Weak competitors have larger SME's smacking lips

The most common opportunity to emerge from the economic recession is the chance to knock over a competitor, according to the first KPMG "Mood of the Market" survey of small and medium-sized enterprises, released this morning.

The global accounting, tax and audit adviser has joined the bandwagon of companies producing new, regular measures of economic activity and attitudes. The survey asked a short questionnaire of 189 firms in Auckland, Tauranga, Hamilton, Wellington, and Christchurch between August 6 and 13.

Asked what opportunities their businesses were likely to take as a result of the economic downturn, 48 per cent nominated "increase in market share due to competitor weakened position", although firms with annual turnovers exceeding $10 million were more likely to cite this than firms around the $1 million turnover mark.

The survey also suggests big shifts in staff attitudes and companies' performance culture were two other positive impacts from the recession. Just on 40 per cent of the firms questioned said their company culture had shifted to a greater focus on outcomes, while a third reported employees had a greater focus on their own performance. Again, this trend was more marked among larger firms.

Views about the year ahead were consistent with other business sentiment surveys, with 51 per cent predicting a "slight increase" in economic activity, while managing cashflow, liquidity, costs and profitability outstripped other possible causes for concern, and three-quarters of those sampled expected to maintain staff at current levels for the next 12 months.

Some 41 per cent of respondents were keen to see the Government introduce new incentives for investment or innovation, and a further 31 per cent thought the most useful thing the Government could do right now would be to cut tax compliance obligations for small and medium-sized enterprises.

Almost one-third of firms surveyed had no formal business plan, but half of those which do were reviewing performance monthly, again with a bias towards more formal planning and regular review among larger SME's.

While 8.5 per cent of firms reported results in the last financial year were "within 20 per cent above forecast", 14.3 per cent reported being "within 20 per cent below forecast".

The survey also found strong support for a common Australasian currency, with 52 per cent of those surveyed in favour, and 46.5 per cent against.

-BUSINESSWIRE