Australia’s private business community now faces the challenge of making the changes necessary to take advantage of returning economic growth.

As this Private Business Barometer illustrates, private businesses have generally benefited from the better-than-expected performance of the Australian economy during the global economic downturn and financial crisis. The sector has also benefited, as has the business community as a whole, from continued demand fuelled by the economic stimulus packages released by the Federal Government.

However, many businesses are showing a worrying propensity to sit and wait for growth to happen rather than reposition and restructure their operations to get the best out of a return to stronger demand. Approximately 80 per cent of respondents are not actively planning for the upturn, and of those that are, the most popular measure is to
secure funding.

This indicates large parts of the private business community are prepared to risk being left behind by competitors that are more willing to lock down where they want to be and decide how they are going to get there. These successful businesses will be able to combine an entrepreneurial flair for identifying and seizing opportunities with the discipline and rigour that adhering to a plan delivers.

Of course, this is easier said than done. As with every Private Business Barometer to date, funding the business remains the number one challenge for owners, directors and senior executives. In addition, financiers are attaching more stringent conditions to loans and being more careful who they give money to.

One such condition is the presentation of a business plan, which this Private Business Barometer reveals is strongly linked to success in meeting growth targets. In fact, this Private Business Barometer reveals the share of businesses without a plan that exceeded their growth targets fell to almost negligible levels, while businesses with a plan performed strongly in meeting their targets. This reinforces the fact that a business plan provides a clear focus to owners, directors, managers and staff, and improves your ability to move to a plan ‘b’ or ‘c’ if existing growth initiatives falter.

On another front, private businesses seem slow to embrace the use of traditional and online networking. The community has generally not yet recognised the potential of social networking tools such as Facebook and Twitter to build brands and target customers. In addition, nearly half of respondents are not taking advantage of the knowledge, networking and lobbying activities offered by business associations.

By participating in these networks, private business owners can gain access to peers that have met and overcome similar challenges to those that may be experiencing it for the first time. The advice gained in these situations may be invaluable in steering the business and its owner in the right direction. In addition, the relationships and friendships that emerge from networking can also result in direct business opportunities.

Overall, the Private Business Barometer shows private businesses are performing strongly and are optimistic about the outlook. By outstripping the growth of the general economy, the private business community has demonstrated a creditable resilience and understanding of its market and customers. The opportunity is there to build on this by embracing the possibilities of change.




Webcast - Gregory Wil