An independent survey from across the globe with Insights from SMEs around the world...
This year’s research surveyed 2,300 small and medium-sized businesses across 13 countries: Canada, USA, Ireland, UK, Netherlands, Belgium, France, Germany, Poland, Czech Republic, Slovakia, Hong Kong and Singapore.
The report presents the opinions of owners and senior decision-makers of SMEs across the manufacturing, construction, wholesale, transport, and services sectors.
The Global Business Monitor reports business sentiment on topics including confidence, sales expectations, the economy, access to finance and business challenges, including the causes of cash flow problems.
Key findings
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Overall SME confidence in local markets has fallen from 54% in 2017 to 48% in 2019
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One in three SMEs struggle with cashflow
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Over two-fifths of SMEs are finding it difficult to collect payment from customers on time
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69% of SMEs in the US are confident that their local economy is currently performing well
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29% of UK SMEs are concerned that current economic performance in their country is poor
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SMEs in Ireland (53%) are the most upbeat about sales performance over the past year
SME business sentiment
The report found that while business confidence has taken a hit, down five points to 63.66 on the Confidence Index, business ambition remains robust in the face of a fickle global economy. This seeming paradox may be explained by the relatively higher significance of domestic trade compared with global trade.
Business challenges
SMEs around the world are struggling to access the cash they need to boost their growth, with one in three citing cash flow management as their greatest challenge. Late payment from slow paying customers was identified as one of the chief causes of cash flow problems by over two-fifths of SMEs.
Global trade
Domestic trade accounts for 86% of SMEs. When it comes to trading overseas, 28% of businesses are exporting, while 20% are importing. Singapore has the highest proportion of SMEs that import (41%), while Hong Kong has the highest proportion of SMEs that export (48%).
Access to finance for SMEs
When it comes to small business finance, one in three of the surveyed businesses said SME access to finance is excellent/good. Overall, around a third of SMEs are currently using external finance for their business and cash flow planning. Meanwhile, one in five SMEs have been rejected for external finance.
Payment practices
The research reveals that collecting money from customers remains a challenge for many SMEs wanting to improve cash flow. Thirty-one per cent of SMEs have experienced a bad debt in 2019, only a slight improvement on the 35% in 2017. Of those who have suffered a bad debt this year, 44% said it has affected their growth and profit margin.
Mark O’Rourke, Managing Director at Bibby Financial Services Ireland, said: “The strong performance of the Irish economy to date has meant that Irish SMEs continue to be largely optimistic about trading in post-Brexit domestic and international markets when compared to their international competitors.
“However there is a risk that underinvestment in preparation for Brexit will have a damaging effect on the sector and for Irish businesses, with few SMEs having the resources to put specific contingency plans in place. Our research also indicates that more SMEs are being rejected for external finance by traditional lenders.
“It’s therefore more important than ever that SMEs look beyond the major banks to consider a wider range of financing options, which are typically better suited to the needs of smaller businesses.”
Download the Irish report to discover where SMEs see their best opportunities and challenges for the coming year. Or download the international edition for insights into how Irish businesses compare with their global counterparts.
17/10/2019