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Majority of SME Owners Anticipate Growth in the Next 12 Months

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|Aug 19|magazine6 min read

Small- to medium-sized enterprise (SME) owners are more confident about business growth thanks to a stabilising economy. RSM Bird Cameron’s thinkBIG 2014 study found that 64 percent of business owners anticipate growth in the next 12 months. Fourty-six percent of owners also reported revenue growth in the last 12 months, 34 percent reported no change and 20 percent reported a decline. 

thinkBIG has measured the pulse of the Australian SME sector for nine years. It benchmarks business growth and profitability, business planning, exit planning and superannuation. Business owners, 504 of them, participated in the 2014 study, providing insights into how Australian SMEs feel about their business. 

Andrew Graham, national head of business solutions, RSM Bird Cameron, said that “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.” 

Another possible hallmark of increased activity and recovery in the marketplace is the potential for interest rates to remain constant or increase. Ninety-four percent of business owners agree, according to the study. 

Graham said “This is a double-edged sword. At a micro level, among those expecting an increase, it is widely anticipated (by 77 percent 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. Last year, significantly fewer SME owners indicated that their business would be negatively impacted by increasing interest rates. 

“Given the economic downturn of recent years, businesses have been focused on consolidation and survival rather than growth.  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. 

"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." 

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 seventh largest network of independent accounting and consulting firms in the world.