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Nearly half of small businesses are on track to hit their business targets this year according to the latest SME Growth Index report from ScotPac.
But they are still facing challenges in hiring staff and chronic staff shortages that may have an impact on them achieving those targets.
ScotPac’s biannual SME Growth Index, is Australia’s longest-running research report on small-business sentiment towards growth prospects.
The full report is scheduled for release in September and incorporates feedback from 700-plus industry participants on topics encompassing revenue forecasts and profit expectations, cash flow management practices, and growth financing intentions.
According to the latest round of the SME Growth Index 46 per cent of the businesses surveyed are on track to hit their business targets for this year.
However, two in five (40 per cent) of those businesses projecting a revenue shortfall have nominated staff shortages as a major contributing factor. Larger SMEs were the most affected, with 48 per cent of those with revenues between $5 million to $20 million impacted by gaps in our workforce related to COVID-19 border restrictions.
Another leading factor for underperforming SMEs was working capital constraints, with a third of businesses stating poor access to finance was holding them back from reaching their revenue targets. This was highlighted by lengthy loan approval times reported by Australian SMEs, with the average now stretching beyond a month to 35 days.
Rounding out the top five reasons preventing SMEs from reaching their financial targets in 2022 are:
Another 6 per cent of SMEs said poor execution stopped them from achieving revenue targets, and 11 per cent said they just didn’t have enough time in the day.
ScotPac chief executive Jon Sutton said the findings showed that many SMEs are still in recovery mode and looking for solutions after two years of economic disruptions.
“This report reinforces the fact that many SMEs need support, including fast access to working capital, as they continue to recover from the far-reaching impacts of COVID-19,” Mr Sutton said.