Nearly a quarter of small businesses are anticipating double-digit growth in the next six months according to new research from Commonwealth Bank.
Despite this optimistic view for their own operations, the Commonwealth Bank Small Business Study, an online survey of 851 business decision makers across small, medium and large business, found 64% of small businesses expect conditions to plateau or decline in the same period.
According to the study, more than half of small businesses believe they are well positioned for growth and are more likely to focus on growth initiatives, compared to large businesses which are more likely to concentrate their efforts on cost management initiatives.
Smaller businesses are more likely to agree their cost management is well controlled, however, are least likely to agree that they have healthy levels of debt and a well-defined business strategy.
“Our findings indicate the majority of small business owners have a good handle on cost management, which would contribute to their overall sense of confidence about the potential for business growth over the next six months,” says Karen Last, general manager of small business at Commonwealth Bank.
“It is equally important to have a clear business strategy and healthy levels of debt so they can be confident when assessing growth opportunities.”
The survey also reveals the top priorities for small, medium and large companies: for small businesses the main focus is on sales and marketing activities, while customer experience/service is the top priority for medium businesses, with tech-driven productivity the primary focus for large businesses.
And perhaps unsurprisingly, a higher proportion of large businesses felt they have a good understanding of market conditions and competitive threats compared to small business (91% vs. 73%).
“What is clear is that these different business sectors have varying priorities and their response to expected market conditions isn’t consistent,” says Last.
“It’s encouraging to hear that small businesses are well positioned for growth but it’s important they prepare for that uncertainty to ensure they can handle economic or business challenges.”
The study also reveals key differences in work-life balance depending on business size.
“While small and medium businesses claimed they work too many hours, the research found that it is actually big business decision makers who are working more than 40 hours per week compared with only half of small business owners,” the survey notes.