Today, small businesses face an increasing gauntlet of challenges: digital disruption, fierce competition, cashflow management in the face of rising costs and a volatile economy. And we need to offer our support to these ambitions of small businesses a reality as they provide the life-blood of the economy.
Small businesses are the lifeblood of the Australian economy. They contribute around $340 billion every year, employ more than 3 million workers and are driven by personalities that take the time to build relationships with their customers. These businesses burn with ambition. And we still need to offer support to keep fuelling the ambitions of small businesses as they drive growth for the country.
Each week, I speak with inspirational small business owners across different industries. Each has their own story to tell but one common characteristic stands out – passion. In a competitive marketplace, these businesses have carved out a place for themselves; taking and nurturing an idea, to create a viable offer for society.
We recently conducted research involving more than 120 small businesses. It’s encouraging to note that half have aspirations to grow this year – though more worryingly, more than half of this group will struggle to access much needed capital.
It’s no secret that without access to finance and a healthy cashflow, any small business will fail. Even the greatest brands of our time needed a helping hand early on. Steve Jobs struggled for a number of years to secure the support needed to get Apple off the ground. Eventually, his co-founder, he convinced the banks to put up an initial $250,000 – and the rest, as they say, is history. But how many incredible small businesses in Australia have been closed due to a lack of support?
Today, small businesses face an increasing gauntlet of challenges: digital disruption, fierce competition, cash flow management in the face of rising costs and a volatile economy – to name a few. Traditional lenders are hesitant to hand over finance without evidence of a strong credit history or large assets as capital and small businesses can be left in a difficult position.
Recent innovations in trade finance have opened up simpler, more flexible sources of credit for small businesses. A number of products, such as American Express AccessLine, now offer domestic and overseas payment services which allow businesses to pay suppliers on day one using a line of credit, yet funds don’t leave the business account until 51 days later. This can make all the difference to small businesses and enable them to redirect funds to strategic initiatives.
Credit services like this also cleverly enable businesses to use corporate cards for payment, even when a supplier doesn’t accept card payment and earn rewards points on supplier transactions.
My conversations with small businesses are almost always optimistic. Yet there is certainly more that can be done to support this segment to create an environment that supports the lifeblood of our economy. We’re certainly thinking outside of the box to enable small business and to see their ideas and passions flourish.
Barry Fletcher, Vice President of Foreign Exchange International Payments, American Express