Australian small businesses are overwhelmingly optimistic about 2022 and, inspired by the digital skills they developed during the pandemic, are targeting the ecommerce boom for growth in the year ahead, according to research released by GoDaddy, the company that empowers everyday entrepreneurs.
GoDaddy’s ‘Entrepreneurial Pulse’ research measured sentiment among Australian entrepreneurs and small business owners across topics of digital transformation, upskilling and the pandemic.
It found, after 20 months of challenges, Australia’s entrepreneurs and small business owners are positive about the new year and eager to harness the digital skills they developed during the pandemic.
Those digital skills will likely be particularly crucial over the coming weeks and months, as Covid case numbers surge nationwide and Australian businesses and consumers seek to engage more online.
Indeed, according to 30% of respondents, a return to lockdown is the biggest concern they face in 2022.
However, the research also found that two-thirds (66%) of respondents are either optimistic or very optimistic about their small business’ prospects, while just 10% are either concerned or very concerned.
72% of 18-24-year-olds are optimistic or very optimistic about 2022, more than other demographics.
Almost half (45%) reported that they are no longer feeling the financial impacts of the pandemic, while a further 46% expect to feel the impact for the short-term in 2022.
However, 9% believe they’ll be feeling the impacts longer-term; until at least 2023.
Tamara Oppen, the Managing Director at GoDaddy Australia expounded further on this aspect.
“While the last 20 months have been an unprecedented challenge, the enduring themes in the small business community have been resilience, adaptability and innovation.”
“Small businesses aren’t just focusing on their online presence and ecommerce offering to overcome short-term challenges, but rather create long-term growth strategies.”
“We’re excited to see entrepreneurs and small businesses reach new heights in the ‘new normal’, with GoDaddy continuing to empower them with online products and services to help their businesses grow.”
Online vs in-store
Digital transformation has been crucial for small businesses navigating the pandemic, and as 2022 dawns, an online presence has become the primary sales channel for most survey respondents.
62% of the surveyed said that having an online presence is either ‘more or much more important’ than having a bricks and mortar store while 9% said that a physical location was more important.
An online presence is now responsible for, on average, over half (53%) of a small business’ annual revenue. For 23% of respondents, 100% of their total business revenue comes from online sales.
Almost half (46%) said they believe a business cannot succeed today without having a website.
“I turned a bad situation into a growth situation. There’s been a huge ecommerce boom, particularly for small businesses, allowing businesses like mine to grow, despite lockdowns.”
“Because of the pandemic and the growth of ecommerce, it didn’t make sense to invest in a physical space – an online presence is crucial for businesses like mine.”
“My website has been integral to my success so far, and I’m really excited about the year ahead.”
Small businesses selling online
More than half (52%) feel more confident in their digital skills due to the global pandemic.
Many businesses added functionality to their website, including social media integrations (added by 24%), shipping and delivery services (21%), and adding an ecommerce page or online store (17%).
Online retail is the greatest focus for small business expenditure in the coming year, with over a quarter (27%) of respondents planning to invest in an ecommerce website or online store.
Almost three quarters (72%) are focusing on selling locally, one in three (35%) selling nationally and 13% selling overseas. Other common areas for investment include enhancing their existing products or services (23%) or developing new products or services (22%).
Reflecting the rising value of an online presence and the ongoing volatility of the pandemic, one in ten small businesses are considering investing in their premises, like their office or their retail space.
Challenges and skills shortages
While the vast majority are optimistic about 2022, many still expect challenges.
The biggest concern for the survey respondents is a return to lockdown (a concern for 30%), followed by increased competition (27%), low customer demand (20%) and maintaining cash flow (19%).
Staff shortages have hurt many businesses and industries, yet SMBs do not rank it as a primary concern in 2022. Only 14% said they are concerned about hiring staff, with 11% concerned about retaining staff.
39% have no intention of hiring staff in 2022, but those that do are prioritising soft over hard skills.
41% are looking for employees with strong soft skills – such as communication, teamwork, problem-solving, time management, critical thinking and organisation. While just 20% reported prioritising hard skills, like a relevant degree, digital skills, search engine optimisation, marketing, coding or bookkeeping.