Our journalism usually sits behind a paywall, but we believe this is the time to make more of our content freely available to as many readers as possible. For more free coverage, sign up to COVID-19 Watch.
(Image: AAP/Dave Hunt)

Shuttered small businesses should use this enforced downtime to take a good hard look at themselves.

In many cases the current coronavirus crisis is only exacerbating, not causing, their future collapse. Just ask any overworked accountant at the moment.

Now I know it’s almost un-Australian to criticise the “engine room of the economy”; the 2.2 million small enterprises which employ almost half our workforce.

While government, banks and employees are all keen to do everything to ensure all businesses can snap back, not all can or should.

The hospitality sector, for example, had continuously argued that they were on such low margins that they could not even afford to pay their workers the correct wages.

“Too high, too complex,” they argued. Well now they have plenty of time to catch up on the correct awards and check the books to see what they should be paying and, more crucially, if they can afford to pay it.

Some greedy landlords might be on the back foot for the moment, but they will eventually return to their bad old ways of hiking rents and letting tenants close.

In the new economic order maybe we have to question whether we really need so many cafes, restaurants, hairdressers, massage therapists, nail salons and the like.

And we definitely have to wonder just how many eyebrow shaping salons our population can sustain.

The move to these service industries came at the expense of brick and mortar shops. Small and large, they were already suffering a retail apocalypse before the current health crisis or the earlier bushfire crisis.

After this enforced isolation that downturn will only escalate.

Pity the poor frock shops. What on earth will happen to an entire season’s worth of fashion that was not worn and will be dated by the time they reopen?

When I started The Small Business Show on the Nine Network 25 years ago, the huge number of struggling hairdressers was a regular feature.

Their inability to attract workers has only worsened and the same problem persists. Just because you are handy with a pair of scissors does not mean you can open and run your own establishment successfully.

Ditto chefs.

God forbid we should admit that not everyone is cut out to run their own business; that the dream of being our own boss can in fact be a nightmare.

Traditionally some 60% of all small businesses are estimated to fail within the first three years and we don’t want that number escalating.

When a local cafe near me announced its accountant had advised it to close at the outset of the crisis, I encouraged neighbours to shops at stores they wanted to see survive at the end of this.

But despite all the current goodwill it is not clear just how much consumers are willing to pay to support their local businesses.

The Made In Australia campaign was a prime example of shoppers claiming they would prefer to buy home grown produce while in reality opting for the cheapest option even if it was sourced offshore.

Nowhere will this be crystalised more than in one of the hardest hit and over serviced sectors: restaurants.

This week Restaurant and Catering Australia CEO Wes Lambert said he held fears for 25% of the 47,000 odd restaurants nationwide, leading to the headline in the Good Food section that “12,000 restaurants may shut for good”.

Fewer restaurants means less competition and higher prices, a similar argument to the one playing out in the airline sector.

Just like the small businesses themselves, we’ll all have to do the sums and work out just who we can afford to save in the new economy.

Inevitably new business will be created to replace those that are lost and the jobs that go with them. Hopefully not all will be in the low paying gig economy.

Peter Fray

This crisis will cut hard and deep but one day it will be over.

What will be left? What do you want to be left?

I know what I want to see: I want to see a thriving, independent and robust Australian-owned news media. I want to see governments, authorities and those with power held to account. I want to see the media held to account too.

Demand for what we do is running high. Thank you. You can help us even more by encouraging others to subscribe — or by subscribing yourself if you haven’t already done so.

If you like what we do, please subscribe.

Peter Fray
Editor-In-Chief of Crikey

Support us today