Jesse Davidson has run Centonove restaurant in Melbourne’s inner-east suburb of Kew for 22 years and recently opened Bar Alba across the road. He made timely changes to his business model at the beginning of COVID-19 leading to long-term benefits.
“Our customers want to stay closer to home and we’d spent a lot of time building great relationships with them which were bolstered by COVID. So we’ve seen a big upswing and our confidence is really strong.”
While the latest ANZ consumer confidence index showed just 7 per cent of Australians expect “good times” for the Australian economy over the next twelve months, Bruce Henderson, Founder and Chairman of Bruce Henderson Architects, believes business owners should feel more optimistic given the inherent wealth of many Australians.
“Australia is a unique country. Our housing stock is worth over $10 trillion, further investment is required to house a growing population and the value of Australia’s super funds and stock market is enormous,” he says. “This underpins the wealth of many Australians and gives us ownership and stability that doesn’t exists elsewhere in the world. These dynamics should give businesses the confidence to invest and could insulate Australia from future global shocks.”
Both Jesse and Bruce believe building strong relationships with customers, employees and suppliers is key to capitalising on the good times and managing more challenging economic periods.
“My restaurant manager has been with me for 12 years and I've got senior waiters that have been with me eight to 10 years,” says Jesse.
“We sponsored a lot of staff from Italy because hospitality is a craft in Italy. We’ve supported them to build themselves a new life in Australia and create opportunities for themselves. I'm proud of our teams. They have homes here, young families they bring to the restaurant. Some of the team have equity in the bar that we've just opened.”
Jesse also stresses the importance of communication in building positive engagement with business partners.
“We had some hard conversations early on during the pandemic when we had to shut down and went to zero cash flow instantly. There were a few companies that called us initially to say ‘don’t worry we'll sort it out on the other side’. They were the first people we paid when we were able to and we have stronger relationships because of that proactive communication.”
Similarly, at ANZ we saw an increased willingness from customers to talk to bankers about the challenges their business was facing and the support needed from us. The earlier those conversations happen, the more options there are for us to assist. This is important in a high interest rate environment and if inflationary pressure continues to increase the costs to run a business.
Regardless of what 2023 brings, the sector’s resilience and the lessons learnt throughout COVID-19 will put businesses in good stead to manage potential tailwinds and headwinds. It’s little wonder why SMEs are described as the engine room of Australia’s economy.
Jenefer Stewart is General Manager Business Banking at ANZ