Last year, when the coronavirus reared its ugly head, no one was prepared for the surge ahead. Over the course of autumn and winter followed by long lockdowns, businesses reeled under enormous pressure. While the government did crucially announce several stimulus and relief packages designed to sustain small businesses through the pandemic, the economic distress was huge for many. Keeping afloat financially has been a delicate act. Many are so far ticking upward. Only modestly.
Take Hiren Luhar, who got into the real estate business in 2018. Representing Real Core Properties, he started with gusto priding on achieving outstanding results. Little did he realise that the coronavirus would stymie his long-term plans. “It broke the business completely. We couldn’t open the office, conduct open houses or meet with people. Normally, in real estate we need to do door knockings as well and drop leaflets, but people even got offended with that,” says Luhar.
On top of it, because his business was less than two years old, he didn’t qualify for government help. “We faced losses,” rues Luhar.
Anil Joseph, who runs Worldwide Digital Solutions Pty Ltd, a digital solutions agency which offers website, e-commerce, software and App development, shares a similar story. His company offers digital marketing solutions to corporates and small businesses across Australia and the UK with all operational resources based in India working at Australian time zones. But the coronavirus impacted the business in a major way. “Especially our outsourced digital solutions division. The other impact was the lack of new business as well as a pause to all digital marketing campaigns. We had an impact of more than 60 per cent to our annual revenue,” says Joseph.
Those in the education sector were not spared either. Pradeep Sarkar had been teaching a discipline called Information Systems at RMIT’s College of Business for 14 years till late last year. When COVID-19 happened, he had to volunteer for redundancy. “The education sector, as we all know, was badly hit. A third of our staff took their redundancy. The ones who remain are heavily loaded with work as they are doing our work,” says Sarkar.
However, there has been a handful of good stories.
Anil Kumar proprietor of accounting practice, Tax Integrity Group Werribee, says, “The business was good from the accounting perspective because a lot of businesses wanted help from accountants in terms of cleaning/gaining cash flow boost from the ATO, JobKeepers, getting registered for it and working out their turnover and eligibility for it. So that kept us busy for sure.”
The only challenge, he says, was working from home with the staff, something they were not used to before. But with all the technology available—Zoom, remote desktop connections, etc—they had all the help.
At the 30-year-old Royal Nut Company, which is in the business of sourcing, manufacturing and supplying nuts, nut spreads, dried fruit, legumes and grains, health foods, confectionery, snack foods and spices, the business was busy and online sales went up. Says founder Prakash Mirchandani, “People’s purchasing power was still there and they were stacking up. The online sales went up. For instance, the sales of beans and lentils jumped up five times because people thought the lockdown was going to be for the long haul.”
Fortunately, the company had gone online four years ago so they had the wherewithal to meet the demands. But although the company had a good turnover last year, it slowed down in December and January.
Australia seems to have got out of lockdown and the coronavirus seems to be relatively under control as of now, but many businesses say the future still remains uncertain.
“It is very hard to answer how the business looks going forward. It is pretty uncertain times but looking at the economy and from how things are going, it also looks a bit positive as well. The industries are all trying to get back to their feet but again there is again a lot of challenges for small businesses because of work from home options,” says Kumar.
Mirchandani agrees this year is going to be a testing time. “We thought with Easter we will pick up, but it didn’t fire at all. We are keeping our heads above the water at the moment.”
As Luhar refocusses on his real estate business, he has also adapted quickly finding a way to generate more business. “Before we used to sell established homes, now we are planning to sell all the estates or raw land. This is also good in a way as prospective buyers can just pick the address and drive around to inspect,” says Luhar, adding, “Things are getting better, we are concentrating more on property management because you can recover your routine expenses. In any real estate business these days, the monthly expense is somewhere around $15,000-20,000 which you have to pay—whether you open doors or not.”
The other good news, he says is that the business in general has picked up. “Right now, there are a lot of properties in the market, unlike earlier where people were apprehensive about buying or selling, there is less fear. We have sold almost 200 properties, it is a good recovery.”
Luhar notes that in real estate business, pivoting online is not feasible always as people are not willing to buy property over phone after looking at it online. “People are more concerned about the structure and condition of the house, which is why they want to have a physical inspection.”
Like others, Joseph is also figuring out ways to move forward. “Currently, the focus is on survival and slowly building up the business back to where it was in 2019. Effectively, we lost two years of growth but all is not lost. We are back into the building phase.
“The good thing is most businesses were in the same situation and we are entering into a phase where everyone has learnt something and applying something new with the aim to safeguard and grow. At least there is confidence that all is not lost. There is a strong hope that things will improve,” says Joseph, while thanking the government for the all the help extended be it JobKeeper, subsidies or grant. “It helped small businesses like mine survive and fight through. If not for that help I would really have struggled to keep my business running and try again to build up.”
As Mirchandani works to make sure that his business makes it to other side of the crisis—pre-Covid, he didn’t wake up every morning thinking about how many tonnes of products to order—a lesson he will take home is that running food business is not an easy one.
“The state and federal governments all got their hands in your pocket. To run a food business, you need a HACCAP certification. Against that you need to spend $100,000 to upgrade everything in your warehouse, and the people who to come to audit charge $10k. Council permits have to be renewed every year, then we pay $140,00 a year for work cover. Can you imagine a small company paying this much?”
Meanwhile Sarkar, who has taken up a new PhD project, says the pandemic has highlighted glaring economic problems. However, he fittingly sums up, “The bottom line is, we are still lucky we are Australians and we are in a better position compared to the rest of the world. But it’s not the time to be complacent.”
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While the govt did crucially announce several stimulus & relief packages designed to sustain small businesses through the pandemic, the economic distress was huge for many. Keeping afloat financially has been a delicate act. #TheIndianSun @indira_laisram https://t.co/1TlLsuJ0yD
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