Finance

Two-thirds of Australian businesses will restructure to recover from COVID

Two-thirds of small businesses plan to make changes to the structure of their business in a bid to recovery from the coronavirus pandemic or take advantage of new opportunities.

That is one of the results of the twice-yearly ScotPac SME Growth Index, a national survey of 1253 small businesses.

The survey’s release comes just days ahead of the end of JobKeeper, one of the biggest business supports during the pandemic.

It also found 685 of the businesses surveyed plan to invest in their own growth over the next six months, while there was an eight point rise in average revenue growth forecasts for the first half of 2021, reflecting a confidence bounce.

“After a year facing pandemic and recession, there’s now a sense of SMEs really wanting to get back to business as usual,” ScotPac CEO Jon Sutton said.

A third of small businesses say without significant market improvement they’ll close or sell up. Credit: AAP

“But despite these positive signs, our research shows the recovery is uneven and varies significantly by state, region and industry. There are still many small businesses who are doing it tough,” he added.

As well, 65 per cent of small businesses planned to restructure in coming months, including looking at new ways to fund their businesses.

Just over a third say without significant market improvement they’ll close or sell their business and one quarter were unsure about how to recover.

A fifth of businesses said they would be making arrangements with the tax office to manage their cashflow, while one in six will replace stimulus funds with working capital finance.

Speaking of their prospects for business now compared with the start of 2020, 19 per cent felt more positive, 15 per cent less positive, 18 per cent felt relieved, 16 per cent were exasperated, 15 per cent felt uncertain and seven per cent described themselves as enthusiastic.

“There are positives, but we have to be realistic about what lies ahead. We still have half of the businesses polled this round saying they are not yet ready to invest back into their business,” Sutton said.

“It will be hard for the economy to really take off until more small businesses are comfortable and willing to do so.”

The JobKeeper wage subsidy ends on Sunday, with officials expecting between 100,000 to 150,000 people to lose employment.

Treasury secretary Steven Kennedy described the impact as “a bump or two”.

The Reserve Bank said the wage subsidy saved more than 700,000 jobs.

But the government says the strength of the recovery shows it is time for the temporary emergency payment to end.

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