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Home > Resources Centre > Useful Links > Whatever you do, do something
Whatever you do to survive, do something
Anthony Sibillin
AFR - 24th October 2011
Whatever you do to survive, do something
Anthony Sibillin
Do cut costs, do not discount, do seize opportunities but above all, do not do nothing, accountants are warning business clients who have low growth prospects.
An increasing number of small and medium-sized enterprises are seeking advice as they realise the post-global financial crisis recovery is weaker than expected and confined to mining.
While high cash-reserves mean they do face the same threat as many SME's do, companies are nonetheless taking a cautious approach to new investments.
The chief executive of Clements Dunne & Bell, Paul Clements, said more SME's were struggling than at any other time since the GFC.
"Some businesses have seen reductions is revenue and price and gross margin pressures, which affects the bottom line and cash flow" he said.
Exporters hit by the high Australian dollar, retailers and property related businesses have the worst prospects. The director of ThePrimeAdvisoryGroup Peter Gooden warned discounting would heighten margin pressures and the risk of business failure.
He advised business owners to focus on increasing sales to existing clients while trimming variable costs such as marketing and staffing.
The marketing partner of Sydney firm Nexia Court & Co, Ian Stone, said SME's "can't sit on their hands" and wait for an economic recovery that might never happen "you've got to reinvent yourself to get back into the market often in areas they may no have considered or done enough work on previously," he said.
Paralysis posed similar risks for companies, said Ernst & Young transactions leader Graeme Browning. "Those who stand on the sidelines risk handing the advantage to competitors," he said. "Market volatility appears here to stay for a while and businesses must get used to this dynamic."
An increasing number of small and medium-sized enterprises are seeking advice as they realise the post-global financial crisis recovery is weaker than expected and confined to mining.
While high cash-reserves mean they do face the same threat as many SME's do, companies are nonetheless taking a cautious approach to new investments.
The chief executive of Clements Dunne & Bell, Paul Clements, said more SME's were struggling than at any other time since the GFC.
"Some businesses have seen reductions is revenue and price and gross margin pressures, which affects the bottom line and cash flow" he said.
Exporters hit by the high Australian dollar, retailers and property related businesses have the worst prospects. The director of ThePrimeAdvisoryGroup Peter Gooden warned discounting would heighten margin pressures and the risk of business failure.
He advised business owners to focus on increasing sales to existing clients while trimming variable costs such as marketing and staffing.
The marketing partner of Sydney firm Nexia Court & Co, Ian Stone, said SME's "can't sit on their hands" and wait for an economic recovery that might never happen "you've got to reinvent yourself to get back into the market often in areas they may no have considered or done enough work on previously," he said.
Paralysis posed similar risks for companies, said Ernst & Young transactions leader Graeme Browning. "Those who stand on the sidelines risk handing the advantage to competitors," he said. "Market volatility appears here to stay for a while and businesses must get used to this dynamic."
AFR - 24th October 2011
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