Businesses move from ‘pivot’ to ‘growth’
Melbourne-based Pilates business Love Athletica was hit hard when the global pandemic took off last year. When restrictions were introduced, its profits slumped nearly 80 per cent. But Love Athletica co-founders Mat and Caroline Knipe reacted swiftly. They rented out their reformer equipment for in-home Pilates, introduced online studio classes, and created a pop-up studio on the rooftop of the Jam Factory in South Yarra.
Asked how he’s feeling about the future now, Mr Knipe sums it up in one word: “confident.” Business is booming and Love Athletica is set to open its fourth Pilates studio in Melbourne in June, with two more being added later in the year. In 2022, the Knipes plan to open more studios and expand their business interstate.
“More than just turning lemons into lemonade, we’ve been able to take the challenges presented by the pandemic to refocus our business and double down on the new growth potential we can now see,” Mr Knipe said.
Love Athletica is part of a much wider trend: “Pivot” may have been the buzz word for 2020 but “growth” is the word on the tip of the tongue of many businesses across Australia.
NAB’s economic insights show that businesses are embracing growth opportunities amidst booming market conditions. Business confidence is well above the long-run average, business investment is lifting, and jobs are being created.
NAB Group Executive Business & Private Bank, Andrew Irvine, said that last year presented many companies with a unique opportunity to take stock and focus their business on the strongest opportunities.
“After years of consistent GDP growth in Australia, the arrival of the pandemic was a real shock to the economic system and to companies across the country. This crisis, however, forced many businesses to clean up their balance sheets, sell off unnecessary stock or equipment and refocus their efforts where the real opportunities for growth lie,” Mr Irvine said.
“We are now seeing businesses concentrate on investing in new equipment or new premises to take advantage of new ideas they developed last year. Pivot was a great catchphrase for 2020, but this year is all about doubling down on the opportunity.
“NAB has been lending more than $2.5 billion a month to small businesses since the beginning of the pandemic and it is clear that businesses are finding amazing opportunities to invest in.”
The latest data from NAB Economics also found businesses expected to spend significantly more in the next three months. Similarly, expectations for business conditions, employment and capital expenditures for the next 12 months rose again to high levels.
However, not all businesses are flourishing. For those businesses still experiencing financial difficulty, NAB’s Business Banking team remains dedicated to supporting them with loan deferrals or new payment plans; waiving merchant fees; loan restructuring; and mental health support.
The bank is also a key supporter of the SME Recovery Loan – a scheme backed by a government guarantee, which offers customers the option of a repayment holiday for the first 12 months.