03/09/2009 - 00:00

SMEs determined to weather downturn

03/09/2009 - 00:00


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SMEs determined to weather downturn

SMALL to medium-sized enterprises are revealing a resilient attitude and determination in the face of economic uncertainty, with many employing strategies to ensure they remain competitive for the eventual upturn.

Research by St George Corporate & Business Bank found SMEs were implementing strategies to protect and strengthen their business during expected challenges in the next 18 months.

The research of 1,000 owners or managers of companies employing between two and 199 people across Australia found that 57 per cent of SMEs were now holding extra cash in the bank to provide a buffer against foreseen and unforeseen impacts of the downturn.

Four in five companies surveyed were hungry for information to protect their business, seeking advice on marketing (38 per cent), cash flow management (28 per cent), finance and banking (27 per cent) and general management (23 per cent).

Meanwhile, Dun & Bradstreet's National Business Expectations Survey for the December 2009 quarter revealed that confidence was buoyed by sales expectations, with the sales index up 46 percentage points, the largest one-quarter rise in the survey's history.

Forty-four per cent of companies expect an increase in sales during the final quarter of this year, while 22 per cent expect a decrease.

A KPMG 'Mood of the Market' survey has revealed that 20 per cent of companies hope to buy assets from underperforming peers in the next year, with 14 per cent of SMEs contemplating outright acquisitions of competitors.

The survey showed that confidence had returned to the small business sector, with 39 per cent of companies expecting economic activity to remain steady, while 43 per cent believe that the economy was likely to expand in the next year.

Adam Orlando


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