Record heat poses new business risks and opportunities
With extreme temperatures getting more frequent, businesses have more to worry about.
Summer heatwaves have divided small business owners into winners and losers according to new research from small business lender OnDeck. The recent heatwave, which has seen temperatures reaching almost 50 degrees in parts of New South Wales and Queensland, has led to some businesses successfully cashing in while others are left sweating at diminished profits.
From customers staying home or arriving at stores in a foul mood, heat damaged stock and weather that was simply too hot to ply trades in, the heatwave was bad news for a lot of small businesses.
OnDeck's Heatwave Healthcheck, a report commissioned by YouGov, surveyed hundreds of small business owners to see how the weather was affecting their bottom line. It found that almost 30% of small businesses performed worse than the summer before, with another 30% being unhappy with their level of trade during the heatwave.
However, there were winners too, with 35% of business owners saying they performed better than the previous summer, citing factors ranging from hot demand for summer stock to customers simply walking in for the free air-con.
Swimwear, shutters, air conditioning and other heat-beating goods naturally tend to fly off the shelves in heatwaves, and a lot of businesses were able to cash in. However, this also came with problems as the unanticipated temperature extremes led to shortages of stock and a lack of staff.
Small businesses are long used to dealing with the effects and the aftermath of rain and storms, but now that extreme temperatures are more likely to be added to the list of seasonal problems and opportunities, the importance of being flexible is increasingly apparent.
OnDeck and other agile, same-day small business lenders may have fallen on the winning side of the equation, as small businesses scramble for same-day loans to restock, adapt and otherwise take advantage of the extreme temperatures.
Meanwhile, business credit lines might enjoy a boost in the future as increasingly extreme weather leads to greater seasonal temperature variations, pushing the usual ups and downs beyond what they used to be.
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