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Debtor Finance, Debtor Finance Blog

Small business revenue growth high, but cash flow remains a concern

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Australian small businesses are showing positive signs in revenue growth, but still need to get a handle on cash flow. Australian small businesses are showing positive signs in revenue growth, but still need to get a handle on cash flow.

A new report on Australia's small business scene indicates that revenue growth for these companies is at their highest level in three years.

MYOB's March 2014 Business Monitor Report found that an increasing number of Australian small business owners are reporting annual revenue growth, displaying a level of confidence not seen since March 2011.

Just under a quarter (22 per cent) of small businesses said their revenue was on the up over the last year - however, MYOB pointed out that this was an improvement on their previous five surveys. In line with this positive rise, the number of businesses reporting a fall in revenue was down, with just over a third (34 per cent) of companies reporting a decline in revenue.

Looking ahead, small business operators in Australia are appearing to carry this confidence with them into the remainder of 2014. More than a quarter (34 per cent) said they expect to see their revenue rise in the next 12 months - a significant boost from the 25 per cent recorded in the previous report.

MYOB CEO Tim Reed was in no doubt as to the factors behind this growth in business confidence.

"Buoyed by record-low interest rates and a lower Australian dollar, local SMEs' hard work and resilience is now bearing fruit," he said in a March 11 statement.

"I'm delighted to see more than one in five reporting increased revenue and an even higher proportion - one in three - expecting a better year ahead."

The MYOB survey, however, also did draw attention to some of the biggest challenges Australian companies continue to face, with small business cash flow still a pressing issue. In fact, cash flow is currently the second biggest 'pressure point'; for small businesses, behind only fuel prices.

Companies in construction and trades industries felt the most pressure from cash flow, the report indicated.

To ensure a poor cash flow doesn't drag down your business's confidence this year, make sure you assess all the business funding solutions available to you.