Despite the significant challenges faced by small and medium sized businesses (SMEs) across Australia amid Covid-19, new Mastercard research has revealed that SME optimism has doubled from 2020 (34%) to 2021 (68%) as businesses continue to recover from the impact of the pandemic.
According to the Mastercard study of over 400 Australian SME businesses, half (52%) of SMEs nationwide are optimistic about the next 12 months, with seven in 10 (70%) believing they will come back stronger in 2021 and beyond.
SMEs are also feeling positive about revenue with more than half (56%) forecasting an increase of at least 10% during the next 12 months.
SMEs accelerated their use of digital and e-commerce solutions and are confident about the effect that online activity will continue to have on their businesses’ bottom line in 2021. Six in 10 (61%) expect revenue to increase from online sales, with half (54%) forecasting an increase of at least 10% from online sales specifically in 2021.
SMEs nationwide made changes to pivot their operations, with over half (58%) changing or diversifying their product or service in 2020, and even more (66%) planning to diversify or change their product offering in 2021.
The innovation mindset of businesses is clear, with 36% of SMEs planning to launch a new service, 24% launching a new social media channel and 34% looking at launching new products for their customers.
Of the SMEs surveyed, decision makers indicated the following will be key to their business success in 2021: social media marketing (65%), making their website easier to use (61%), social media sales (55%) and improving payment methods online (54%).
With expansion online comes increased cybersecurity risk, which is acknowledged by SMEs with 52% highlighting that protecting their business and customers from fraud risk will be key to business success for 2021.
“Australian SMEs continue to show incredible resilience and agility in spite of Covid-19, and the ingenuity the nation is so famous for has played an essential role in getting businesses back on their feet,” Mastercard Australasia division president, Richard Wormald said.
“Innovation is the bright spot amid the pandemic. Continuing industry support for these businesses with digital solutions and resources will be essential for the future.” Looking ahead, concerns for SMEs across Australia for the next three months include a slowing economy (50%), another lockdown (49%), customer demand (29%) and supply chain interruptions (22%). In the longer term the same concerns remain, with a slowing economy (54%) and customer demand (34%) top of mind for SMEs between now and the end of the year.