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Christmas a disrupter for most small business

- November 28, 2019 2 MIN READ
  • Only one in two small businesses plan ahead for major events such as Christmas
  • 58 per cent of small businesses have been impacted by key calendar events such as the festive period – 12 per cent say they have been severely impacted.
  • 26 per cent of small businesses say the chief negative impact is delays in delivery of products (26 per cent), followed by increased costs (17 per cent)
  • 59 per cent of small business owners agree that having fast access to funds can help them prepare for major events such as the holiday season.

A study by small business lender OnDeck has found the festive season can be disruptive for many small businesses. While Australians are predicted to spend over $50 billion between mid-November and December 25, 2019, businesses can still do it tough.

The study by Ondeck found three out of five (58 per cent) SMEs say they have been disrupted by calendar events and public holidays such as Christmas. One in ten (12 per cent) report being ‘severely impacted’[2].

Increased costs (17 per cent), delays in debt payments (22 per cent), delays in delivery of products (26 per cent) and even loss of customers to competitors (6 per cent) are the leading issues for small business owners during this busy period.

Cameron Poolman, CEO of OnDeck Australia said the research suggests small business owners need to plan ahead for significant calendar events  to ensure they can meet additional costs of delays in payments.

“Many SMEs take on additional staff over the festive period. This means managing recruitment and training costs plus a higher than normal payroll expense. Additionally, marketing and advertising costs tend to be inflated in the lead up to Christmas. Taken together, this can put significant pressure on an SME’s cash flow.”

The majority (59 per cent) of small business owners agree that having straightforward access to funds can help them prepare for major events such as the holiday season.

“Additional funding can be the key that lets SMEs take advantage of opportunities offered by increased consumer spending,” said Poolman.

“A plant nursery for example, may need an extra $25,000 worth of stock heading into Christmas in order to generate an extra $15,000 in gross revenue. However, if the business doesn’t have the capacity to make the upfront purchase, this valuable opportunity can be lost.”

Poolman said a lack of access to capital was inhibiting many small business owners, with securing finance an often lengthy and time-consuming process.

According to OnDeck’s research, over one in four SMEs have had their business negatively impacted by the time taken to secure funding through traditional lenders.

Poolman said, “In the lead up to the festive season, time is critical. If an SME is unable to take advantage of a good opportunity, it’s a fair bet their competitors will. I encourage all SMEs to plan ahead for the Christmas period and understand their cash flow needs. If additional funds are required, the process of securing finance can be surprisingly quick with an online lender.”

 

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