their Christmas shop in December down by 25% compare with last year. In Australia, we’ve also seen a similar picture, with just under a third (31%) of Australian consumers stating that they’ve deliberately shopped earlier this year.
However, cashflow is still king, so while the majority of SMEs have plans in place to manage their cashflow over the holidays, they will be buoyed by current consumer confidence – with most looking to spend the same if not more than last year - and the knowledge that more than a third of New Zealand consumers have planned to shop local these holidays.
This might all sound rosy, but it’s important that we don’t get complacent when it comes to ongoing support for small business. Small businesses have long been a key contributor to the success of our economy, our GDP, as well as the success of big business.
As we head toward the break, thinking about how we’ll each be spending time with friends and family, where we’ll be travelling and the small items we might need pick up on the way, I’d like to lay down a small challenge.
As you mull over your plans for the holiday period, please give extra thought to what you can do as a local consumer to give our small businesses a boost - whether it’s supporting local retailers during shopping runs, hospitality providers as you make stops on a long drive, or tourism enterprises as you explore new places.
I’d also encourage you to consider what your business or organisation could be doing to ease the burden for small business owners. Have you got plans to pay your suppliers on time? Is there anything extra you could do to provide them with confidence and certainty around continuing work in the New Year?
Let’s invest in those who are invested in us. A little bit of consideration and action now, could make all the difference not only to a small business’s cashflow and bottom line, but also their survival and success as we head into 2021.