From bushfires, floods, lockdowns, inflation and labour shortage, Aussie businesses have faced unprecedented challenges in recent years. In 2022, Australia also recorded the largest quarterly rise to the cost-of-living index since the September 2000, with many economists predicting a recession for Australia in 2023. Despite these obstacles, new research reveals that half (48%) of SMEs are looking to expand this year, despite the risk of recession.
The findings were derived from a survey commissioned by Small Business Loans Australia. Respondents were 210 business owners and senior decision-makers across the full SME spectrum: micro (1-10 employees), small (11-50 employees) and medium-sized (51-200 employees), and a small percentage of large SMEs (more than 200 employees).
What were the findings of the survey?
Respondents were asked if they had focused on growing their businesses in the last four years – three of which were hugely challenging for most businesses – and if they will grow their business this year. The highest proportion (48%) are focusing on growing this year. This is more than twice the proportion of respondents (22%) who focused on growth in 2022.
The smallest proportion actively growing was in 2020 (just 20%) and 2021 (17%). Also surprising was the small proportion (18%) who focused on growth in 2019, before the pandemic. Small Business Loans Australia analysed responses across the states and territories. Businesses in Western Australia reported the highest growth, with 88% having focused on growth at some point since 2019, followed closely by 86% of businesses in NSW.
From 2019-2020 West Australian businesses saw the most significant growth, chosen by 36% in 2019 and 28% in 2020. In 2021 Victorian businesses focused on growth more than those in any other state, chosen by 22% whilst South Australian businesses came out on top in 2022, chosen by 26%. Businesses in the ACT were most confident about growth in 2023, with 60% specifying they will use this year to focus on growth, despite a potential recession.
More than half of businesses in Queensland (52%) and New South Wales (51%) will focus on growth this year. Micro businesses are predicted to be the most positive about growth in 2023, sitting at 50%, compared with 48% of medium sized businesses and 37% of SMBs.
What were the executive thoughts on the findings?
Alon Rajic, Founder and Managing Director of Small Business Loans Australia, said: “It is promising to see that almost half of the country’s SMEs consider 2023 as a period of growth. Our study indicates that regardless of a potential economic slowdown, SMEs will continue to be resilient against hardship and confident in their ability to weather tough economic periods, after they have survived a series of unprecedented global and economic disruptions.”
“The challenges of the last three years, while putting a strain on many businesses, motivated many to change the way they operated and to innovate, which steered many toward online trading and away from traditional shopfront selling. With the risks of a recession, however, businesses are best to make smart financial choices when expanding. When seeking financing to facilitate growth, it’s a good idea to shop around to secure low interest rates and fees.”
The full survey results can be found here.
