A new report by digital credit reporting bureau CreditorWatch has revealed that many Australian SMEs have been uncertain about their prospects during the last financial year due to the restrictions placed on them in the wake of the ongoing COVID-19 pandemic.
In response to the question, “What were your main challenges last year?”, 50 per cent of respondents answered “managing uncertainty (e.g. border closures and lockdowns)”. “Uncertain economic/market conditions” were also cited as a major challenge by 49 per cent of respondents.
This uncertainty continues to be a concern for most SMEs into this current financial year, with 58 per cent worried about the uncertain econcomic/market conditions and 53 per cent having trouble managing uncertainty.
As to what could be done to address this uncertainty and help businesses overall, most businesses have responded with a call to lower company tax rates (55 per cent), followed by the opening the borders (43 per cent), and reduction of red tape (37 per cent).
Despite the concerns, there is still optimism among the business community. More than 44 per cent have described current business conditions as positive while only 15 per cent thought they were negative. Furthermore, 44 per cent said they planned to invest this year, particularly in staffing (cited by 44 per cent of those who are planning to invest this year), technology (40 per cent), and marketing (20 per cent).
“Business owners are finding it extremely difficult to develop and execute growth strategies when they’re confronted by so much uncertainty in their everyday operating environments,” Patrick Coghlan, CEO at CreditorWatch, said. “Hiring, purchasing of stock and investment in technology and other assets have all been thrown into disarray. Businesses desperately need goalposts to aim at, even if they’re 12 months away.
“Lockdowns and uncertainty prevail right now but business owners remain optimistic about the future,” Coghlan added. “Once Australia gets through these lockdown periods, the economic and financial bounceback will be large and swift. It’s a very challenging environment without an end game but there will be one and those businesses surviving are preparing for that ‘end day’.”