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The sector is worried about how the rising cost of living will impact their holiday season sales, research finds.
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Small businesses brace for summertime blues
02 December 2022
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10 minute read
More than half of small businesses believe demand will fizzle over summer as consumers feel the pressure of inflation and cut back spending, according to a Xero survey.
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The research – conducted by Xero to understand how to better help small businesses over the holiday season – also found more than a quarter (28 per cent) were concerned that the cost of new supplies and equipment would be another obstacle to achieving their targets.
Xero country manager Will Buckley said the results reinforced just how important it was to support local economies at a critical time of year.
“We're all feeling the effects of the increased cost of living, the summer holiday period is a valuable way to choose to spend time - and money - on small businesses who have had a turbulent few years,” said Mr Buckley.
The finding that 55 per cent of small businesses were concerned that summer would be flat comes after a previous Xero survey showed that January and February are typically challenging for cashflow.
The survey showed that a summer slowdown also hits local communities, with more than a third (35 per cent) of small businesses donating to local community groups or schools, 27 per cent volunteering and more than 30 per cent sponsoring local clubs or give to local business initiatives.
“Seeing how much small businesses mean to a local community reinforces the importance of supporting small where and when you can,” said Mr Buckley. “These results show that a dollar spent at your small business will have a flow on effect on your local community.”
Late payments are another issue, with Xero Small Business Insights data showing half of all payments to small businesses are late, with the manufacturing and information, media and telecommunications industries seeing the largest additional seasonal delay.
The late payments had a knock-on effect, with more than 40 per cent of small businesses surveyed then struggling to then pay their suppliers - or even staff - on time.
To support summer trading, half of small businesses requested grants for technology while 41 per cent suggested rebates for customers who spent with them.
Beyond fiscal support, over 75 per cent of small businesses surveyed said word of mouth or social media recommendations were vital to their business.
“Supporting small businesses doesn’t always need to be financial; sharing recommendations with your network and taking the time to leave a positive review are small things that have a big impact,” Mr Buckley said.
“Whatever form it takes, our message is to get out there and support the small operators this summer.”
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