Macro worries, micro growth

As part of the inaugural SmartCompany-WHK SME Direction Survey we asked the 600 respondents to nominate their top three concerns for the year ahead. We then set the concerns in what we are calling the “worry list”.

Here it is:

1. Cashflow
2. The global economy
3. The Australian economy
4. Rising costs
5. Tax and business regulation
6. Skills shortages
7. Interest rates
8. The carbon tax
9. The Australian dollar
10. Industrial relations

I am sure no one is surprised by the issue at the top of the list – you could ask the leaders of Australia’s biggest companies and cashflow would be at the top or near the top of their lists too.

But it was the second item that really interested me, or more to the point, the fact that the global economy was seen as a bigger concern than the Australian economy.

This probably speaks to the Chinese water torture we’ve had from overseas this year – a steady drip, drip, drip of bad news every single day about the problems in Europe, the United States and even more recently, China.

While Australia has remained somewhat protected from these global forces, our SMEs can see that there is more pain coming from overseas.

It is interesting (but perhaps not surprising) that in the face of these external challenges the respondents are focusing on internal growth strategies, particularly organic growth, improving business efficiencies and improving pricing and margins.

Big growth moves, such as takeovers and mergers, are clearly off the radar for now.

If the top of the worry list is interesting, the bottom is equally fascinating.

The carbon tax has been designed as a tax on big companies, so it is perhaps logical that it is some way down the worry list.

However, the SME Directions survey does show this tax is becoming better understood by SMEs.

In a survey taken in September by the sponsor of our survey, leading SME accounting and financial planning firm WHK, just 17.4% of SMEs said they understood the impact of the tax on their business.

The passing of the tax has seen the number of businesses that understand the tax climb to 49.1%. Of these, almost 46% expect the tax will have no impact on their profits, while 43% expect profits to fall. That’s a significant impact and it will be interesting to see how it plays out.

Finally, I was interested to see how low industrial relations ranked on the “worry list”. With 2012 looming as a huge year for IR, I expect that to change.

To find out more about the survey, you can download our free eBook, 10 Insights from the SmartCompany-WHK SME Directions Survey. Just click here.