Wollongong florist Leah Mitchell survived multiple lockdowns, but the challenges she’s facing today are threatening her business all over again.
Leah Mitchell has run her own business for 20 years, but Friday afternoon was the first time that she broke down in tears at her studio.
“I just had a big cry,” admits the owner of Illawarra wedding florist Leah Mitchell Floral. “I just want one week at work that runs smoothly. One week without having to scramble at the last minute, whether it’s because someone is down with Covid, the rain is affecting suppliers or an order hasn’t come through properly because of supply chain shortages. We are just constantly having to pivot and push ourselves to the limit.”
It’s a sentiment shared by business owners all across the country, whose post-pandemic livelihoods are now being threatened by inflation, the increasing cost of living, and interest rates on the rise.
The first quarter of 2022 saw the largest quarterly increase in household living cost indexes since September 2000, when the GST was introduced.
“Rising costs are affecting 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 foremost pressure facing small and medium sized enterprises (SMEs), with a recent MYOB Business Monitor indicating rising fuel prices and the cost of utilities are top concerns for Australian SMEs.”
“It just feels like for the past two years it’s been hit after hit,” Leah agrees.
“When the first lockdown was announced and everyone started cancelling their weddings, it was absolutely horrific. I was worried for my own business, sure, but I was speaking to so many devastated couples who had to postpone their special day and all that sadness really took its toll.”
With JobKeeper, mortgage deferrals and other aid made available by the government early on in the pandemic, Leah was able to keep her business afloat, albeit at great personal stress.
“When everything started opening up and people could rebook their weddings again, it was a huge relief,” she explains. “Even though it meant a lot of seven-day work weeks, with everyone rescheduling their weddings to new days – often weekdays – and supply chain issues still providing a challenge.”
Even though the wedding industry is well and truly back in business, skyrocketing costs mean Leah’s profit margins have been all but eaten up.
“Australia doesn’t actually produce the amount of flowers needed for our supplies,” she explains. “So a lot of them are imported from overseas. There’s one large type of imported rose we use for almost every wedding, they come from either Colombia or Africa.
“They used to come over in the cargo hull of passenger planes, but of course when passenger planes stopped, they had to begin sending them on specific cargo planes, which was much more expensive. Overnight, they went from $50 a bundle to $125.”
Suddenly, weddings the veteran florist had quoted based on old pricing were costing her money, instead of making a profit.
“I had to get back in contact with clients and explain that because wholesale costs had gone up, I was going to have to requote the job for them,” she recalls. “Most people were amazing about it, and understood, but that’s just one element. We often drive 600 kilometres in a weekend in the delivery van, setting up weddings. With petrol prices the way they are, it’s increasingly difficult to make things work.”
Despite the massive challenges businesses like Leah’s have had to face since the pandemic began, there are some signs of cautious optimism.
“We know that SMEs are more resilient than ever,” explains MYOB’s Betschel. “The latest MYOB SME Success Report showed Australian SMEs are 12 per cent more resilient now compared to pre-pandemic, with cashflow levels remaining high and profitability metrics improving.
“The report also found 43 per cent of SMEs expect their revenue to increase this year, with 37 per cent anticipating revenue to be the same in 12 months’ time. This improved resilience, and strong levels of confidence and stability, will no doubt see 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-hikes.
Providing value-adding services, offering flexible payment options, rewarding loyal customers and de-risking large purchases through offering money-back guarantees are all tested strategies available to SMEs, explains the small business expert.
“Business owners should review and adjust cash flow budgets regularly and ensure financials are kept up to date, so that they can stay on top of profitability, overheads, stock levels, and debtors and creditors balances. The best way to keep abreast of this information is with a robust business management platform, containing features such as a dashboard that provide a rapid, accurate picture of the state of the business.”
Industry bodies such as the Australian Small Business Association believe the incoming Albanese government can further help ease some of the pressure.
“I would like to see the government introduce a three-year plan that will see small business recover properly,” says Anne Nalder, founder and CEO.
“Such measures may include a moratorium by the ATO on small business tax debt to safeguard the closure of small businesses, and [authorities could] have a look at other government charges that could be placed on hold.”
For Leah, the resilience and commitment to making it work comes first and foremost from her passion for her clients.
“There have been moments over the past few years where it’s 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 everything being thrown at us, I’m going to keep on fighting for them.”