Political and economic instability both globally and locally had dominated the news in 2016 and impacted local business and finance. Yet despite this uncertainty, SME owners are turning a new page and bolstering for a year of growth heading into the new year.
Research from Bentleys shows overall, more than half of SMEs are somewhat or extremely confident in their prospects in FY17. The fifth The Voice of Australian Business Survey, a national survey of SMEs across all industries and regions, found acquiring new customers, growing revenue and growing profit were all on the agenda for many SMEs.
Philip Rix, Managing Director at Bentleys Perth, is encouraged by the positivity from SME owners despite the external factors at play throughout 2016. He says it’s to be expected that these events would have a lingering effect on the outlook of SMEs moving forward.
“Given the instability we experienced in 2016, both politically and economically, it’s understandable that SME owners still consider the economy to be their biggest barrier to growth and success. However, it’s reassuring to see, despite these external uncertainties, SMEs are starting to prepare for the remainder of the financial year and that there are signs of optimism. If this optimism can be sustained then this will certainly translate into greater confidence for larger businesses to begin investing again which will then benefit the greater SME sector,” he said.
The research found acquiring new customers was the most commonly held intention for FY17 (49 per cent), followed by growing revenue (34 per cent) and growing profits (32 per cent). Overall, the main business focus for SMEs were to improve profits (41 per cent) and to improve cash flow (23 per cent).
Fifty-seven per cent of medium businesses and 39 per cent of small businesses indicated that hiring new staff was something they anticipate doing over the coming months (compared to 10 per cent of micro businesses) but for SMEs, staffing issues are also a concern – including recruitment, retention and skills shortages.
Rix adds: “The impact of staffing issues highlights the volatility of challenges micro and small businesses can face. One employee can have a more significant impact on the success and opportunity for growth in a smaller business than in larger ones.”
“We encourage SME owners to focus on the elements of the business they can control and improve. The beginning of a new year is the perfect time to take stock and review your successes and failures. It may also be a time to consider new processes or operations that can lower costs and improve revenue.”
“We are seeing a growing trend that has filtered down to SMEs to offshore certain ‘non-client’ facing functions to lower labour cost markets such as the Philippines, Vietnam and India. Typically, businesses hire two or three staff who operate remotely, essentially as an extension of their own employees, and may include design, routine accounting and administrative functions which can all be done for a fraction of the cost here in Australia. While larger businesses have led the way with this trend, technology such as cloud computing, Skype and conferencing has now made this an extremely attractive option for the SME sector as well.”
Rix invites SMEs to follow these tips that will help business growth and in turn boost their confidence levels:
“Reach out and engage with a Business Mentor or Coach such as your trusted accountant or experienced business adviser to help keep you on track and introduce a higher level of accountability,” Rix concluded.
Inside Small Business