New financial year, new business prospects

Small businesses are largely optimistic about what the coming financial year has in store, although many have so far failed to put a plan in place.

This is according to research from Commonwealth Bank, which showed many companies are optimistic about making financial progress over the next 12 months. In fact, 45 per cent predict a rise in revenue, compared to 28 per cent who forecast a decline.

Meanwhile, firms with a turnover of less than $1 million were found to be the less inclined to have a business plan in place. This compared with 22 per cent of companies turning over between $1 million and $10 million.

Companies of any size need to make sure they have a plan for the future and the start of the new financial year is the perfect time to put one in place.

A sound plan should consider all aspects of a firm, including cash flow predictions, expansion prospects and of course financial products such as business insurance.

Adam Bennett, executive general manager for local business banking at Commonwealth Bank, said the first steps should be to identify business goals and any primary drivers for success.

"While it's encouraging to see some small businesses have revised their new financial year business plans, many are not using this tool to better identify opportunities and understand future risks facing their business," identified Mr Bennett.

Small businesses were also asked to name their primary objectives for the year ahead. A total of 29 per cent want to focus on cost reduction, while 23 per cent will invest more heavily in sales and marketing.

Improved used of technology was named by 14 per cent of those polled, while 55 per cent said they were concerned about conditions in the domestic economy.

Other concerns included government policy (52 per cent) and rising fuel and energy costs (41 per cent).