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Lessons from Omicron on safeguarding small businesses

While many of us thought we’d settle into a new normal in 2022, the rapid spread of Omicron has dimmed our hopes.

For small business owners every new variant seems to come with its own set of challenges.

With many required to self-isolate at home, and even more self-imposing isolation type restrictions to reduce their personal risk of infection, Kiwi businesses are experiencing the ripple effects of Covid-19 now more than ever before.

Businesses want to go back to business as usual, but the finish line keeps moving just a little further out of reach.

In light of this, we need to help prepare Aotearoa’s small business economy against further disruptions.

Continuity planning is a non-negotiable

There’s no doubt in my mind our small business community is incredibly flexible and agile.

After all, a small business owner or sole trader needs to wear many hats every single day to get the job done and keep the lights on – this isn’t new.

However, since the pandemic’s arrival, many small businesses have been in survival mode and therefore been focusing on short-term solutions to quickly respond to current pressure points.

As we continue to tackle these challenges, business owners need to consider what issues have caused them the most stress in the past two years, and then understand what solutions can be implemented to overcome those challenges in the long term.

When unforeseen situations like this happen, having a clear road map is pivotal. If you don’t know where to start, there are plenty of guides online to help get you started – like the Xero Business Continuity Plan which details what you should account for in your planning during these uncertain times.

Digitalisation remains the key to success

When the pandemic hit, businesses around the world quickly learned the importance of being highly digital, and those with a focus on digital-first were well placed to make fast decisions.

Before Covid-19 hit our shores, 11 percent of the most productive small-to-medium businesses had five or more apps connected to their Xero account. In comparison, just seven percent of the least productive businesses had five or more apps connected.

Digitally enabled small businesses were significantly more resilient throughout the Covid-19 crisis as the unique nature of the shock forced more companies to digitise; managing sales, staff and operations remotely.

Looking ahead, digitalisation is no doubt going to remain a crucial part of business development as Covid continues to bring the unexpected.

Government support has been, and continues to be, critical

In response to the onset of the Covid-19 economic crisis, Governments around the globe responded with enormous support, particularly in the form of wage subsidy schemes, to prevent large-scale job losses and business closures during lockdowns.

Xero’s data found the Wage Subsidy scheme stabilised small businesses early in the pandemic without severing the link between job reallocation and productivity.

As a small business owner, keeping up to date with the latest government announcements and offerings has become a vital part of the workload.

Currently, businesses are able to apply financial support to pay workers while waiting for a Covid-19 test result and to help pay employees who have been advised to self isolate because of Covid-19 and can’t work from home.

Aotearoa’s history with Covid-19 and lockdowns have demonstrated how quickly our small business environment can change. Luckily, we’re in a good position to be able to learn from what has happened overseas to be better prepared to manage what comes next.

And while I know small business owners want certainty right now, the best thing we can do is focus on getting the fundamentals right so no matter what circumstances come our way in the coming months, we can perform as well as possible.

Related: Look after yourself as we head into the new financial year

Craig Hudson
Craig Hudson
Xero Managing Director for New Zealand and the Pacific Islands

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