Too few businesses seek strategic or risk management advice, national survey shows.

Despite the unprecedented challenges small businesses faced in the past year, too many still go it alone rather than call on expert assistance, according to the CEO of Australia’s largest non-bank lender for SMEs.

ScotPac CEO Jon Sutton said the latest SME Growth Index research shows fewer than one in five small businesses (18%) seek out strategic planning assistance, only 14% get M&A advice and just one in 10 turn to the experts for help with risk management.

ScotPac’s SME Growth Index is Australia’s longest-running in-depth research on small business growth prospects.

“Small business owners are going it alone despite the unprecedented challenge of the pandemic last year and recovery this year,” Mr Sutton said.

Accountants, brokers, bookkeepers and other trusted business advisors should be front and centre for SMEs to help them navigate these complex times.

“Yet the research shows business owners have so much uncertainty about the right way forward. Around two-thirds are looking at restructuring either their business set up or the way they fund the business in 2021, the yet so few are seeking expert advice to help them restructure.

“Any restructuring and transformation should be supported by advice from experts and also by adequate investment in the business,” he said.

The research found that tax and compliance advice are overwhelmingly the main reason for small businesses to seek support from their trusted advisors – this was nominated by 93% of respondents.

Asset acquisition and disposals (31%) and succession planning (27%) are also key areas where SMEs look beyond their own business for guidance.

SME Growth Index data pinpoints key areas where small businesses should be calling on experts for advice:

  • One in four business owners are unsure about what measures to put in place for recovery
  • One in four were declined from a lending product, causing cash flow issues
  • One in three turn to trusted external advisors for help separating their personal and business assets (this is arguably such a dominant issue due to the over-reliance of SME owners on funding their business via their own residential mortgage)

Strategies to manage working capital

The SME Growth Index found the strategies SMEs planned to manage working capital in 2021 were:

  • undertaking cashflow forecasts (the key strategy nominated by 28% of all SMEs – but around half of larger SMEs with $5-20m revenues)
  • focusing on existing customers (27.5%) or new customers (22%) to grow revenue
  • making arrangements with the ATO (17%)
  • using invoice finance to smooth out cashflow peaks and troughs (16%)
  • increasing their overdraft (12%)

Mr Sutton said it was pleasing that more than 1 in 6 businesses were looking to invoice finance to manage their cashflow. He said financial solutions such as invoice finance, trade finance and asset finance would come into their own during the pandemic recovery.

“We would like to see more small business undertake cashflow forecasts because our research found that only a quarter of SMEs do so – this is fundamental to success, and this is something accountants and brokers can be reinforcing to their clients.”

He said the fact that so many businesses are looking to restructure and are looking for ways to manage their working capital provides a perfect opportunity for accountants and brokers to initiate discussions with their SME clients.

“Australia’s small business sector relies heavily on brokers and accountants, who understand the importance of cashflow and have a good understanding strategies and solutions to enable business success.

“It’s the perfect time for accountants and brokers to ask their small business clients what changes they are looking to make, whether they have a clear view of how much working capital this will require, and if there are shortfalls help them find new ways to fund the business.

“Non-banks such as ScotPac are ready and able to help small businesses, whether it’s with trade finance, asset finance or invoice finance, where the business owner doesn’t have to take out a loan or make repayments but is able to effectively get an advance on income they have already earned from their customer invoices,” Mr Sutton said.

SME Growth Index: Twice a year since 2014 market analysts East & Partners conduct this research, Australia’s longest-running in-depth research on small business growth prospects. A representative national sample of 1253 $1-20m revenue businesses were surveyed and interviewed.

ScotPac is Australia and New Zealand’s largest non-bank business lender, providing funding to small, medium and large businesses from start-ups to enterprises exceeding $1 billion revenues. For more than 30 years ScotPac has helped thousands of business owners succeed, by unlocking the value from their business assets. Whether it is purchasing stock, investing in vehicles and equipment, improving cash flow or accessing additional working capital, ScotPac can help. 


For more information contact:
Kathryn Britt
Director, Cicero Communications
[email protected]
0414 661 616