38 percent of Australian small business (SMB or SME) owners and managers report their business is currently struggling or worse, when compared to this time last year. Of those, nine in 10 say the health of their business is having a negative impact on their personal lives, according to a small business ‘stress survey’ commissioned by Microsoft Australia.
Despite the survey findings, the survey revealed that nearly 60 percent of small
businesses described themselves as healthy, with one in five expecting to
continue investing in their people and replacing staff as necessary and only 6%
are considering laying off employees.
“It appears that many small businesses have clearly been hit by the reality of the global economic downturn as many of Australia’s small businesses are feeling the pinch and experiencing increased stress in this climate of uncertainty,” said Ms. Inese Kingsmill, director of small and mid-market business, Microsoft Australia.
iTWire recorded an interview with Ms. Kingsmill. Please see the last page for
details of this podcast, which is well worth listening to by anyone involved in
managing and running a small business.
The March 2009 survey, conducted by Galaxy Research, interviewed owners and managers of SMBs throughout Australia and measured their level of stress relative to the challenges they are facing in today’s business environment. The research has painted a clear picture of what Australian small businesses are prioritising in today’s economic climate.
“Microsoft is constantly talking to our small business customers and what we’ve learned from our study supports what we’ve been hearing. The three key themes that are coming through loud and clear for managing through the uncertainty are: managing cash flow; reducing costs, and maintaining customers,” said Ms Kingsmill.
The survey also found that more than half (56 percent) of Australian SMBs say that business pressures are more stressful this year than last year, with more than a third (35 percent) reporting that they are working longer hours now when compared to the time they put in prior to the global economic downturn.
For almost half, (42 percent), the primary focus at the moment is simply retaining and growing their customer base.
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Microsoft provides the following top tips for small businesses:
- - Focus on the business's core strengths, competencies and long term goals.
- - Think big picture. Ensure you develop and work to a long-term business plan and that your employees are kept informed of operational decisions.
- - Invest in your people and focus on nurturing the relationships that you have with your employees.
- - Take note of longer term trends, rather than getting sidetracked by short term fluctuations or anomalies.
- - Harness the tough times to grow market share – economic downturns may provide opportunities to attract new customers and strengthen existing relationships.
- - Make the most of the IT you’ve already got to improve operational efficiency.
- - Take advantage of State and Federal government and corporate business assistance initiatives, rebates and grants.
A summary of the survey's finding is that:
- - 29% of Australian SMBs report that their business is struggling, and a further 9% report that their business is suffering.
- - 56% say that business pressures are more stressful this year with one in five (22%) saying that business is much more stressful this year.
- - Almost all business owners/ managers (92%) who said their business was struggling or suffering report that the health of their business is having a negative impact on their personal life and 33% say that it is having a large impact.
- - One third (35%) of SMBs are working longer hours now when compared to hours worked prior to the economic downturn (45% among struggling SMBs).
- - Currently, the primary focus among SMBs is customer retention and growth (42%), while for 34% the priority is cost management and this latter area is the primary focus of SMBs that are struggling (43%).
Microsoft's survey shows the main challenges for SMBs this year to be:
- - Customer retention and growth ... 54%
- - Keeping costs down ... 44%
- - Managing cash flow ... 40%
- - Minimising bad debt ... 21%.
The focus of SMBs is less on competition (11%) and topline revenue growth (10%).
Healthy companies were more likely to say that they will invest in technology
to stay ahead of the competition (24% compared to 10% among struggling SMBs),
with 18% of SMBs overall saying this.
You will understand this significant Australian business survey better by listening to the podcast with Inese Kingsmill, available
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