Seven key challenges set to hit SMEs in 2013
Another year is underway. Most businesses are now back on deck and it’s time to think about what is likely to occur over the coming months.
We all have to react to the things that occur around our business. However, if you can anticipate some of what is likely to occur then you can be better prepared. Here is my list of what I expect to occur:
1. February cash crunch
We are heading into traditionally the toughest cashflow month for SMEs. After the Christmas break, families and businesses are coming back to the new year and counting up the Christmas bills.
There is also the cost in starting up for the new year. In some cases there has been a dislocation of cashflow and, add to this, you are only weeks away from your next BAS payment. It all means that cash will be tight.
If you are relying on debtor collections, get on to them early. For many businesses it will take up to Easter to get back to a more normal pattern. Look closely at your cashflow.
2. Increase in businesses going bust
Unfortunately some businesses will not make it. 2012 saw an increase in insolvencies both of small and much larger businesses.
This is likely to continue into this year. Look out for the warning signs and also watch out for any of your account customers who appear to be in a distress position.
Don’t get caught out by them.
3. Tax office getting tougher
The government is under pressure with its budget so it will be applying the pressure to the ATO to increase its tax take.
This is likely to mean more tax audits and more areas being reviewed where there could be a leakage from the tax system.
Make sure that you have your tax position right and you have the appropriate records in place to prove what you have done. Remember the onus of proof is on you.
Also if you owe the Tax Office money then expect them to be chasing harder. Get an arrangement in place that you can meet.
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4. Resources sector, active but easing
If you feed off the resource sector, expect it to ease into 2013. It will still be active but not to the previous levels.
Don’t plan your business around 2011/12 levels in this sector.
5. An election year
We will have a federal election during this year.
Elections cause a dislocation to business. People put off decisions, especially buying decisions. Allow for the fact that this will occur.
6. More mergers and acquisitions
Asset prices are about as low as they are likely to get. And a lot of businesses are looking to grow to achieve more scale.
A result of this is that there will be more mergers and acquisitions. If you are a seller, this could be your year.
7. Smart businesses will do well
Businesses that stay ahead of their market will do well. There is enough activity out there.
You just need to get the business ahead of your competitors. You need to understand what is happening in your industry, what is likely to happen over the coming year and then move quickly.
Greg Hayes is a director of Hayes Knight and specialises in taxation and business planning advice.