One Year on from the GFC – How SME Owners are Feeling
Small to medium enterprises (SMEs) were one of the hardest hit sectors during the Global Financial Crisis; and though there are signs of a solid return to growth and improved business performance, there is still a certain fragility attached to their confidence.
Recently a number of reports have been released regarding the state of SMEs and business confidence, and some of the significant findings include:
Financing – a majority of SME owners are concerned about obtaining finance in the next twelve months. This is a justified fear, as reports have come out recently saying that for every $1000 lent to homeowners, only $600 is being lent to small business owners and entrepreneurs.
Business Planning – despite financial uncertainty, only approx 40% of businesses undertake a formal planning process. This has grown from 2007, when it was less than 30%, but still represents only a small portion of the sector.
Growth – over two thirds of the industry registered business growth over the last two years, with a quarter of the sector registering growth in the range 1-4%. The key barriers to growth were identified as skill shortages, lack of market opportunity and access to capital.
Business Confidence – There is still some optimism for the coming years though, with close to 70% of SME owners believing that their business will grow in the next two years. However, this needs to be weighed against the SME owners’ anticipation for increasing prices (with 50% believing they will have to increase their prices over the next 12 months) and reducing their numbers of staff.
Revenue – Trading conditions for SMEs continue to be tough, with over 30% experiencing either no growth or a decline in revenues, which is higher than the figure of 26% for 2009.
If you are seeking advice or assistance in effectively planning and managing your business and financial obligations or looking to improve profitability or cash flow; don’t hesitate to call The Quinn Group on 1300 QUINNS (784 667). Alternatively, you can submit an online enquiry.