Welcome To 2010/11 – Happy New Financial Year!
The MYOB Business Monitor Report released in April 2010 summarised what 1,000 SME operators had identified as the main pressures on business owners in the next 12 months. These included:
- fuel prices
- cashflow management
- price margins and profitability
- interest rates
- competitor activity
- customer late payments
The survey indicated that "54% of business owners surveyed by MYOB expect economic recovery to begin to improve from its present position in the next 12 months". The SME operators identified 6 areas which currently present them with the most difficulty:
- "knowing which government legislation and compliance changes are relevant to your business;
- tracking and chasing up late payments;
- knowing what changes to make to achieve your business goals;
- managing the cashflow in and out of your business;
- getting the right information to make informed business decisions; and
- preparing the quarterly Business Activity Statement (BAS)."
The Dun and Bradstreet Business Expectation Survey identified the following areas of concern for SMEs: "access to credit, interest rates, and wages growth."
Even through banks slightly increased lending to businesses in May 2010, access to credit is still identified as a major problem. Now is the time to review your 2010/2011 forecast factoring in how the foregoing issues affect your business, but there are also some other issues to consider.
Firstly, the good news!
- The government has revised unemployment forecasts... now expected to be 5%, instead of 6.7%.
- The Reserve Bank has left the prime bank interest rates at 4.5% (7 July 2010) with an increase expected at the end of 2010.
Not so good news:
- inflation risks remain;
- overeign debt issues in Europe remain a potential major problem for the world;
- China slow down; and
- a federal election will be a confidence negative for business until the result is known.
So overall it is likely to be a stop/start boom. There will be winners; but unfortunately there will also be losers. Now is the time to update and prepare your documentation and systems to ensure your success in business. This relates to budget, cashflow forecasts, business plans and then use these documents to negotiate with your banks and lenders to ensure you have sufficient funding available to fund debtors, stock, work in progress and capital expenditure. It is also a good time to get your team ready so you're able to service your customers' demands from the emerging boom. If you would like our assistance in helping you plan for the 2010/11 fiscal year, please contact us.