SMEs pinning business success on interest rate cut
Business owners are holding out for further interest rate cuts, with around a third of SMEs in a survey listing interest rates as a key influence for the success of their business.
Bentley’s The Voice of Australian Business Survey 2016 which surveyed 314 SMEs, revealed that 30 percent of SMEs viewed interest rate cuts as the domestic event most likely to positively impact their business.
The research further showed that 25 percent of SME owners saw the re-prioritisation of the small business portfolio by the Federal Government (removing it from cabinet) as having a positive impact on their businesses, while 14 percent saw it as a negative.
Despite SME owners’ hopes there would be a further rate-cut, managing director of Bentleys Perth Phil Rix assured owners that rate-cuts had minimal impact on business performance.
“While almost a third of SMEs were hoping to see another interest rate cut to help spur business growth in the face of other domestic economic challenges, the impact to date of cuts has been minor and marginal,” Mr Rix said.
“For this reason, we encourage business owners to focus instead on the things within their control and that will help them to attract new customers, grow sales, and improve profits.”
Mr Rix said SME owners should alternatively focus on their marketing strategy, assessing their business plans, and improving systems and processes to save time and money.
“As we head into Christmas season for example, businesses should take stock and review how business is going – ask yourself if you can better manage cashflow; set up a budget; review your debtors and your suppliers,” Mr Rix said.
“The results could be just as positive as another interest rate cut, and they will be a lot more certain.”