Do small and medium-sized businesses have their priorities straight? In some cases, research suggests, business owners are a bit misguided and possibly stuck in the past.
Researchers last week found evidence that SMEs remain committed to growth and value their relationships with traditional banks. However, when it comes to embracing innovation, some companies are hesitant to put adoption of technology at the top of their to-do lists. Here's where analysts have found SMEs should rethink their approach to success.
92% of mid-market firms (and 80% of small ones) say growth is their top priority, according to the latest report from American Express. The firm's Business Growth Pulse survey concluded that, while many companies prioritize growth, only 7 percent of small businesses (with fewer than 100 employees) actually expect that growth to occur. More than a fifth of mid-market companies (between $10 million and $1 billion in revenue) say they expect to grow in the next quarter, however. Small businesses say acquiring new customers is their top challenge, while middle-market companies point to less controllable factors, like the rising cost of doing business and increasing competition, as their biggest hurdles for growth.
90% of CFOs rely on their relationships with the bank when seeking advice on short-term investments, found the 2016 AFP Liquidity Survey, underwritten by State Street Global Advisors. Treasurers see maintaining their relationship with the bank as a top priority, especially amid market changes, researchers said. And according to the report, for the first time in its 11-year history, treasurers say their relationship with the bank is more important than the bank's credit ratings when deciding where to invest corporate funds. Analysts said this shows a growing confidence among corporate treasurers and CFOs in the banking industry.
One-third of SMEs cite staffing as their top challenge, found research by Vistage Worldwide. This means entrepreneurs and CEOs are struggling to identify qualified candidates, actually hire those individuals and keep them there. CEOs also cited talent as their biggest barrier to innovation, researchers noted, while the survey additionally uncovered some other trends in small business hiring practices that change the way companies are run. For instance, 83 percent said their staff is comprised of individuals from multiple generations, and an influx of millennials means nearly two-thirds of the companies surveyed have had to adapt employee management styles appropriately.
29% of Aussie SMEs say digital disruption is a threat to their business, nearly the same number (25%) that said digital disruption presents an opportunity. Researchers at Bentleys for its Voice of Australian Business survey said that the figures uncover a lack of understanding among SMEs when it comes to digital disruption and how businesses can embrace technology. The firm's managing partner, Michael Ruggiero, said that, when appropriately integrated, "digital technologies should create efficiencies that not only improve the bottom line but free up time for business owners to spend on more important activities."
5% of small businesses say their accounts payable process is fully automated — a measly number, says business services firm V1. The company commissioned a report, with research conducted by APQC, and found that nearly half of the businesses they spoke with admit their AP processes remain paper-based, while nearly the same percentage said their AP departments are at least semi-automated. Plans to increase automation, however, are on the rise, with 39 percent reporting expectations of doing so. In a statement, V1 Managing Director Janette Martin said there is "no reason" these companies can't be fully automated considering the technology and services available to them today.