The rising challenges of inflation, increasing interest rates and workforce issues have not deterred small and medium-sized businesses (SMEs) from planning for business growth and strengthening their customer proposition in 2024. 80% of them are set to employ one or more strategies to meet their business goals and promote expansion in the upcoming months.
A new study led by CBA, in collaboration with YouGov, reveals a spotlight on innovation and investment among SMEs in response to market difficulties, with a heavy emphasis on marketing, novel product and service development alongside staff training and development. This research acts as a supplement to the latest CBA data indicating an optimistic trading period for SMEs as they approach the holiday season, demonstrated by a 5.4% rise in earnings during Q2 of FY24 compared to Q1 of FY24.
Rebecca Warren, Executive Group Manager of Small Business Banking at CBA, highlighted that despite the challenges posed by inflation, increasing interest rates, and workforce issues, small business owners are showing a proactive approach to drive growth in the coming months. She emphasised the bank's commitment to supporting these businesses and their entrepreneurs. The focus is on helping them navigate difficulties, promote growth, and position them for success.
Rebecca Warren remarked, “Despite a difficult environment posed by inflation, rising interest rates and workforce challenges, the research shows small business owners are planning to take proactive action to drive growth over the coming months. Our focus is on backing these businesses and the entrepreneurs that run them. We want to help them drive growth and set them up for success,"
The study brings to light the primary strategies that SMEs are likely to adopt to drive growth. The predominant ones include investment in marketing, constituting 45%, and staff, making up 34%. Other tactics in the pipeline encompass price review, which is planned by 31% of the businesses, investment towards the development of new products or services, also considered by 31%, and diversification of stock and the supply chain, which is being mulled by 13% of the establishments.
The findings suggest an optimistic picture where SMEs are not only contending with the adversities but also actively charting out plans to leverage opportunities for growth in 2024. As these establishments engage with various strategies and analyse avenues for investment, it represents a positive stimulus for the sector as they navigate through the economic difficulties.
The study was conducted in collaboration with YouGov, a global public opinion and data company that specialises in online market research and analytics. The company was founded in 2000 by Stephan Shakespeare and Nadhim Zahawi. YouGov gathers data through online surveys, social media analysis, and other digital means to provide insights into public opinion, consumer behaviour, and market trends. They conduct research on a wide range of topics, including politics, business, technology, and popular culture.