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Wednesday, May 29, 2024

Small businesses confident despite tough conditions

Small business is the most optimistic business segment in Australia, despite the majority of small operators forecasting challenging conditions over the next six months, new Commonwealth Bank research reveals.

Almost one in four small businesses surveyed are expecting double-digit growth over the next six months – the most positive response among all business segments. This is despite 64 per cent of small-business respondents expecting conditions to plateau or decline over the same time period.

The research is a comparative analysis of the current outlook of small (under $1 million in turnover), medium ($1 million-$50 million), and large ($50 million-plus) businesses on economic factors, growth prospects and business development priorities.

It found more than half of Australian small-business owners interviewed believed their companies were well positioned for growth and more likely to place greater emphasis on growth initiatives, while large businesses were focusing their efforts on cost-management initiatives.

The research also found sales and marketing activities were the top priority for small-business owners, while medium-sized businesses ranked customer experience/service as their main focus, and large businesses said tech-driven productivity was paramount.

This confidence may reflect positive spending trends across the Australian economy. In September, the Commonwealth Bank Business Sales Indicator – a measure of economy-wide spending – recorded its strongest gain in 17 months in trend terms. In October, the BSI lifted by 0.4 per cent in trend terms, matching the gain in September. This was the biggest back-to-back increase in spending in nine months.

“What is clear is that these different business sectors have varying priorities and their response to expected market conditions isn’t consistent,” Commonwealth Bank General Manager Small Business Karen Last said. “It’s encouraging to hear that small businesses are well positioned for growth, but it’s important they prepare for that uncertainty to ensure they can handle economic or business challenges.”

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