Australia’s small businesses were hit particularly hard by COVID-19. But as Xero Australia Managing Director Trent Innes explains, the pandemic also presented big opportunities for businesses who knew where to look.
Named Managing Director of the Year by CEO Magazine in 2017, Innes’ focus on people and next-level service has seen Xero Australia’s subscriber base grow to over half a million, with revenue growth of over 40 per cent. Under Innes’ watch, the small business accounting platform has secured its position in the ranks of Australia’s Top 100 listed companies.
Innes recently appeared at the Brisbane Business Hub for a booked-out Fireside Chat facilitated by Sofie Formica, where he shared findings from Xero Small Business Insights – a service launched this year to help policymakers make informed decisions about the Australian small business economy – and discussed his thoughts on the way forward.
The COVID effect
“From the very beginning, from the time COVID first hit in March, small business was hit twice as hard as the overall business economy in Australia,” Innes said. “The small business sector was hovering at around 6 per cent growth, year-on-year, and that dropped to -12 per cent in the space of three weeks. The industries that were hit the hardest were arts and recreation, hospitality… the industries that were most affected by lockdown restrictions, and the ones that weren’t able to pivot straight away.
“The good news is that if you take out Victoria, which is an anomaly, as of the end of September we’re actually back up to 5.2 per cent positive growth in the small business economy. So there was a dramatic drop, but it has actually come back.
“From an employment perspective, we saw an 11.9 per cent drop in jobs as soon as COVID hit – small businesses have very few levers they can pull when things go bad, and the biggest one they can pull is casual jobs. We’re still 3.9 per cent down from where we were pre-COVID, so even though we’ve actually got positive growth [in the small business economy], employment hasn’t come [all the way] back yet.
“You can draw a number of conclusions from that, but I think part of it is probably that there’s still a lack of confidence out there at the moment. Small business owners are saying, ‘I want to bring people back on board, but I’m not sure how this is going to go.’”
Making lemonade
While the small business economy is still on the road to recovery, Innes said he has been heartened by businesses who were able to succeed during COVID by pivoting and innovating.
