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SMEs take steps to protect their business in downturn

St. George Corporate & Business Bank research has revealed a growing number of small to medium enterprises (SMEs) are taking steps to protect and strengthen their business against the challenges of the economic crisis.

The research commissioned by St. George Corporate & Business Bank and conducted by Galaxy Research, analysed the responses of over 1,000 owners or managers of businesses employing between two and 199 people across Australia; and found that not only are SMEs realistic about future recovery, but are actively taking steps to strengthen their business.

SMEs are employing a number of strategies to ensure they remain competitive, with particular focus on core customers (70 percent), business fundamentals (67 percent), cutting costs (64 percent), new business development (57 percent) and increasing product and service offerings (55 percent).

SMEs are also taking steps to financially protect themselves, with one in four holding more cash in the bank to provide a buffer against foreseen and unforeseen impacts of the downturn.

Greg Kenny, general manager of St. George Corporate & Business Bank, said the research revealed some surprising findings on the determination and resilience of Australian SMEs.

“It’s encouraging to see that many businesses are taking these steps to protect themselves. Effective cash management is critical in a downturn. Budget planning, banking consolidation, credit control, cashflow finance and maximising interest on deposits are just some of the ways SMEs can achieve strong cashflow.”

In order to help strengthen their business, four in five SMEs are seeking out information and advice on how to protect and support their business; including sales and marketing (38 percent), cashflow management (28 percent) and finance and banking (27 percent).

Kenny said it is encouraging that SMEs are doing all they can to ensure their business remains profitable and that they are working hard to adapt and evolve through this cycle.

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Jessica Stanic

Jessica Stanic

Jessica has a background in both marketing and journalism and is dedicated to making the website the leading online resource for small to medium businesses with ambitions to grow.

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