Advice to Stream Line Your Business Is More Important Than Ever

This article from “in-Business” weekly newsletter highlights the importance of streamlining your business, keeping efficiency firmly at the forefront.

Business confidence fell in the March quarter after consecutive interest rate rises, according to the latest Commonwealth Bank Business SA Survey of Business Expectations.

Business confidence fell 15.9 points to 92.2 points and the slump follows a 8.5 point drop in the December quarter. Respondents blame increased material and overhead costs as well as interest rate hikes.

“Business conditions dipped further than respondents anticipated in the December quarter,” Business SA CEO, Peter Vaughan says. Almost 80% of participants said the 13-year-high interest rates would hurt their business.

“The tight labour market conditions are adding pressure to business, and 80% of respondents expect total real labour costs to increase in the June quarter.

“Despite an increase in labour participation and skilled migrant numbers, businesses are still experiencing difficulties finding skilled labour across the State.

“In order to cope with the skills shortage, local businesses must continue to be creative and flexible in sourcing new employees, through training apprentices, hiring international student graduates, re-skilling older workers and sourcing skilled labour from overseas.”

“To help minimise the negative impact on business profit in such a tight operating environment, prudent management and streamlined business practices will play an important role in maintaining margins and driving business success,” says Joe Formichella, General Manager Corporate Financial Services, SA and NT, Commonwealth Bank.

Almost 85% of respondents indicated that export sales for their businesses will stagnate in the second quarter of 2008.

“The strong Australian dollar is having an effect on exports and the majority of businesses expect the dollar to remain strong in the next quarter,” Peter says.

The survey results also indicated that more than 50 per cent of businesses are acting to safeguard their businesses with interest rate risk management strategies.