Deloitte Private – CBC SME Survey Summary of key findings1 Deloitte Private – CBC SME Survey Executive summary The second Deloitte SME survey highlights a sense of confidence and

Deloitte Private – CBC SME SurveySummary of key findings 22nd November , 2016

Contents

Executive summary 1

About the Deloitte Private SME survey 2

Contacts 3

Growing against the odds 4

Barriers to growth 5

Optimism for the future 6

Local success stories 7

About Deloitte Private 8

1

Deloitte Private – CBC SME Survey

Executive summary

The second Deloitte SME survey highlights a sense of confidence and optimism amongst local businesses with a 77% of businesses being optimistic about the prospects for their own businesses as well as the broader Canberra business environment. Looking further afield, they were less optimistic about the broader Australian environment.

90% of the respondents plan to grow and further develop their businesses with 38% of them planning to grow their sales nationally while 27% intend to expand into international markets to achieve growth. The respondents cited the overall economic environment as a concern in respect of their growth ambitions.

The ambitions to grow their business appear to be hampered by a series of factors cited as barriers to growth. 58% of the respondents believe that the employment regulations prevent them from growing their business while 63% cited the shortage of skilled labour in the region as a major barrier to growth. Other factors cited included taxation, inadequate space and lack of physical and financial capital.

In the past 12 months, 53% of the businesses have seen an increase in their operating costs and 51% expect costs to increase further over the next 12 months. The overwhelming majority of businesses (94%) are committed to increasing their efficiency into the future and 77% intend to diversify their products/services in the future.

Optimism in the region

Barriers to growth

Rising costs

are optimistic about the prospects for

their own business

77%

plan to grow their sales

38%

believe that the employment regulations prevent them

from growing their business

58%

cited the shortage of skilled labour in the region

63%

intend to expand into international markets

27%

plan to grow and further develop their businesses

90%

have seen an increase in their operating costs

53%

are committed to increasing their efficiency

94%

intend to diversify their products/services in the future

77%

Optimism in the region Barriers to growth Rising costs

2


About the Deloitte Private SME survey

This survey is the second in the series of our SME surveys, conducted in collaboration with the Canberra Business Chamber (CBC). This survey focusses on Small and Medium Enterprises (SMEs) operating in Canberra and the surrounding region.

With its focus solely on the Canberra region, the survey aims to highlight the current state of local businesses along with the challenges and issues being faced by them.

The survey respondents predominantly comprised members of the CBC and their kindred organisations and covered a wide cross section of the business community.

How many staff does your business employ?

1-4 employees

Non employing

200+ employees

100-199 employees

50-99 employees

5-19 employees20-49 employees

3


Contacts

Melissa Cabban Partner

Tel: +61 2 6263 7106 Email: [email protected]

Amer Qureshi Director


Peter Roberson Principal


Melissa has more than 20 years of experience in advising clients in relation to their tax and business affairs and works with some of the leading Canberra groups.

Amer has more than 25 years of professional experience gained in Canberra and Internationally. Amer has been an owner of professional services firm for more than 20 years and has an exceptional track record of client service and delivery. He is an internationally published author, trainer and workshop facilitator and has held “C” level positions internationally.

Peter has more than 25 years experience of experience in tax and business services in the Canberra region. Peter’s personalised approach to helping clients is a key reason for his loyal client base of local businesses.

4


Growing against the odds

Growing into the future

Do you want to grow your business?

of small business want to grow their business into something more in the future

90%

Confidence for the future

Compared to this time last year, how much more or less optimistic are you?

of respondents have similar or increased optimism for their business in the next 12 months.

81%

Do the current economic conditions limit your growth?

Impact of the economic environment

agreed that economic conditions are limiting their growth to some extent.

Even with the large majority wanting to grow their business,

70%

New markets

In the near future, how will your business expand?

planned on expanding sales nationally and 33% plan to expand sales globally.

Despite the willingness to grow, only

47%

5


Barriers to growth

Costs on the rise for business

saw an increase in operating costs in the last 12 months

expect operating costs to increase in the next 12 months.

53%

51%

“Rates, electricity, water increases killing businesses” Quote from respondent

“Red tape is a killer”Quote from respondent

Employment regulations

of respondents believe that employment regulations acts as a barrier to growth

58%Skilled labour shortages stunt growth

of respondents identified lack of skilled labour as one of the biggest barriers to growth.

63%

Last 12 months Next 12 months

A lot more

53%

38%

9%

51%

36%

13%

A lot lessAbout the same

Hindrance to growth

Hindrance to growth

Not at all

Not at all

58%

63%

42%

37%

What changes have you seen in operating costs in the last 12 months and what do you expect for the next 12 months?

Are employment regulations a barrier to growth?

Does lack of skilled labour hinder growth?

6


Optimism for the future

In the near future, what is your business likely to do? How much more or less optimistic are you?

The future often means change and 77% of businesses plan to diversify their products or services.

94% of business are committed to increasing their efficiency into the future.

The small business community shows a stronger optimism for their own business heading into the future.

The optimism for other businesses in the Australian market has decreased in comparison to the previous survey.

11%

66%

45% 49%

To a large extent To a small extent

41% 40%

19%

27%

47%

26%

16%

52%

32%

Much more About the same Much less

Diversity w/alt Your business

Continue w/efficiency Broader Canberra

Broader Australia

7


Local success stories

Control & Electric Rivoland Tiles Capital Recruit

First established in 1980, Control & Electric is a locally owned company that provides mechanical electrical solutions. They have been operating in Canberra for over 30 years, growing from 2 staff to today’s workforce of over 40 employees.

Control & Electric have also expanded their business across the Tasman to Christchurch, New Zealand.

Since its inception in the 1980s, Rivoland Tiles has grown to become a household name in the Canberra region. They provide tile solutions for personal and commercial purposes from their showrooms in Queanbeyan and Mitchell.

Capital Recruit is a young business that has operated in Canberra since 2014. After many years of working for major recruitment firms, the founders felt it was the right time to take the plunge into their own business.

“We were optimistic and confident in Canberra’s future when we decided to start Capital Recruit. The investment we have made in building relationships and networks is now paying off”

“The cyclical nature of the building industry presents a number of challenges. This is what led us to seek out international markets for our services.” Peter HartManaging DirectorControl & Electric

“The growth of the Canberra region has given us the opportunity to establish a really successful business. We are optimistic about Canberra’s long term future, but realize that we must continue to improve and develop our own business. This will be our major focus over the next 12 months.” Denis GuglielminManaging DirectorRivoland Tiles

“Doing business in Canberra is about relationships, adding value and delivering results. Canberra is small enough to enable us to build close relationships with our clients, yet large enough to offer us an opportunity to build a sizeable business.

Confidence in our economy, positively impacts our small business. We remain confident about Canberra’s future.

A reduction in red tape and reform of business license fees for our sector is much needed.”Sarah RajicDirectorCapital Recruit

8


Success needs support. At Deloitte, we blend your unique skills and ambitions with our deep expertise and experience. We are committed to always offering the best possible service. We get what matters and we’re there for you at every step in your journey.

We're with you.

We're Deloitte Private.

Deloitte Private is a private business-focussed practice, powered by the depth of a global Big Four firm.

Deloitte believes differentiating the needs of private businesses from the needs of large businesses assists our multi-disciplinary professionals recognise the opportunities and challenges unique to private businesses.

We anticipate the needs of private businesses and focus on delivering innovative and effective solutions, while maintaining high quality service levels.

Our local knowledge, coupled with access to our global networks, uniquely positions us to best service the Australian private market.

We believe our clients deserve the assurance and confidence of a large accounting firm, but with the strong advisor relationship, tailored solutions and affordability of a smaller firm. This where we come in.

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Our vision is to redefine the way we work with our clients through cloud-based accounting solutions that put us both on the same page. We want our clients to focus on what really matters, growing their business.

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About Deloitte Private

This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively the “Deloitte Network”) is, by means of this publication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this publication.

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About DeloitteDeloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s approximately 225,000 professionals are committed to becoming the standard of excellence.

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Documents

Deloitte Private – CBC SME Survey Summary of key findings1 Deloitte Private – CBC SME Survey Executive summary The second Deloitte SME survey highlights a sense of confidence and