Australian companies have felt the impact of recent tough times. However twelve months on from the start of the global financial crisis, are there still storm clouds hanging over businesses? Which companies are struggling and which ones are doing well?
Recent business indexes suggest that the economy is recovering and that businesses are regaining their optimism. How do these increasing expectations convert to real business strategies that will deliver strong business performance? What are the key strategies for businesses over the next twelve months? Are there differences between SMEs and large companies in their approach to managing through a downturn? Is operational excellence considered a business issue in the current climate? What is the outlook for 2009-10 and what are the hurdles for the next twelve months?
Newport Consulting conducted a research project with the prime objective to assess the real state of play of businesses in the current economic climate. Newport was particularly interested in the differences between SMEs and large companies in their approach to managing through a downturn.*
This report provides insight into how businesses are managing and what their outlook is for the next financial year. It draws upon responses from Australian companies to an online survey that asked a series of questions on business confidence and operational excellence. The survey was conducted between 01 July and 30 September 2009 and covers business expectations for the next twelve months ending June 2010. Of participating companies, 53% are SMEs and 47% are large companies with more than 200 employees. 16.1% of surveyed companies are ASX200 listed with a combined market capitalization of A$55.9 billion. It includes companies within agriculture, business services, financial services, healthcare, manufacturing, mining, oil and gas, retail, telecommunications and wholesale.
The report’s key findings include:
- 92% expect growth in the next 12 months.
- 54.8% expect growth of between 10–49% and 21% expect growth of more than 50%, 92.3% of which are SMEs.
- 32.3% expect the economy to affect their business for between 6–12 months. Only 16.1% said their business will be affected for more than 2 years.
- More than 60% believe it is more difficult to get funding in the current business climate.
- 25% of SMEs said growth is their biggest concern in the next 12 months.
- 26.4% of large companies said that cost management is their biggest concern.
- 83.9% admit to hidden waste within their organisation.
- 91.9% said that they are not running at optimum and could improve operations.
- 38.7% have no formal operational excellence policy in place.
- 33.9% have no formal operational improvement target set.
*Please note that the data reported in this paper is based on the responses of the companies that participated in our survey. Percentages are representative of the survey sample. *We define SMEs as businesses with up to 200 employees and revenue up to $100 million. Large companies are those with more than 200 employees and revenue of more than $100 million.