Some positives for business amid economic uncertainty

Businesses plan to delay exits due to economic uncertainty, but also show signs of being upbeat about the future

By Rob McKay | July 7, 2010

Somewhat confusing signals on the outlook for new financial year continue, with a study showing small to medium enterprises delaying their exits due to economic uncertainty while showing signs of being upbeat about the future.

Accounting firm RSM Bird Cameron’s fourth thinkBIG benchmark study shows business owners reported little change in their plans to exit the business from 2009, with more owners expecting to continue working after they dispose of their business compared with three years ago.

The survey reveals there are some modest signs of a more optimistic outlook over the next 12 months, with fewer SME owners expecting to reduce personal drawings and fewer expecting to reduce staff, the accountancy says.

However, nearly a third of owners are not sure if their business will grow over the next two years or do not believe it will grow.

The study shows that owners tend to be high on enthusiasm but many find it difficult to set aside time for planning.

One in seven owners say their business has been impacted by government fiscal packages over the last year, with 9 percent reporting they brought forward an investment decision and 6 percent making a new investment.

About 32 percent of owners say they will increase investment in plant and equipment if the investment allowance is re-introduced.

However, 34 percent say they will not increase investment and 34 percent are unsure.

The thinkBIG survey "found that business owners faced tougher trading conditions over the last two years, with nearly a third recording no revenue growth or a decline in revenues, up from the 2009 result," RSM Bird Cameron Business Solutions director Terry Rodoni says.

"On a brighter note, business owners in regional centres experienced the strongest revenue growth.

"SME owners have told us they will increasingly improve efficiency through technology over the next 12 months, although many will continue to rely on price increases or overhead reduction to protect their margins."

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