The majority of small and medium enterprises expect prospects for revenue growth to improve over the next year, although nearly three-quarters said economic conditions would impact business.
SME Association of Australia commissioned McNair Ingenuity Research and Stable Research to conduct a survey of the SME sector, which found although SMEs were generally upbeat about future prospects they were still concerned about economic and bureaucratic ‘anchors’ holding back the sector and economy.
More than a quarter of the respondents expected to employ more people in the coming 12 months, and only 12% said they would employ fewer people in the year ahead.
Chairman Craig West said an “interesting observation” was the majority of this employment growth will be from businesses that were established post-GFC, when global economic uncertainty prevailed.
Although optimistic about Australia’s economic outlook and prospects for employment growth, SMEs considered the main issues which make business difficult were general economic conditions (71%), compliance and bureaucratic issues (62%), and cash flow (53%).
Three quarters of respondents said utility costs over the past 12 months had an impact on business activities, and 37% said they had increased significantly.
Other noticeable increases were insurance and workers compensation costs (55% had increased), technology costs (53% had increased), and employee wages (51% had increased).
In contrast, 63% of SMEs said the high Australian dollar had no or little impact on business – and 5% said it actually made their situations better. But for 31% of SMEs, the high Australian dollar made their lives difficult.
An emerging trend is the intention of small business to invest in technology, with 57% saying they would invest in technology hardware and 51% in software.
Just over half the respondents had recently invested in mobile devices, including tablets for their businesses.
SMEs that have been in business for longer than six years are more likely to invest in technology than those that have been operating less than five years.
The survey also confirmed the majority of SMEs use their own savings to start their businesses and additional funds that are required to underpin growth and development were sourced from their savings (46%) or a bank (43%).
West said the survey results would provide a “road map” for the association’s 18,500 members and help the sector develop.
“Australian SMEs, if anything, are resilient and have an eye on the future utilising the latest advances in technology to position their enterprises for future long term financial success,” he said.
“However, if the economic benefits that will be generated by the SME sector are to be realized – especially employment growth and the capacity for Australian business owners to compete internationally – then government at all levels needs to cut loose the ‘anchors’ of bureaucracy, red tape and related costs or charges.”
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