Small is indeed beautiful when it comes to business structures. Economists who have for long trumpeted the virtues of being small should be able to pat themselves in the back one more time as small enterprises show great resilience, not to mention optimism, despite fears of a global economic crisis.
A survey by American Express reveals that a majority of the nation’s small businesses are quickly adapting to the adverse economic conditions and a third expect to increase profits despite from a slowing, and fragile, global economy.
“In a climate of economic uncertainty, small businesses are looking at any external changes that affect the overall health of the business and are responding accordingly,” said Jason Fryer, head of small Business Services at American Express. “Australian small business owners understand that change is necessary to survive and prosper.”
The American Express study, carried out by Galaxy Research, surveyed 1,031 small business owners across Australia between 16 September and 19 September. The businesses had annual turnover of up to $2 million.
The following are the survey’s major findings:
• Nearly two-thirds (65%) of small businesses changed in some way to meet the shifting demands of the market; 10% of the firms are now “unrecognizable” to their original line of business.
• Businesses with turnover of between $200,000 and $2 million were the most likely to have changed (82%), suggesting financial rewards for businesses that adapt to market conditions.
• Over two-thirds of the firms changed product range and services; 47% changed their target customer audience; and 25% brought about changes in business structure.
• 41% of the firms surveyed expect to see profit stay the same; 36% expect profit growth; and a high 62% plan to invest in their business over the next 12 months.
“While the majority of small business owners acknowledge that both the global and Australian economies will impact their business in the next 12 months, there is a prevailing sense of getting on with the job among operators in this sector,” said Fryer. “Australian small businesses are resilient and are open to changing with the times. This is extremely positive, given that small businesses make up 96% of Australia’s business community.”