New research has revealed resilience is a key ingredient to small business survival during a crisis like COVID-19.
The report from Aussie accounting software provider Reckon found financial success is twice as likely among highly resilient small business leaders than those with low resilience. The research is based on over 1,000 interviews.
Resilience refers to the ability to bounce back from stress or hardship, whether that’s years of drought, the recent bushfires or the current pandemic.
Reckon’s chief executive, Sam Allert said these challenging times prove discussions around resilience are more crucial than ever.
“Running a business is extremely rewarding, but success sometimes comes at the end of a bumpy road,” he said.
According to the report, a staggering 78% of small businesses feel extra pressure due to the coronavirus, with social distancing measures over the past few months pulling operations to a halt and impacting cashflow.
While nearly half of SME owners and managers have seriously considered giving up on their business, it’s not all bad news.
Many small businesses are positive they can bounce back, with 3 in 4 respondents saying they tend to recover from tough times and almost two-thirds saying they can do so quickly.
This positive sentiment echoes other surveys, where Australian businesses have said that despite feeling less confident in the economy, they remain optimistic in their own ability to weather a downturn.
Why resilience saves you money
The report also found being less resilient could cost your business tens of thousands of dollars annually.
Last financial year, the average small business leader lost $21,832 to missed opportunities caused by poor resilience, according to Reckon.
Given that Australia has 2.3 million small businesses, this potentially adds up to a whopping $50 billion lost each year in this regard.
How to grow business resilience
Allert said any business owner can develop their resilience with the relevant tools and technology.
“The findings suggest that being able to identify and use all the right resources to succeed professionally and personally is a hallmark of the most resilient small business owners,” he said.
“They can tap into JobKeeper-ready payroll software or engage professional accountants to quickly access the government stimulus funds and retain staff through the current challenging circumstances.”
In the report, small business lenders cited a range of external resources that helped them learn and practise resilience. The following came out on top:
- Business and financial experts. In Australia, you can access a number of free financial counselling services to help you navigate financial hardship.
- Mental health professionals
- Self-help books
- Online resources. From ASIC’s MoneySmart to Mozo’s guides, there’s a wealth of expert financial information available at your fingertips.
Eager to grow your money know-how? Browse our business banking guides for tips and tricks on how to pick the right financial products for your small business.