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While business confidence has markedly improved, the end of JobKeeper will see many small businesses vexing over cash flow and weighing up restructuring plans, a new survey has found.
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Small business still uncertain of recovery as JobKeeper ends
29 March 2021
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9 minute read
The results of ScotPac’s biannual SME Growth Index released on Friday show that while business confidence has bounced back, 65 per cent of small businesses said they’ll move to restructure in 2021, and one in five would likely make arrangements with the ATO to manage their cash flow.
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“This SME intention to restructure includes looking at other ways to fund their businesses,” said Jon Sutton, CEO at ScotPac.
“I believe business owners are on the right track with this intention, because to be in a position for recovery and growth, it’s essential to have adequate funding in place.”
Those considering their restructuring options symbolise a high level of uncertainty around their paths to recovery, with 34 per cent of respondents moving to either close or sell their businesses if the market doesn’t see significant change, up from 31 per cent in 2020.
Of the 1,253 businesses surveyed, one in four reported being explicitly unsure of how they could recover, while one in four had cash flow issues after being denied credit.
Despite the uncertainty, small business owners aren’t entirely pessimistic about the year ahead. More than 37 per cent said they’re feeling more relieved and positive about their business prospects for 2021 than they were for 2020. However, only 7 per cent reported feeling “enthusiastic” about the remainder of the year.
Mr Sutton said the overarching sentiment of the results represents a desire for small businesses to return to “business as usual”. But in doing so, he said, they should seek expert advice.
“Given how bad things could have been, you could say it’s astounding how well the SME sector came through such a challenging year,” he said.
“There are positives, but we have to be realistic about what lies ahead. We still have half of the businesses polled this round saying they are not yet ready to invest back into their business.”
Mr Sutton said that it will be difficult for the economy to truly recover without the help of small businesses.
“It will be hard for the economy to really take off until more small businesses are comfortable and willing to do so. Many businesses are forecasting growth, but many are not out of the woods yet.”
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