MYOB survey: Small businesses biggest fear this Christmas

Christmas is an all-important trading period for the vast majority of businesses. Photo / Getty Images

Small and medium-sized businesses are concerned about the impact of a potential Covid-19 resurgence and what that will mean for festive trading.

New research from small business accounting firm MYOB shows 82 per cent of SMEs are concerned about a resurgence of Covid-19, with almost one quarter saying they are very concerned.

One in 10 businesses owners surveyed said they were extremely concerned by the prospect of a resurgence of Covid-19.

Stock levels are another concern of SMEs minds, the research shows, with many concerned what further lockdown in their manufacturing markets will mean for their business.

Seventy per cent of SMEs surveyed said they were concerned about the impact a further outbreak could have on their supply chain, of these 20 per cent were "very concerned".

"Planning for survival" and "success over the holiday period" in the Covid environment has been a key part of SMEs Christmas trading preparation, the survey of more than 500 small and medium-sized businesses found.

Sixty per cent of firms said they had proactively made changes to their operations in the lead up to Christmas and New Year, with a further 22 per cent stating that they had made "a lot of changes" to their organisations.

More than one in 10 say they have had to completely re-adapt or re-position their business.

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Supply chain concerns are top of mind, with nearly on third of SMEs saying they had ordered Christmas stock earlier than usual, while more than one quarter have limited the volumes of products they have ordered this year.

Of those that have made changes to their business operations, 32 per cent said they had developed business plans to prepare for the movement of Covid-19 alert levels, 24 per cent had planned to extend business hours, 21 per cent had held off from hiring new staff and another 21 per cent said they had moved or commenced e-commerce sales.

Sixty-two per cent of SMEs said they had put plans in place to manage cashflow of slow payments. About 58 per cent of SMEs expect to pay their suppliers on time, while 36 per cent are expecting to be paid late.

More than 80 per cent of Kiwis are concerned about a Covid-19 resurgence. Photo / Getty Images

Ingrid Cronin-Knight, MYOB New Zealand country manager, said while businesses had been doing their best to navigate disruption caused by Covid-19, with the busiest time of the year approaching many had their sights set on a stable and strong trading period.

Just under a quarter of businesses surveyed make 20 per cent of their annual revenue through the Christmas trading period, Cronin-Knight told the Herald.

"In retail, 80 per cent of businesses do a significant amount of revenue in the year over Christmas and this year it represents an opportunity for them to catch up after the lockdown and subsequent lockdown in Auckland.

"If you're in the tourism sector or retail, this an opportunity to close the gap on where you would have been," she said. "The research shows businesses are adapting to the conditions.

"It's been a challenging year, an unprecedented year, but everyone is figuring out within their own model how they adapt."

Cronin-Knight said one in 10 small businesses would close their doors for a break over the Christmas/New Year period, while 30 per cent would reduce their hours.

A separate MYOB survey of consumers found that shoppers intended to spend what they did last year during the trading period.