COVID-19 – Impact on small business 

 Jo Buchanan, March 2020


COVID-19 itself needs no introduction, but we do need to talk about it’s potential and impending impact on small business. 

This virus is surprising for the transmission and spread rate and we are bombarded with updates, news and statistics to fill our curious and absorbent minds*. Be under no illusion, COVID-19 will soon affect you or someone you know. 

Over the weekend, the World Health Organisation (WHO) reported the number of reported cases of COVID-19 across the world breached 100,000 and it’s spreading fast. The WHO Director-General declared on 9 March 2020 “the threat of a pandemic has become very real”. 

There are many organisations dedicating efforts toward mathematical modelling of COVID-19. They’re all a bit different in their modelling, but one thing they do agree on is the multiple of onwards transmission is high, being around 2.3-2.5. This means that for everyone contracting COVID-19, they are estimated to infect 2.3-2.5 others. 

I’m fortunate. I’m healthy. I should be able to fight a virus and be in a position to help others who are more vulnerable. What concerns me most is the ability of small business to cope under the potential circumstances. Staff absences, supply chain disruption, customer fear and avoidance, travel restrictions and infrastructure constraints will impact small business.  

Most small business will be affected in some way. Even a digital business will be affected if the humans driving it are ill for an extended time.  Whether it is staff illness, supplier or contractor absences, customer cancellations, delays in the supply of consumables, or public transport disruption, many small businesses will feel the effects and their businesses will suffer. In some ways, it’s a special kind of non-human business pandemic and we will see some small business unable to react, respond or recover from the impacts.  

A decrease in customers, even for a short period will affect small businesses. Every travel and hospitality business from airlines to events, travel agencies, hotels, cinemas, restaurants, bars, taxis and public transport will be affected, whether by lack of staff or fear of going out and contracting the virus. 

At the 5th annual Australian Financial Review Business Summit in Sydney, domestic and international business leaders, our Prime Minister, Senators and current and past frontbenchers are all talking about COVID-19. A conference such as this takes a year to organise, and is driven by a well-considered theme:”Investing for Growth”. We haven’t had much discussion on investing for growth. 

What’s interesting is that none of these leaders has answers about how long COVID-19 will be a concern and what impact it will have on global health and economics. We can’t expect them to know of course, but we can expect they have some response to policy and leadership on preparedness. We can expect they have some guidance on business continuity and managing disruption, but they look to the room of delegates and hope we have the answers. 

We know COVID-19 affects a person’s health in different ways. Most who contract and recover from the virus, report symptoms anywhere from nothing to mild cold symptoms to difficulty breathing. Those who don’t recover seem to be people who are compromised due to age, health, immunosuppression or another inability to fight a virus of any type. 

So, the politicians and big business leaders don’t know how big COVID-19 will be or how long the pandemic will last. We’ve agreed it’s unrealistic to expect them to know. Their objectives are to monitor and respond to the health crisis as it unfolds and be economically well-positioned at the end of this to help business bounce back. OK, so… small business? The Australian Prime Minister was quoted today in the Australian Financial Review** declaring small business will “bear the brunt of the storm as they are more vulnerable to the loss of cash flow”, suggesting a way to mitigate this is for larger businesses to pay their supplier bills on time or early.  


This is not enough, so small business must pull up their socks and make a plan. We have no choice but to act and respond now.  

If you are not following reliable information* on the extent and impact of COVID-19, get on to that now 

If you don’t have a plan for losing half of your staff for up to 14 days, make one now 

If you don’t have a plan for losing up to 50% of your customers for several months, make one now 

If you don’t have alternatives to your current consumables suppliers – plans B, C, D – organise that now or plan how you will manage to do without 

If you don’t have a cashflow forecast that caters for any or all of these scenarios, get one now 

If you are a small business owner and you don’t have a plan for how the business will do without you if you are affected, make one now. 


If you have your plans and instructions in place, then congratulations, but please consider helping fellow small businesses, clients and suppliers who may not be in such a strong position to cope with the impacts of a pandemic. 




*Obtain your information about COVID-19 from reliable sources such as the World Health Organisation (WHO), or your country’s national health agency. 

** AFR pp1-8 Tuesday 10 March 2020 “PM’s crisis call to big business” [/vc_column_text][/vc_column][/vc_row]