Five years of COVID-19: what have small businesses learned?

On 28 February 2020, New Zealand reported its first case of Covid-19. 

Over the following months and years, the Covid-19 pandemic took a stranglehold on us and the rest of the world. Covid-19 is still with us and unlikely to go away anytime soon. 

As we approach the five-year anniversary, it’s important to consider what we have learned and what it has meant to New Zealand small businesses. 

According to CPA Australia, business owners are still feeling the impact, with fewer New Zealand small businesses recording growth in 2023 than in 2022, and fewer expected growth over 2024. 

So, what did we learn from the pandemic and how can small businesses use these lessons to protect and build their businesses? 

Working differently  

Workplace structures were dramatically altered during the pandemic, changing many aspects of how employees work. 

Physical distancing restrictions forced employees to work from home, prompting concerns around how this would affect them and how productive businesses would be. Despite this, we now know remote working was successful with many companies still operating remotely or with a hybrid model. 

However, it also triggered a need for employers to be more alert to their remote employees’ needs, including their wellbeing.

It may help for employers to be more empathetic and compassionate and to consider that, for many, flexible working is essential, rather than a nice to have.   

No more bricks and mortar  

Pandemic restrictions meant that customers often couldn’t go shopping and shops were forced to close. For many businesses, especially food services, this made operating difficult. 

But many flexible small businesses were able to swiftly change their business model, such as switching to e-commerce. While most shops are back up and running as usual. Many have either continued their online presence or combined the models, having both a shop and an online presence. 

Since the pandemic began, many customers have become more comfortable with the convenience of ordering from home. Online sales have become a major revenue stream for many businesses. 

The latest Post Office’s ecommerce report notes there were 56.5m online transactions in 2023 – up 5% on the previous year.

It has meant many small businesses have had to increase their online presence through content-building, marketing and branding – something they quickly learnt when pandemic restrictions struck. 

Being social  

The need to communicate without putting anyone’s health at risk became crucial. The use of social media, already rapidly increasing pre-pandemic, grew exponentially in the last five years, with both individual users and businesses looking to expand their market reach. 

Nearly 90% of New Zealanders use social media now. Just under 60% of Kiwi businesses use it for marketing, while 40% use it for customer service. Customers are accustomed to receiving social media push-and-pull advertising.

Latest social media statistics show that Facebook continues to dominate the social media landscape, with 64.52% (Statecounter June figures) of New Zealanders using it. 

Supply chain resilience  

A major issue during and post pandemic was supply shortages, especially building materials, caused by supply chain disruption. 

While many businesses still suffer from supply chain problems, primarily because of geopolitical issues, some businesses learned from their problems during the pandemic and have built more supply chain resilience. 

A key way which can help to mitigate this issue is to diversify suppliers. This can include establishing reliable suppliers in different regions, or simply buying local – many owners have been surprised they were able to source what they needed locally, albeit perhaps paying a bit more.

Businesses should regularly review the risks of their present suppliers so that they can pivot to someone else quickly. 

Remain flexible  

A key lesson learned from the pandemic – and still vital – is the importance of flexibility. Being able to rapidly change your business model to suit new conditions and challenges can help you weather unforeseen storms. 

Businesses are facing continued tough times with the economy, cost of living, and fickle customers. The ability for a business to be flexible and meet these challenges is a key lesson from Covid-19. 

Don’t let your guard down  

Although the World Health Organisation declared an end to the Covid-19 public health emergency in May 2023, the organisation stressed that the virus isn’t gone. It has now entered an endemic phase, which means that the virus will continue to circulate indefinitely. 

Remember the importance of business continuity planning and aim to conduct regular risk reviews. 

This should help you to remain vigilant and flexible and, as many did during the darker moments of the pandemic, rapidly adjust your business model if the need arises. 

Important notice  

This article provides information rather than financial advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, and seek appropriate financial advice before you act on any information. 

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