Australian Small Businesses Still Face Uncertain Future

While the government is talking up our economy, in relation to global economic conditions, the reality is that the SME market is experiencing some of the most difficult conditions on record.

However, the uncertainty surrounding the looming carbon tax and our political scene has sent business confidence plummeting. The downturn in the retail sector is well documented and manufacturing is shrinking at the fastest pace in two years.

Nearly 3000 businesses ceased trading in the June quarter and some economic analysts are predicting as many as 10,000 small businesses may fold as consumers and businesses stop spending.

Cash flow, or the lack of it, is cited as a major reason for SME failure. As the economy tightens, working capital reserves are being eroded. Even when businesses do proceed, debtors are delaying payment of invoices, sometimes up to 120 days or more.

According to Alan Kaye, Managing Director of Cash Resoures Australia, one of Australia’s leading debtor finance companies, “Maintaining a healthy cash flow has to be the highest priority for small business in these economic times”.

“Adequate levels of working capital are vital to meeting day to day financial commitments and protecting the long term viability of a business”, he said.

One way to ensure a strong cash flow is Invoice Discounting, where you unlock the equity in your debtors to give you the working capital you require to ride out tight economic times.

Grants and Incentives

The Australian government encourages successful business people and investors to apply for residence in Australia, although applicants are generally required to invest at least $500,000 in a business. Business migration schemes provide prospective migrants with a link to professional and commercial advisors. Compare your business prospects in all states and territories, which compete to attract foreign investors and business people with incentives such as cash grants, free advice, loan guarantees and tax rebates. Some state governments publish lists of business opportunities for migrants.

We are Australian Small Business Advisers  helping small to medium businesses with a specialty of understanding the space that relates to the Building and construction industry. For more information about our services contact us on 9597 9966 at 563 North Road Ormond Victoria 3204 Australia