Wollongong florist Leah Mitchell survived multiple lockdowns, but the challenges she faces today threaten her business again.
Leah Mitchell has been running her own business for 20 years, but on Friday afternoon she burst into tears for the first time in her studio.
“I had to cry,” admits the owner of Illawarra wedding florist Leah Mitchell Flowers† “I just want a week at work that goes smoothly. A week without having to scramble at the last minute, whether it’s because someone is confused with Covid, the rain is plaguing suppliers, or an order hasn’t come through due to supply chain shortages. We just have to run constantly and push ourselves to the limit.”
It’s a sentiment shared by entrepreneurs across the country, whose post-pandemic livelihoods are now threatened by inflation, the rising cost of living and rising interest rates.
The first quarter of 2022 saw the largest quarterly rise in household cost of living indices since September 2000, when the GST was introduced.
“Rising costs affect us all,” explains Jane Betschel, Head of Marketing and Digital Sales at MYOB.
“For the first time since Covid hit Australian shores, the pandemic is not the main pressure facing small and medium-sized enterprises (SMEs) with a recent MYOB Business Monitor indicating that rising fuel prices and utility costs are the top concerns for Australian SMEs. †
“It feels like there’s been hit after hit over the past two years,” Leah agrees.
“When the first lockdown was announced and everyone started canceling their weddings, it was absolutely horrific. I was obviously worried about my own business, but I spoke to so many broken-down couples who had to postpone their special day and all that grief really took its toll.”
With JobKeeper, mortgage deferrals and other aid made available by the government early in the pandemic, Leah was able to keep her business afloat, albeit under great personal stress.
“When everything opened up and people were able to rebook their weddings again, it was a huge relief,” she explains. “Even though it meant a lot of seven-day work weeks, with everyone moving their weddings to new days – often weekdays – and supply chain issues are still a challenge.”
Even though the wedding industry is making a comeback, the skyrocketing costs mean that Leah’s profit margins are nearly exhausted.
“Australia doesn’t really produce the amount of flowers we need for our supplies,” she explains. “So a lot of them are imported from abroad. There is one major type of imported rose that we use for almost every wedding, they come from Colombia or Africa.
“They used to come across in the cargo fuselage of passenger planes, but when passenger planes stopped, of course they had to send them on specific cargo planes, which was much more expensive. They went from $50 a bundle to $125 overnight.”
Suddenly, the weddings quoted by the veteran florist based on old prices were costing her money, instead of making a profit.
“I had to contact customers again and explain that because wholesale costs had increased, I had to relist the job for them,” she recalls. “Most people were great about it and understood it, but that’s just one element. We often drive 600 kilometers in a weekend in the van, setting up weddings. With gas prices as they are, it’s getting harder and harder to make things work.”
Despite the huge challenges companies like Leah have faced since the start of the pandemic, there are some signs of cautious optimism.
“We know that SMEs are more resilient than ever,” explains Betschel of MYOB. “The latest MYOB SME success report showed that Australian SMEs are now 12 percent more resilient compared to pre-pandemic, with cash flow levels remaining high and profitability metrics improving.
“The report also found that 43 percent of SMBs expect their revenues to increase this year, while 37 percent expect revenues to be the same 12 months from now. This enhanced resilience and strong levels of confidence and stability will undoubtedly help SMEs through this challenging period.”
She says there are a number of things that can be done to adapt to external market pressures without alienating customers through further price increases.
Offering value-added services, offering flexible payment options, rewarding loyal customers and reducing the risk of large purchases by offering money-back guarantees are all proven strategies available to SMEs, explains the small business expert. from.
“Business owners need to regularly review and adjust cash flow budgets and ensure that financial data is kept up-to-date so they can track profitability, overheads, inventory levels and accounts receivable and payable balances. The best way to stay on top of this information is with a robust business management platform, with features such as a dashboard that provides a quick and accurate picture of the situation.”
Industry associations such as the Australian Small Business Association believe the incoming Albanian government could further ease some of the pressure.
“I’d like to see the government introduce a three-year plan to help small businesses recover well,” said Anne Nalder, founder and CEO.
“Such measures may include a moratorium by the ATO on small business tax debt to ensure the closure of small businesses, and [authorities could] check out other government charges that could be put on hold.”
For Leah, the resilience and dedication to make it work comes first and foremost from her passion for her customers.
“There have been times over the years when it has been tempting to throw in the towel,” she admits, “but I love my clients and what I do. I love creating beautiful weddings for my brides – and despite all that is thrown at us, I continue to fight for them.”
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