Small businesses still optimistic despite tough conditions

Research commissioned by online small business lender Prospa reveals that, despite the current tough economic climate, the majority of Australian small-business owners rate the health of their business as good and many are anticipating growth this year.

In detail, 70 per cent of the 520 small-business owners surveyed in the report rate the health of their business as good and 83 per cent are anticipating growth in the next 12 months.

The research also notes the tactics businesses are employing to achieve growth such as word of mouth referrals (employed by 45 per cent), account growth (40 per cent), advertising/marketing (27 per cent) and referrals from other businesses (27 per cent).

Although optimistic, 88 per cent of small-business owners anticipate major challenges over the next 12 months, driven by increased operating costs (as shared by 42 per cent), higher inflation (35 per cent) and increased costs of freight and transport due to rising fuel costs (30 per cent).

In addressing these challenges, small-business owners are looking at various options including investment in digital technology (23 per cent), upgrade or purchase of new equipment (23 per cent) and training staff (21 per cent).

The survey also reveals that 26 per cent of business owners intend to access external funds to support the needs of their business in the next 12 months. The average amount they intend to borrow is $23,585.

Prospa Chief Revenue Officer and Co-Founder Beau Bertoli said that the resilience and entrepreneurial spirit of small-business owners continues to inspire him.

“It’s a tough climate and, not surprisingly, the survey also showed that 84 per cent of small-business owners anticipate challenges over the next year with increased operating costs, high inflation, and increased transport costs causing the biggest headaches,” Bertoli said. “However, the past three years have shown that business owners are resilient, that they can navigate difficult environments and pivot to capitalise on opportunities.”