RSM Bird Cameron’s thinkBIG 2011 study reveals SME owners confident about the future despite concerns regarding financing their business

May 5, 2011RSM Bird Cameron’s thinkBIG 2011 study has revealed that two years on from the global financial crisis Australia’s small to medium-sized enterprises (SME) owners are more confident about the future despite concerns about financing their business.

RSM Bird Cameron undertook its fifth thinkBIG research study in March 2011, benchmarking the planning practices of SME owners and assessing the impact of recent global financial conditions on businesses.

SME owners maintained a high level of satisfaction with their decision to run their own business over the four-year period from 2007 to 2011, reporting improved trading conditions over the last two years compared with 2010, with 73 per cent experiencing revenue growth, up from 68 per cent in 2010.

Despite improved trading conditions, the majority of SME owners do not expect to see any improvement in the availability of finance in the short term, with 64 per cent responding negatively when asked whether financing the business will be easier in the next 12 months.

Andrew Graham, national head of business solutions, RSM Bird Cameron, said, “SME owners recorded a marginally higher level of optimism about their company’s medium-term prospects in thinkBIG 2011.”

With financing not so readily available, SME owners are expecting to place greater focus on reducing overheads and increasing prices in response to business conditions over the next 12 months. 57 per cent of SME owners will also invest in technology to increase efficiency, and 38 per cent expect to inject capital into the business.

Graham said, “SME owners will focus more on reducing overheads and increasing prices to protect their margins over the next 12 months.”

44 per cent of SME owners report a low-to-moderate impact from the investment allowance, 37 per cent from the water policy, 37 per cent from paid parental leave, 40 per cent from the stimulus package, and 48 per cent from Fair Work Australia policies.

SME owners remain nervous about interest rates, with 17 per cent reporting an increase in interest rates of one per cent would cause financial difficulties for their business and 35 per cent reporting it would cause some impact their business.

52 per cent of SME owners report no impact from the increasingly strong Australian dollar.

“RSM Bird Cameron anticipates that the effects of the Australian dollar on SME owners is yet to be felt and the full extent to which they are impacted on will be revealed throughout 2011,” Graham said.

-ENDS-

thinkBIG 2011 fast facts

Impact of the global financial crisis
* 19 per cent of SME owners faced extra scrutiny from external financiers in the last six months.

* SME owners reported improved trading conditions in the last two years, with only 27 per cent experiencing no revenue growth or a decline in revenue, down from 32 per cent in thinkBIG 2010.

* SME owners in capital cities reported significantly stronger revenue growth over the past two years compared with businesses in rural areas and regional centres, with 82 per cent in capital cities reporting growth versus 62 per cent in regional centres and 65 per cent in rural areas.

* 44 per cent of SME owners report a low-to-moderate impact from the investment allowance, 37 per cent from the water policy, 37 per cent from paid parental leave, 40 per cent from the stimulus package, and 48 per cent from Fair Work Australia policies.

* 17 per cent of SME owners reported that an increase in interest rates of one per cent would cause financial difficulties for their business and 35 per cent reported it would cause some impact their business.

* 52 per cent of SME owners report no impact from the increasingly strong Australian dollar.

Business outlook
* 76 per cent of SME owners expect the business to grow in the next two years. 12 per cent believe their business will not grow and 12 per cent are unsure.

* A majority of SME owners do not expect to see any improvement in the availability of finance in the short term, with 64 per cent responding negatively when asked whether financing the business will be easier in the next 12 months.

* 57 per cent of SME owners expect to increase efficiency through technology in 2011 versus 51 per cent in 2010.

* 38 per cent of SME owners expect to inject capital into their business in 2011 versus 32 per cent in 2010.

About RSM Bird Cameron
RSM Bird Cameron is the largest mid-tier accounting firm in Australia with national ownership and profit sharing and offers a full range of specialist advisory services, including business consulting and advisory, assurance and advisory, taxation consulting, corporate consulting and turnaround and insolvency. RSM Bird Cameron is a core member firm of RSM International, the sixth largest network of independent accounting and consulting firms in the world.

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