The Melbourne Cup generates millions of transactions and billions in revenue for small businesses on the morning of the race, but according to a survey from accounting software provider Xero it can be costly in terms of loss of productivity for SMBs.
According to transactional data from Xero, last year’s Melbourne Cup saw SMBs process $2.4 billion on the morning of the race – up an average $400 million from the same period two weeks before and after the Melbourne Cup.
But, productivity in the afternoon fell dramatically to $1.4 billion, a full $1 billion less garnered by Australian small businesses compared to the morning.
“The Melbourne Cup is a fantastic day in the Australian calendar. Small business owners, like everyone else, want to be part of the fun, but our data shows just how hard they have to work in order to account for the loss of productivity from one afternoon,” says Trent Innes, managing director of Xero Australia.
{loadposition peter}According to Innes, while afternoons are often quieter periods for most small businesses, the drop in activity during the afternoon of the Melbourne Cup day is far greater than the norm.
Xero’s data shows that the average afternoon of trading for small businesses sees around $400 million less changing hands, but this drop more than doubles on Melbourne Cup day.
But, the hospitality industry is a big beneficiary of the Spring Carnival, particularly on the day of the Melbourne Cup.
“Many of our small business customers in Melbourne tell us they are extending their operating hours, increasing staff or offering a Cup special in order to bring in the customers,” Innes says.
And, Xero says Melbourne-based bar and restaurant Left Bank sees the Melbourne Cup as a key date in its diary, and in order to plan efficiently and make the most of the additional footfall brought by the Cup, manager Joel Gray analyses sales data and figures to forecast how and when to expect rushes in demand.
Gray uses cloud accounting software from Xero to analyse data to better understand the hourly trends of the venue, “which in turn helps us to accurately forecast the necessary labour and keep related costs to a minimum”.
According to Innes, the way small businesses plan for Melbourne Cup isn’t a “one-size-fits-all approach”.
“For some, working the whole day will provide a business boost while for others, it makes sense to commit resources to the morning and take the afternoon off. That’s where access to data helps empower businesses to make informed decisions. Additionally, new technology is allowing businesses to stay connected when they are out of the office, providing more flexibility to enjoy a day at the races.”