Rethinking business in a post-COVID market


I had hoped three months ago, as many of you also would have, that by the time I wrote my next FCA CEO’s piece that there would have been significant improvement in the impacts of the COVID-19 pandemic and that harsh restrictions would have been lifted across Australia.

Unfortunately, that has not been the case, especially in Victoria where most businesses remain closed, and in other states there is weak recovery being reported with various surveys indicating many are still at risk of permanent closure or reduced size of operations.

The FCA has continued to proactively help members navigate complex and continually changing government restrictions on business’s ability to operate, particularly home services where there seems very low risk to the community of having those services still working, especially when their government-owned equivalents are operating.




Commercial leasing arrangements have been a continuing source of friction for both small and large businesses. The FCA has secured an exemption on collective bargaining on commercial leasing from the ACCC and state-based leasing legislative reform remains a key priority.

The FCA has also been providing expert advice and support for members on key business operations and compliance matters, especially workplace relations and the challenges associated with remote workforce management and working from home.

As some of the larger industry groups, such as airlines, retrench significant staff, the FCA has been promoting best practice franchising as a good investment option to run a small business and develop a new career.

I have been particularly impressed by businesses adapting and implementing innovation in the current environment as their strategy to survive, and in some cases even thrive.

The Australian economy is fundamentally altered and will continue to be this way until we can contain the virus, and beyond that.

Governments are regulating the way businesses are allowed to operate, or not operate, on a weekly, daily and sometimes hourly basis.

Because of this, we are now moving back to a hyper-localised life. We’re all living, working, and shopping in our own suburbs and towns, and that is habit forming over the longer term. That changes the way we interact and serve our customers, and the way we market to consumers who buy our products.

A Sensis business survey in August said that 13 per cent of metropolitan businesses indicated they would close their doors in the next 12 months, and 5 per cent of regional businesses would do the same. I suspect it will be far higher than that.

Cultural, accommodation, and dining businesses were most worried about their prospects. Construction, building, transport, storage, finance and insurance sectors were most confident about their survival.

The FCA recently commissioned our own research through FranDATA. That research found that 46 per cent of survey respondents reported their revenue last quarter was less than 50 per cent compared to the previous quarter, and that the hardest hit businesses were cafes, restaurants, fitness clubs, accommodation and child services.

By comparison, 37 per cent of respondents actually reported an increase in revenue, with takeaway food, maintenance, health, freight and baked goods having an improved trading outlook.

There’s a couple of guiding principles at play for businesses I’ve seen succeed, through what you’d call a culture of innovation.

The first is scenario planning. Look at many possibilities for your business, not just one. And while we can’t employ people who can predict the future, we can create an anticipatory culture within an organisation.

You can’t hang out your shingle and expect people to come buy your coffee. What are your targets? How are you going to meet them? How are you going to out-market your competitors and have nimble and lean supply chains? Systems and processes win the day.

That’s why I like franchise systems. Because if you’ve got a passion for serving your customers and working in a team, franchise systems give you those processes, supply chain advantages, market analysis and data that gives you a better shot at success than going it alone.

Part of that technical and data driven approach to business means looking closely at how our operating environment changes. Let’s take city CBD areas for example.

Office jobs won’t return to what they were before this virus. We’ve proven people can work from home, or as a hybrid between the office and home. We’re not going to have the same levels of international travellers and students coming into the CBD.

For international cities like Melbourne and Sydney, there’s a huge correlation between how those international travellers sustain retail trade, and how retail trade directs the city ecosystem, from trading hours, community safety and cultural attractions.

That’s why we’re seeing a rethink on retail outlets that were once thriving in the CBD, with their outlets forecast to rationalise in number, but surviving in the suburbs and regional towns where people are living and now working too.

People are changing their shopping habits and long-term consumer behaviour.

Convenience stores and petrol stations, where people once grabbed some milk and a loaf of bread on the way home, are seeing customers now doing more of a grocery shop there, or buying more from their local bakery, to avoid crowds and queues at shopping centres.

The lifestyle benefits of regional areas are coming into their own without the worry about a long commute into a CBD job. You can now do nearly any job miles away from home. From a business perspective, that’s a great investment signal for regions.

Previously, innovation in business was only thought of as start-ups and new jobs, while this pandemic has proven it to be so much more. It is also about what asking what can we do now that we can do differently, and better.

In franchising, there’s been some great examples. Home repair businesses prevented from day-to-day jobs because of government restrictions are now installing Perspex glass to protect retail workers and partnering with Bunnings home deliveries that have exploded by 100 per cent.

Macca’s and Pizza Hut are providing milk, bread, toothpaste and eggs for people who can’t leave home as part of a convenience option. This goes to the heart of businesses trying to support vulnerable customers, especially where there was panic buying at the start of the pandemic.

Jack Welch from General Electric once said that when the market is moving faster than your business you are doomed to fail. And there’s no bigger test of that right now, in the biggest economic crisis any of us have ever lived through.

Think about your product, your place in the marketplace, and more importantly, the role you can play in helping our community make it through this to the other side. That’s a job for all of us.





Mary Aldred is the CEO of the Franchise Council of Australia, the peak body for the nation’s $184 billion franchise sector.
Mary commenced in the role in April 2018, bringing with her extensive experience across government, industry and the corporate sectors. As CEO, Mary has led the FCA in developing and delivering strategic priorities to strengthen the FCA’s role as an effective peak business organisation and advocate for a compliant, sustainable and profitable franchise sector.

Franchise Council of Australia
Phone: 03 9508 0888