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Small Business in 2018
With the first quarter of 2018 behind us, and tax time fast approaching, now is a great time to have a look at how the year has treated small businesses; and what the rest might hold. Renewed volatility in the global market started the year off on shaky ground, however the outlook for small businesses, and that of their owners, looks more positive as the year rolls on.
How Early Volatility can affect Small Business
On the whole, world equities were down 1.3% in the first calendar quarter of 2018, which is a relatively inconsequential number until you look at the journey to get there. January saw a global rise of 5.3%, February brought a fall of 4.1 percent, then a further 2.2% in March. Even within this incredibly erratic performance, the S&P index noted three consecutive days within March with more than a 2% swing. This can have a few different impacts on small business. An example is the strength of currency, particularly upon business who import and export goods internationally. If, for example, a business imports goods from a country with a weaker currency, the low comparative costs of those goods puts them in a strong position to make a profit. If the currency becomes too volatile, however, its purchasing power becomes too unpredictable and can potentially affect trade in the long run.
Response to Initial Uncertainty
The Westpac-Melbourne Institute’s SME index rose 1.3% in the quarter ending March, despite the global and local market uncertainty. Even with what seems to be a relatively uninspiring economic backdrop this year, SMEs appear to have a fairly positive outlook, with two in five increasing investment levels in the past year, one-third raising working hours and 20% expanding their workforce. Investment has been largely in areas such as online digital marketing in order to take full advantage of consumers becoming more and more technologically-minded.
As evidenced by investment increases in the face of economic volatility, small businesses need not panic when faced with uncertainty around them. The savviest owners can look at any given situation and investigate the best ways to leverage them for their own benefits.
Engaging with business development experts like those at McKinley Plowman can also be a helpful outlet to reach the potential of your business – give us a call today on 9301 2200 or enquire via our website at www.mckinleyplowman.com.au.
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