This week the GDP figures for the June quarter come out and, because they will feature the bulk of level 3 and 4 lockdowns, commentators everywhere are predicting the figures will be the worst since records began. And it is hardly surprising given the extreme and largely successful efforts to "eliminate" Covid-19.
For those who have not seen a change in their employment status or downturn in their business the GDP figures will be notable, and life will quickly return to normal. For those "doing it tough" right now the GDP figures will be a first official registering of the pain they have had to endure. It will also be the first official "costing" of the "hard" and debatably "early" measures that gave us just over 100 days of respite.
What the GDP figures do not show is the future. Being a period to June 30, they are long since past and say nothing of what needs to be done to get back to where we were before (or some semblance of that).
The chair of the Auckland Chamber of Commerce was quoted on radio as saying that the current environment means that businesses have no "certainty and cannot plan". Having been involved in strategic planning for many years, sure, you can plan - it is just that the effectiveness of any planning will be marginal in the current environment.
For many, the environment is so uncertain that there will be no going back as businesses dealing with the significant economic downturn are restructuring to low-cost business models, hibernating, or ceasing business altogether.
The morphine of the wage subsidy is now wearing off and, much like a patient recovering from a major operation, it is now time to get out of bed and get mobile again – staying in bed will give you sores.
But, having emerged myself from surgery over the years, going "cold turkey" is really unpleasant and often there are lower grade pain killers to aid recovery.
And in that regard, there is very good support still out there. The Regional Business Partners Covid-19 vouchers are available to businesses to better enable them to plan, manage cashflow and enable business continuity (revenues and costs).
As a provider I can recommend the process and suggest you give Tim at Whanganui and Partners a call to find out how the vouchers can assist you.
The vouchers are, unlike the wage subsidy and interest free loans, targeted funding, which I believe is more effective. The main concern I have is that the real impact of this is not being seen – that being the erosion of the base of SME and small "Mum and Dad" businesses, and the vouchers go some way to mitigating this.
Businesses without the capital base or market share to 'weather the storm' need additional support. Otherwise what we will be left with is a field of multinationals and major corporates – accelerating the takeover of the Amazons (which would sound like a good title for a book or movie if it were not so real).
Which is why I have tried to champion the small business over the last few weeks and will continue to do so. But I ask you, even with the funding that has been injected and those that will survive after the election; are we really doing enough for our SMEs?
If you want to know more about the Regional Business Partner vouchers give Russell a call on 021 244 2421. He is assisting SMEs with planning, budgeting, and continuity advice.