A recent report from Servcorp, the biannual Australian Business Growth Monitor, has found that 56% of organisations failed to raise any revenue in 2013, despite a previous study which reported that many business owners were cautiously optimistic about growth last year.
It seems that the problem has been surrounding difficult market conditions, a lack in consumer spending and customer budget constraints. Of course, the past few years have been difficult globally for many companies, so what can you do to ensure that your company has sustainable growth even when times are hard?
According to Servcorp, the reason for the lack of growth isn’t for the want of trying. Businesses are working harder than ever to win new clients, targeting even those with lower budgets which they may not have in more prosperous times. However, this targeting has led some businesses to expand their client base, but not their revenue.
It seems that for the most part, the problem lies in a failure to change, as the study found that those industries which could be described as “the bedrock of Australia’s economy” are struggling in the current climate.
It found that
- 54% believe manufacturing to be on the decline
- 34% believe mining to be a declining industry
- 30% think agriculture is on the way out
However, other industries are expected to grow including:
- Healthcare – 40%
- Professional services – 36%
- Construction – 32%
With this in mind, those companies that are currently struggling to achieve growth should look at getting in other sectors if their business is to survive. The problem with this is though that many Australian businesses are reluctant to branch out and even more so when it comes to expanding into new, foreign markets.
Export Equals Growth
Just 6% of those surveyed in the report said that they would consider expanding into markets overseas and this perhaps is why many businesses are stagnating. The internet has given businesses a perfect opportunity to do so though, it’s now easier than ever before to communicate and collaborate across borders.
Many of those that took part in the research didn’t have any firm reasons not to expand either. Most cited a lack of knowledge at local market level, whilst others said that entry costs were holding them back and more stating that the thought of employing staff in another country was enough to stop them taking the leap. However, all of this really just needs some research and planning in order to implement an overseas expansion.
Whilst many Australian businesses might be reluctant to make the move to enable growth, they also said that it’s now time for the new government to make good on some of its promises. Over half of those surveyed said that the government could make the biggest impact and enable growth in small business by:
- Cutting taxes
- Stimulating the economy
- Reducing regulation
However, some sectors are thriving, such as the technology sector, especially with regard to mobile apps. These are of course easy enough to export, as are many tech products, and it seems that Australia, like the rest of the world, is now seeing something of a boom when it comes to jobs in the tech sector.
The growth rate in the overall number of people employed by the tech industry has now outpaced both the US and the UK, which indicates a healthy overall market.
According to Michael Mandel, author of the report Jobs in the Australian App Economy, app development in particular is “well positioned for future growth”.
“The major take-away is that Australia has a good start on the digital economy, especially when viewed from the perspective of mobile apps. This debate is at a fever pitch in both the United States and Europe, especially after the recent NSA revelations.,” Mandel says.
“As this sector continues to expand globally, this opens up new opportunities for Australia to become an exporter of apps and app-related services, especially given the current international importance of English-language markets.”
However, he too warns that government needs to strike a balance between “essential and excessive regulation,” especially when it comes to areas such as data privacy. He goes on to say that when regulations become tightened, more obstacles are put in the path of growth.
For businesses then struggling to gain any growth, it’s necessary to become more innovative and perhaps a little braver when it comes to looking into export. Declining industries should look at different routes into other sectors too. For example, manufacturers could look at developing products which could serve the fast-growing health care industry.
Technology as an enabler
Investment in technology is seen as an enabler of increased growth, and a key focus for many companies - with 64% of those surveyed saying that they plan to invest in tech in the coming months.
Spending is planned in:
- Website upgrades (33%)
- Social media (26%)
- Cloud services (16%)
In order to facilitate growth and increase efficiency and innovation then, it’s essential that businesses look to tech to ensure that they remain viable for the future.