Small and medium businesses more optimistic for 2013
Australia’s small and medium business owners are feeling more positive about the local economy as they head into the 2013 business year, according to research* released by Telstra today.
The survey of more than 1000 small and medium sized businesses (SMBs) across Australia found more than half (51 per cent) expect the Australian economy will hold steady in the next six months, and nearly one in 10 (nine per cent) believe it will improve.
The result is a marked improvement from previous quarters where up to 43 per cent of business owners believed the economy would worsen.
Telstra Executive Director, Small Business Sales and Service, John Boniciolli, said the research also revealed an improvement in the financial forecasts for individual businesses.
“We have observed growing confidence among small and medium sized businesses in recent months,” said Mr Boniciolli.
“Last July, nearly one in four (23 per cent) of small and medium businesses were bracing for a bleaker financial period, but by the end of the year that figure had declined with only 16 per cent expecting a weaker financial performance in the first half of 2013.
“Eighty one per cent of SMBs expect their finances to remain the same or improve over this period,”
While signs of confidence are emerging, Mr Boniciolli said some business owners remain uneasy about the Reserve Bank’s decision to relax interest rates.
“The lowering of interest rates presents a double edged sword for businesses – it can put more money in the pocket of consumers but it can also signal that the Reserve Bank is concerned about softening economic conditions,” he said.
Another major concern for SMBs, according to the research, is the burden of administration. Forty three per cent say they spend too much time on it and 50 per cent say there aren’t enough hours in the day to fulfill their business duties.
To help overcome some of these challenges, Mr Boniciolli encourages businesses to investigate incorporating digital technology into their daily operations to help free up time.
“Many small businesses are lagging behind in managing their back office and it’s clearly frustrating them. Nearly 40 per cent** still use paper files locked in a cabinet and are missing out on the benefits of services like cloud computing to help drive efficiencies,” he said.
“Telstra has committed to investing $800 million in cloud-based computing services over a five year period so small businesses can avoid spending their own capital. According to Castalia research***, small businesses can save up to 70 per cent of the cost of an in-premise server solution by using Telstra’s cloud-based server.
“Through storing data in the Telstra network or leasing software, users will gain access to the latest data centres and services including the ability to search, share and view data easily whilst out of the office.
“Business owners can also benefit from apps such as ProntoForms which allow on-the-job forms to be completed electronically, including capturing the signatures of clients and attaching documents digitally to reduce field team paperwork.
“By taking some of the pain out of their business processes, SMBs can focus their efforts on growing their business which in turn impacts the way they feel about their business and its prospects.”
The research also found:
- Positive financial forecasts for SMBs remained steady this quarter with 20 per cent believing it will improve and 60 per cent say it will remain the same
- SMBs in the mining states are the most positive about the financial future of their own businesses - WA (33 per cent of regional and rural businesses) and QLD (29 per cent metropolitan businesses), while SMBs in metropolitan SA were the least positive (12 per cent)
- The perception about the performance of overseas economies has improved since mid-2012 – up from 35 per cent to 41 per cent.
*Telstra Smarter Business Monitor, November 2012
**Telstra Smarter Business Monitor, July 2012
***Cost Savings from Telstra’s Virtual Server Solution, prepared by Castalia Strategic Advisors, November 2011