May 5, 2011 – RSM Bird Cameron’s thinkBIG 2011 study has revealed that small to medium-sized enterprises (SMEs) in regional centres and rural areas are still experiencing tough conditions compared with SMEs in capital cities.
SME owners in capital cities reported significantly stronger revenue growth over the past two years compared with businesses in rural areas and regional centres. 82 per cent reported growth in capital cities versus 62 per cent in regional centres and 65 per cent in rural areas.
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 their businesses.
Andrew Graham, national head of business solutions, RSM Bird Cameron, said, “thinkBIG 2011 highlighted continuing tough conditions for regional and rural enterprises, with regional and rural SMEs recording lower levels of revenue growth following extreme weather events around the country.
“Catastrophic weather conditions during the summer appear to have impacted negatively on regionally-based SME businesses, with only 60 per cent reporting growth in 2011 compared with 80 per cent in thinkBIG 2010. Unfortunately, many rurally-based SMEs endured drought followed by floods in short order, making conditions much tougher.”
thinkBIG 2011 also found that to combat economic conditions in the next 12 months SME owners in rural areas are more likely to reduce overheads than increase prices.
Graham said, “It is not surprising that SME owners in rural areas are choosing to reduce overheads rather than increase prices. Everyone in rural areas is doing it tough at the moment and increasing prices would only alienate customers who are already struggling.
“Care needs to be taken with this approach to ensure that the overheads reduced will not impact on the ability to deliver goods and services to customers.”
41 per cent of SME owners in regional areas identified management time as a key barrier to growth.
Graham said, “Given the deluge of natural disasters most rural SME owners have been dealing with recovery and just trying to stay open, which means finding time to manage the business is not the number one priority at the moment.”
thinkBIG 2011 fast facts
Impact of the global financial crisis
* SME owners in capital cities reported significantly stronger revenue growth over the past two years compared with businesses in rural areas and regional centres. 82 per cent reported growth in capital cities versus 62 per cent in regional centres and 65 per cent in rural areas.
Planning the business
* 56 per cent of SMEs in capital cities undertake formal business planning compared with 36 per cent in regional centres and 41 per cent in rural areas.
* 61 per cent of respondents are more likely to increase prices compared with 51 per cent in regional centres and 52 per cent in rural areas.
* 71 per cent of respondents from rural areas are more likely to reduce overheads compared with 62 per cent in regional centres and 51 per cent in capital cities.
* 41 per cent of respondents from rural areas identified management time as a key barrier as opposed to 29 per cent who identified finding skilled people, 24 per cent who identified access to capital and 24 per cent who identified lack of capital.
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.