Five core challenges could stunt business growth this year. Discover the key culprits here.
According to the most recent Commonwealth Bank SME Confidence Report, 90 per cent of Australian small and medium enterprises (SMEs) expect a rise in revenue and/or profit in the next six months.
The report, made up of over 400 industry surveys, added that 39 per cent of SMEs are expecting business conditions in Australia to improve, with only one in ten (11 per cent) expecting conditions to decline.
To date, businesses cited better domestic economic conditions (49 per cent), an increase in business confidence (40 per cent) and an increase in consumer confidence (36 per cent) as the key factors driving business growth.
When it came to outlining how they expect to drive growth over the next six months, businesses cited cost reduction (48 per cent), staff performance (41 per cent), improved customer experience (31 per cent) and improved financial controls and management (29 per cent) as key priorities.
However, research also identified five key challenges in the way of business success in 2014. These include:
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meeting client/customer needs (61 per cent);
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cash flow management (58 per cent);
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staff management (56 per cent);
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marketing and sales activities (55 per cent); and
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financial management (50 per cent).
Commonwealth Bank executive general manager local business banking Adam Bennett said the findings indicate that while SMEs are optimistic the Australian economy will continue to gather momentum, they also remain cautious and aware of the challenges of a changing market.
“Overall economic conditions look largely positive, with strong employment growth, low interest rates and a healthy housing market supporting improving business confidence and spending patterns.
“[However], in an increasingly competitive environment, we understand that businesses face challenges from both a macro and day-to-day business management perspective. While businesses appear to be more optimistic about the future, there are still key areas where they could do with more support, such as cash flow and financial management.”