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A stabilising economy is inspiring confidence around business growth in SME owners, according to new research from RSM Bird Cameron.
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SME confidence on the rise
20 August 2014
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The mid-tier firm’s thinkBIG 2014 study found that 64 per cent of business owners anticipate growth in the next 12 months while 46 per cent of owners reported revenue growth in the last 12 months, and just 20 per cent reported a decline.
Andrew Graham, national head of business solutions at RSM Bird Cameron said widely held expectations of increased revenue growth may be a result of the market entering a period of recovery.
“The economy’s increasing stability inspires confidence in SME owners, and this is reflected in the upward trend of revenue growth.”
Almost all of the 504 respondents (94 per cent), however, agreed a possible hallmark of increased activity and recovery in the marketplace is the potential for interest rates to remain constant or increase.
Mr Graham warned businesses that have not taken the opportunity in recent years to reduce debt levels will be more vulnerable to the impact of potential interest rate rises.
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“At a micro-level, among those expecting an increase, it is widely anticipated (by 77 per cent of SMEs), that increasing interest rates will negatively impact the business. This could be a result of interest rates having a direct effect on cash flow,” said Mr Graham.
“Given the economic downturn of recent years, businesses have been focused on consolidation and survival rather than growth,” said Mr Graham.
“As a result, those businesses which have been profitable have worked to pay down their debt – in turn reducing the potential impact of interest rate rises."
"Currently, there are signs of increasing activity in the market, and the economy is showing signs of recovery. This encourages SMEs to start shifting their focus and resources towards growing their business,” he said.
The thinkBIG research benchmarks business growth and profitability, business planning, exit planning, and superannuation; and has been conducted by RSM Bird Cameron for the last nine years.
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