- Innovation the bright spot of the pandemic, with 70% of businesses now more comfortable pivoting or launching new products or services
- Seven in 10 SMEs believe they will come back stronger in 2021, with more than half forecasting an increase in revenue of at least 10% during the next 12 months
- Mastercard’s Getting Back to Small Business program has released a raft of new resources in 2021 to support Aussie small businesses
Small and medium sized businesses (SMEs) across Australia have faced significant challenges amid COVID-19. Despite this, new research by Mastercard has revealed that SME optimism across Australia has doubled from 2020 (34%) to 2021 (68%) as businesses continue to recover from the impact of the pandemic.
According to the Mastercard study of over 400 Australian SME businesses, half (52%) of SMEs nationwide are optimistic about the next 12 months, with seven in 10 (70%) believing they will come back stronger in 2021 and beyond.
SMEs are also feeling positive about revenue with more than half (56%) forecasting an increase of at least 10% during the next 12 months. In response to COVID-19, SMEs accelerated their use of digital and e-commerce solutions and are confident about the effect that online activity will continue to have on their businesses’ bottom line in 2021. Six in 10 (61%) Aussie SMEs are expecting revenue to increase from online sales, with half (54%) forecasting an increase of at least 10% from online sales specifically in 2021.
Innovation as the silver lining
SMEs nationwide made changes during COVID-19 to pivot their operations, with over half (58%) changing or diversifying their product or service in 2020, and even more (66%) planning to diversify or change their product offering in 2021.
The silver lining of the pandemic has undoubtedly been the surge in innovation and openness to innovate amongst SMEs, with seven in 10 (70%) businesses feeling more comfortable than ever diversifying or launching new products or services in the future.
The innovation mindset of businesses is clear, with 36% of SMEs planning to launch a new service, 24% launching a new social media channel and 34% looking at launching new products for their customers.
“Australian SMEs continue to show incredible resilience and agility in spite of COVID-19, and the Aussie ingenuity the nation is so famous for has played an essential role in getting businesses back on their feet. Innovation really is the bright spot amid the pandemic. Continuing industry support for these businesses with digital solutions and resources will be essential for the future,” said Richard Wormald, Division President, Australasia, Mastercard.
Online and digital tools highlighted as key factors for success
SMEs have recognised that the trend of online shopping is here to stay with the majority putting a strong focus on online tools to enhance their success in 2021.
Of the SMEs surveyed, decision makers indicated the following will be key to their business success in 2021:
- Social media marketing 65%
- Making their website easier for customers to use 61%
- Social media sales 55%
- Improving customer payment methods online 54%
This is mirrored in SMEs’ investment priorities with 30% investing in social media marketing and 29% in online marketing in the next 12 months. Outside of online improvements SMEs also recognise the significant value their employees, products and services have on their business, with 25% planning to prioritise investment in talent retention and 21% planning to invest in diversifying their products or services.
With expansion online comes increased cybersecurity risk, which is acknowledged by SMEs with 52% highlighting that protecting their business and customers from fraud risk will be key to business success for 2021.
Mastercard’s Getting Back to Small Business program has a raft of educational resources to aid small businesses with their cybersecurity hygiene. Solutions and resources such as the Global Cyber Alliance (GCA) Cybersecurity Toolkit for Small Business; the Cyber Readiness Institute (CRI) Cyber Readiness Program; and RiskRecon are available for small businesses to strengthen their operations.
Evolving perspectives for future
Some of the biggest concerns for SMEs across Australia for the next three months include a slowing economy (50%), another lockdown (49%), customer demand (29%) and supply chain interruptions (22%). In the longer term the same concerns remain, with a slowing economy (54%) and customer demand (34%) top of mind for SMEs between now and the end of the year.
Despite concerns about ongoing lockdowns, just under half (48%) have indicated they now have lockdown contingency plans in place to mitigate any impact to their business activities in the future.
Mastercard is committed to supporting businesses of all sizes amid COVID-19 and into the future. The organisation is using its sponsorship of Australian Open 2021 to elevate small and medium businesses both in Victoria and around the country, capturing their unique offerings and optimism towards the future of business on Priceless.com.
In August 2020, Mastercard launched its Getting Back to Small Business support program, providing access to educational resources, tools and services to help local SMEs embark on their digital journeys. Mastercard has now added new resources for 2021, including the Small Business Digital Readiness Diagnostic – a free online tool to help entrepreneurs go digital.
In addition to the Getting Back to Small Business program, Mastercard’s Data & Services arm is actively supporting many Australian businesses and government organisations with real-time data-driven insights to help them better understand and respond to the challenges created by COVID-19.
A 10-minute online quantitative survey amongst a representative sample of 400 SME decision makers. The survey covered a range of topics including feelings, concerns and confidence about the future as well as priorities for 2021.