National Australia Bank (NAB) has released its latest SME Business Insights report from NAB Economics, providing some insight into the challenges facing Australia’s small and medium-sized enterprises (SMEs).
To source the data, NAB Economics asked around 600 Australian SME owners and managers to nominate the top three risks to their business that “kept them awake at night”.
Cash flow was named the most significant concern for almost four in 10 (38 per cent) SMEs during the September quarter, with challenges around profitability (36 per cent) and the cost of doing business due to inflation (33 per cent) the next highest-ranked concerns.
The report also provided some insight into how these pressure points varied across different states and industry segments.
For example, cash flow was the primary concern for SMEs in Victoria and NSW, as well as SMEs in construction, retail, transport and storage, and property services.
Staff turnover and labour shortages were the most significant challenges for SMEs in Queensland, Tasmania, and South Australia, as well as those in business services and health services.
Meanwhile, profitability was the top issue for SMEs in Western Australia and the accommodation and hospitality sectors.
Inflation was the biggest issue for wholesalers, while government policies and regulations were the biggest concerns for SMEs in the finance and insurance space.
Krissie Jones, NAB business direct and small business executive, said the data reflected much of what she had been hearing from SMEs when meeting with business owners across the country.
“Small business owners are incredibly resilient, but they’re already stretched and continue to face persistent and emerging challenges that are keeping them up at night,” Jones said.
“While improving work-life balance and easing concerns around government policy are welcome, small business owners tell me these measures can shift quickly, which is why it’s critical to reduce red tape.
“Small business owners remain alive to ongoing risks around cashflow, profitability and access to capital, as well as hiring and retaining staff, which are greater concerns in smaller states and regional areas.”
Challenging environment
In a piece for The Adviser’s November magazine, Chris Thomas, NAB executive commercial broking and equipment finance sales, said brokers can support their SME customers by understanding their businesses.
“By grasping the context in which these businesses operate, brokers can build stronger relationships and offer more tailored solutions,” Thomas said.
“The next 12 months present an excellent opportunity for brokers to lay the groundwork for longer-term relationships by helping business customers ride out the current market cycle and set themselves up for future success.”
Source: https://www.theadviser.com.au/lender/46459-sme-owners-share-major-challenges