Crazy Domains has worked with thousands of Australian SMEs over the past two decades. We provide businesses with the digital tools they need to thrive in the modern business ecosystem.
For this reason, we partnered with GrowthOps to study the current small business landscape in Australia.
The purpose of this study is to highlight the important trends in Australia right now. In addition, our objectives include:
- Educating small businesses about current challenges and opportunities
- Acknowledging the impact of COVID-19 on the ecosystem
- Helping firms put together their short and long term business plans
- Contextualising the changes digital transformation has had the economy
- Revealing key growth areas all firms should capitalize on
GrowthOps surveyed 201 Australian SME business owners and key decision-makers. Their team asked a variety of questions about their plans and predictions for 2021.
All research data was then analysed, and findings were published in a study. This post includes excerpts from the reports.
Aussie SME Financial Outlook for 2021
COVID-19 hit SMEs particularly hard. Even businesses that have managed to survive and prosper have navigated innumerable challenges.
Despite 2020’s difficulties, businesses are optimistic about the future. 58% of businesses reported feeling “slightly positive” about where they’ll be next year. Another 31% of Aussie businesses also reported feeling “very positive” about it.
Businesses have a lot to look forward to. The number of COVID-19 cases in Australia has steadily declined. As a result, the economy has begun to reopen.
Among other factors, SMEs noted three main reasons why they are optimistic:
- 22% agreed that people adjusting to the new normal would increase business.
- 19% said firms who spent this time building new goals would foster business growth.
- 10% of SMEs believe the economy will also improve next year.
Most Aussie firms shared similar beliefs for why revenue will grow in 2021, including:
- [Offering] “more diversity of service.”
- “Working smarter, better marketing.”
- [Lowered expenses as] “the company has become much leaner since the virus restrictions.”
No company has ignored the influence of COVID-19. However, the consensus is the investments and innovations made this year will equal gains as the pandemic winds down.
Rising Confidence Will Spur Business Investments
Nearly half over Aussie firms believe 2021 will be a good time for investments.
SMEs listed 2021 as a good year for several key reasons. Business confidence is rising once again as COVID-19 begins to disappear.
Aussie firms feel particularly confident since Australia has experienced consistently declining case numbers.
They are also encouraged by additional factors such as:
- Increased consumer spending
- New opportunities with a new year
Clouds on the Horizon: Aussie SME Worries for 2021
While business sentiment is positive, Australian SMEs still have concerns for 2021. Even firms that are bullish about next year should consider these issues.
45% of firms weren’t confident about the economy. There still is no guarantee that COVID will be wiped out even by next year.
Likewise, businesses have tried their best to adapt to the “new normal.” But conditions are constantly evolving. SMEs have simultaneously prepared themselves for both relaxation of restrictions and another lockdown. Volatile economic conditions also worry 17%·of survey respondents.
The Influence of the Economy on Small Business Outlook
Though most firms were confident about their position in 2021, many reported uncertainty about the economy.
60% of business owners reported feeling the economy would be in a fair or a poor state in 2021. This makes sense. Australian recently plunged into its first recession in 30 years. The year started with extreme bush fires. Soon after, the coronavirus pandemic began.
The good news is that the Australian stimulus package did help buffer the blow. Australia has also managed far better than many other countries to control the virus.
The economy plays a major role in business growth and confidence. Everything is connected. Higher business confidence spurs more investment and spending. This creates more jobs driving economic growth.
Besides the economy, businesses report an array of other concerns, including:
- Cost increases
- Changing consumer preferences, including the pressure to innovate
- More competition
- Increased impact of technology on traditional ways of doing business
- Equipment failure
There is an interesting thread that connects all these concerns: technology. Rather than a challenge, businesses should embrace this opportunity for transformation. We’ll go into more detail about this later.
How Firms Are Spurring Growth Despite Concerns
Aussie SMEs have demonstrated remarkable flexibility in the past six months. Many of them not only managed to keep the lights on but have adapted and promoted growth through different strategies.
Product development, marketing, and technology remain as important as ever.
However, there have also been notable shifts in key areas:
- Platform transformation
- Web analytics
- Staff training
Tech Spending Is Integral for Combating Sluggish Economy
As businesses begin to plan for the challenges and opportunities of next year, their spending is primarily shaped by tech. Of the five most popular, four involve technology:
- Advertisement & Media services
- Product development
- Technology/IT services.
- SEO services/Data Analytics
Just as the consensus is uniform among larger businesses, SMEs agree that tech is the way forward. This is especially true given the uncertainties of 2021.
Key Business Investments to Drive SME Success
2020 may officially be the year of the coronavirus, but it’s also ushered in radical digital transformation. Businesses are re-allocating spending to reflect the opportunities connectivity creates.
Above all, firms are investing in technology. As brick and mortars shift online, they’ve invested in essentials like web hosting and domain registration.
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Further, they’ve concentrated resources to focus on marketing, advertising, training. Unsurprisingly, all tech-related business aspects have seen an increase.
Aside from technology, the only major spending shift is increased employee welfare services. Firms have learned the value of their staff. SMEs need to ensure they have what they need to thrive in their roles.
Small Business Outlook: 2021 and Beyond
No country can claim to have had the best response to COVID-19. But Australia has succeeded where others haven’t. Cases have consistently trended downward for months.
Government policies also effectively protected many businesses and jobs that would have disappeared.
But for Aussies, the worst of the pandemic and recession is likely over.
People will continue to struggle. Individuals are loaded down with higher debt levels, unemployment/underemployment, and lowered confidence.
As usual, it is up to SMEs to carry the economy on their shoulders. They’ll reinvent and reinvigorate to start the new post-COVID-19 chapter. Our findings have consistently shown that Aussie SMEs have chosen technology as this vital catalyst for change.
But what does it mean exactly? As companies embraces technology, how do they harness connectivity to promote their interests?
Here are three tips to help Aussies SMEs achieve digital transformation.
1. Build An Enhanced Web Platform
Outside of eCommerce-driven SMEs, many firms did little to harness their web platform to its full potential. Let’s be honest; their websites were often little more than digital business cards.
This simply isn’t enough anymore. Digital transformation is happening everywhere. Whether it’s telehealth, remote work, or any other facet, the floodgates are open. There is no turning back.
Who wants to sit in a doctor’s office or commute 45 minutes when you can do everything from your phone or laptop?
Regardless of your niche, you have to consider this with your customers. Leverage your web platform for its full potential. This means taking advantage of all the opportunities that your website creates for you.
Fortunately, this neither has to be difficult nor expensive. Start with the fundamentals like web hosting, domains, email, and security to ensure your platform is ready to scale as you make this shift.
At the same time, remember your web platform isn’t solely for outward-facing functions. Your platform also connects your team to the resources they need to perform their responsibilities. Internal and external, ensure your site is ready for this new era.
2. Start Implementing SaaS Solutions
As Aussie SMEs prepare to ramp up and serve their customers again, there is still time for strategic integrations. Break down your business into its different operations. There is undoubtedly a software-as-a-service (SaaS) tool that can improve organisation and productivity.
We’re not advising you go out there and buy and learn every tool available. But do a little research particularly in your particular pain points.
For instance, if you’re tired of Stripe fees, then look into payment processing software. Your specific needs may vary. But here a few overlapping characteristics all great SaaS apps share:
- Ease-of-use: how easy is this for you/your staff to add into your operations
- Analytics: what data does this software provide
- Integrations: how well does this software play with others. The whole point of SaaS is to find ways to eliminate repetitive tasks like manual entry
- Cost: Good SaaS doesn’t have to break the bank. You can often find affordable alternative options that are nearly as good as the leading names.
Best of all, SaaS apps offer free trials and money-back guarantees. So nothing is stopping you from checking them out and finding a good fit for your business needs.
Ultimately, if you’re pursuing digital transformation (which you should be) then the right SaaS tools are vital.
3. Become Future-Proof
Disrupt or be disrupted. Even before COVID-19, businesses were caught between multi-billion dollar established firms and agile startups.
Businesses recognise the value and growth potential digital frameworks present. Technology drives growth and embrace a future-proof model built across these areas:
- A Strong Digital Core: Have the right platforms and apps in place to transform into digital businesses ready for the changing needs of today’s economy. It’s more than just operating a business in real-time. Use insights to model the future and make decisions that ensure productivity and profitability.
- Customer Experience: Face-to-face interaction is gone. Personalisation is more important than ever. Customer experience needs to be front and centre through unifying marketing, service, sales, and commerce channels.
- An Engaged and Driven Staff: With tight budgets and an uncertain economy, SMEs need complete workforce engagement. Staff members are needed to drive transformation. Meanwhile, management should use advanced analytics to recruit, empower, and reward the best talent.
- Enhanced Collaboration Across Partners and Suppliers: Collaboration across markets is integral for value creation. Use new technologies and opportunities to connect partners and suppliers to share data, provide personalised insights, and optimise product offering.
- Don’t Wait For Standardisation: If you’ve waited to adopt new technology or service until it’s become an industry-standard then you waited too long. Take advantage of new development to bring more value to your customers and create new revenue streams. This means being a frontrunner in technology to innovate faster. Engage with technology as it emerges. See if it creates new opportunities to help you become a market leader before your competition.
Despite worries about the economy and lingering effects from the pandemic, Aussie firms are confident about 2021.
That’s because they have begun building a future-proof and resilient business foundation. Aussie SMEs are embracing the latest technology to overcome any obstacles that come their way.
There’s still time for you to do the same. Start researching the tech, tools, and strategies you need to prepare yourself for 2021 and beyond now.