A report from the National Australia Bank (NAB) says that anxiety in Australian businesses is still increasing as we enter the final quarter of 2020 with small business owners particularly at risk of closing their doors.
The numbers come from NAB’s quarterly ‘Business Wellbeing Survey’ which takes responses from more than 750 small, medium and large businesses across Australia and analyses their responses for signs of an economic recovery buoyed by public sentiment.
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The reality of the third-quarter 2020 survey, however, signals that small business owners are particularly at risk of closing up their doors from the COVID-19 pandemic, with on average more than four in ten (44%) small business owners responding they’re ‘highly anxious’ about the future and their ability to continue operating. More and more Australian businesses reported that their anxiety was increasing amid economic uncertainty and restrictions on their ability to operate.
On a state-by-state basis, Victorian businesses reported the highest levels of anxiety and lowest levels of wellbeing after more stringent lockdown measures were introduced in the state. Anxiety in Victoria was measured at 54.7% compared to Queensland’s 35.5%, who reported the lowest levels of anxiety throughout the pandemic period.
Authors of the report state from the outset that “Australia’s wellbeing levels are significantly lower than at the same time last year, as the impacts of COVID-19 continue to be felt widely,” adding that “while being in business clearly carries a lot of positives in terms of how people view their lives, particularly their lift worth, it may also involve more life stress.”
“Even on the best of days, running a business can be incredibly stressful, but now there are added pressures, some within and some outside the business.”
There was a clear difference between young and more established organisations reporting anxiety, with authors of the report stating that “anxiety is also much higher for those in business less than 5 years,” as well as in different industries and the size of the business. Larger businesses were less likely to report that their anxiety was increasing, while smaller Australian businesses were more likely to respond their anxiety was increasing.
The NAB says that this has translated to one in three business owners responding that they were feeling both isolated and lonely throughout the year of 2020, and one in five saying they were not dealing with their current circumstances particularly well.
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Authors of the report state that “while some businesses have continued to operate as normal (and even thrive with increased demand for their products and services), many have been heavily impacted, with strains on margins, profitability and cash flow, following extended periods of business interruption or closure.”
They continue to explain that “these pressures, along with the uncertainty of not knowing when the pandemic will end, has inevitably taken a heavy toll on wellbeing. There may have been times when those in business have wondered if it is all worth it,” says the NAB.
NAB’s Small Business Executive Ana Marinakovic has told News that the results promoted internal action at the bank to support businesses through a recession.
“Particularly in this small business segment, there is continuous worry around the need to change and pivot in order to survive,” she said. “The aim here is a really holistic business and personal resilience program that is updated on a weekly basis.”
“Entrepreneurship doesn’t finish at 5pm, and in order to be successful, business owners need to invest just as much time in their own wellbeing as they do in their company,” Marinakovic said.
NAB’s behavioural economist, Dean Pearson added that the COVID-19 pandemic forced a number of small and medium sized businesses to transform their operating strategy and pivot to new modes of operating like investing in e-commerce platforms. Mr Pearson says that while the government’s tax cuts will make small spending more accessible, there is notable anxiety in the sector moving forward.
“The single biggest concern for businesses when you press them about the economy is consumer demand and spend,” he said, adding that “that is the aspect which needs to be supported going forward.”
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