Updates to this research will be published weekly to track the impact and response to COVID-19. Week 5 results are now available.
Research published by Fifth Quadrant in partnership with TEG Insights shows two thirds of SMEs reported a decline in revenue due to the COVID-19 crisis over the past couple of weeks and over 1 in 4 have already had to temporarily or permanently close their operations. Accordingly, it is not surprising that 74% are concerned about the survival of their business.
Table 1: Impact on Business
Table 2: Level of Concern About Business Survival
While the Federal Government’s Business Stimulus Package, including the JobKeeper Wage Subsidy was welcomed by just over half of SMEs (54%), 15% of SMEs were dissatisfied. These businesses claim the relief package came too late for them or the measures would not be enough to keep their businesses going. This is particularly true in the hospitality (34% dissatisfied), construction (22% dissatisfied) and distribution (20% dissatisfied) sectors.
Table 3: Satisfaction With Government Response - Collaboration.
To combat financial pressures, SMEs have been actively looking for ways to reduce their costs. The most common measures have been reducing working hours and wages, terminating staff and forcing employees to take unpaid leave.
Many SMEs are also reaching out to their landlords and suppliers to negotiate better deals. While this research was conducted before Scott Morrison announced the Commercial Rent Relief Package, it is clear that the survival of many SMEs will be dependent on landlords supporting this initiative during and after the crisis. Our research indicates that only 14% of SMEs had approached their landlord prior to the rent relief announcement. We expect this number to increase dramatically in the next few days.
Managing the financial and emotional pressure is clearly taking its toll on SME business decision makers with 74% worried about their own health & wellbeing. Balancing the implementation of survival plans, laying off staff and managing their own personal & household expenses is a significant burden for the majority.
Table 4: Personal Concerns
Please click on this link to access the full report including subgroup analysis by industry sector, size of business and State. Fifth Quadrant and TEG Insights will publish weekly updates of this research to track the impact and response to COVID-19. Hopefully the results will become more positive as we work through this crisis together.