76 per cent of SMEs are expecting customer demand to rise or stay the same this Christmas, according to the Commonwealth Bank’s biannual SME Confidence Report released today.
Over 400 SMEs with an annual turnover of $500,000 to $10 million were surveyed for the report, which revealed 43 per cent are expecting to see an increase in revenue and profit from last year.
“Given the significance of the Christmas trading period, it’s important that businesses ensure they are well prepared to capitalise on increased customer demand,” said Adam Bennett, Executive General Manager Local Business Banking, Commonwealth Bank.
“With six weeks until Christmas, there is time to put the right plans and resources in place to meet their customer needs and make the most of a bumper Christmas.”
The report, which explores the key challenges and opportunities surrounding SME’s in the current economic environment, revealed 87 per cent are predicting business conditions will either improve or remain the same over the next 6 months. This marks a 2 per cent drop from the SME Confidence Report released in April 2014.
Macro-economic factors were highlighted as a concern to SMEs, with 47 per cent saying Australia’s economic conditions were having a negative impact on their business confidence. 39 per cent pointed to global economic conditions as a cause of business diffidence.
Delivering to customer and client needs was found to be the biggest day-to-day challenge experienced by SMEs (62 per cent), followed by sales and marketing (60 per cent), staff management (57 per cent) and financial management (57 per cent).
As the Christmas period approaches, SMEs are embracing a variety of strategies in order to prepare for an increase in demand. The improvement of customer service is the focus of 46 per cent of SMEs, followed by the fine-tuning of their product offering (44 per cent) and investing in marketing and promotions (40 per cent).
While many SMEs are optimistic about the Christmas period, 25 per cent are expecting demand to be down compared to other times of the year. Mr Bennett said a decline in business activity over Christmas could provide an opportunity for SMEs to focus on other areas.
“If business slows down over the festive season, there are a range of measures that can be taken, from offering seasonal deals to encouraging staff to take holiday leave over this period. You should also see this quieter time as a fantastic opportunity to develop a business plan for the year ahead.”