What they can do, however, is reveal an emerging, wider picture of how Kiwi businesses are likely to fare moving forward, providing insights into how those businesses are learning to persevere and adapt.
It's encouraging to see signs of recovery are already appearing. Record GDP growth was recorded in the three months to September 2020, and recent Xero Small Business Insights data shows small business revenue in New Zealand has been tracking slightly above or level with 2019 numbers since June.
Jobs across the country have also fared better than our counterparts in Australia and the UK.
It's a testament to the resilience of small and medium enterprises across Aotearoa. But despite this, we have to be realistic about the capacity and pace with which businesses can return to pre-Covid levels.
In addition to those who felt that 2020 was the hardest year ever, 44 per cent think 2021 will be even more difficult. Many businesses are depleted and vulnerable after months of persevering through Covid.
In fact, 17 per cent of SME decision makers said they spent their entire cash provision in 2020 due to the pandemic's impacts. Further to this, 5 per cent of small business owners plan to close up shop in 2021.
It should be noted the 2020 numbers could obviously look a lot worse overall if it wasn't for the wage subsidy.
For many small businesses this was a lifeline, and since ending earlier this year there will be businesses struggling to remain open. This is a gap which needs to be addressed in 2021.
For all these sobering reminders of Covid-19's long reach, there are some positives. 2020 was the ultimate test for small business survival and there will be a lot of SME owners out there thinking if they could survive this year, then they can withstand anything.
After such a stark reckoning, it makes sense 29 per cent of respondents felt their business was more efficient, and 63 per cent said 2020 had re-focused the direction of what's most important for their business.
This mentality has pervaded all levels of business, with more than a third (35 per cent) of respondents saying their staff seemed more focused after 2020.
Many of those who felt their business had improved productivity and outputs attributed the change to the adoption of new tech in order to stay open and operational during the lockdown periods. Looking forward, a quarter of Kiwi business owners plan to invest more than usual in technology in 2021.
We also learned some valuable lessons while in lockdown. Kiwis took to working from home, and more than half of Kiwi business owners saw no drop in efficiency from their employees whilst they worked from home during lockdown.
In fact, 36 per cent of business owners said their staff were more efficient when they had the option to work from home.
I'm pleased to see the changes have been well received with 85 per cent of business owners feeling overall employee wellbeing has improved, and 39 per cent are comfortable with their employees working from home at least five days a week.
Recovering from a year as tumultuous as 2020 will be a long road for the majority of small and medium business owners. But there are plenty of positives happening that makes me optimistic about the future. We need to be doing everything we can to help our SMEs flourish, especially over the coming summer months.
Shop local, and if you're in business, pay all of your invoices on time. By combining time-honoured values of resilience, grit and deferred gratification with cutting edge technologies and adaptive practices, New Zealand SMEs will soon be in a position to be thriving again.
- Craig Hudson is managing director of Xero NZ and Pacific Islands.
