Australian SMEs main growth opportunities: new customers and cost reductions
As in 2013, SMEs in most countries identified new customer segments and cost/expense reduction as the biggest opportunities at the present time. However, the survey presented a mixed picture, with Australia’s APAC neighbours – Hong Kong, Malaysia, Taiwan – citing diversification of product range or services as their top ranking opportunity for growth.
Diversification of product range or services is certainly becoming a more significant opportunity for Australian SMEs. Three times as many SMEs cited it as a growth opportunity (22%) in this year’s Zurich survey than in 2013 (7%).
‘The picture that emerges for Australian SMEs has ramifications for insurance because of the particular risk exposures implied by a business pursuing any of these opportunities,’ says James Makin, Head of Commercial Portfolio Management.
‘If a business plans to move into new areas in which it is not expert, such as seeking out new customer groups or providing new products or services, it should ensure that it has adequate insurance in areas such as public and product liability.
‘A business wanting to reduce costs may be trying to do what it used to do but with less staff and less resources. In such an environment, where corners are being cut, accidents and mistakes are more likely to happen. Again, adequate insurance becomes critical to protecting the business,’ says Makin.
While new customer segments ranked as the equal first opportunity for Australian SMEs in 2014 with 31%, the score showed a significant decline from last year’s survey when nearly half of all SMEs surveyed (45%) were citing it as their number one opportunity for growth. Also showing a significant decline from the 2013 figures is the perceived opportunity for growth into foreign markets, down from 24% to only 10%.
Zurich’s second annual SME survey was carried out by research company GfK in mid 2014. The leaders of 3,800 small and medium sized enterprises (0 to 250 full-time employees) around the world were asked to identify up to three actions they had taken over the previous 12 months. A representative sample of 200 CEO/owners, general managers, CFO/treasurers, COO/head of operations from each of the following 19 countries were included: Argentina, Australia, Austria, Brazil, Germany, Hong Kong, Ireland, Italy, Malaysia, Mexico, Morocco, Portugal, South Africa, Spain, Switzerland, Taiwan, Turkey, UAE and the UK. Zurich and the GfK continue to monitor SMEs to understand how they are managing the challenges they face and expect to publish further reports in the near future.
For further information contact:
Head of Marketing, Communications & Customer, General Insurance
Zurich Financial Services Australia Limited
Level 3, 5 Blue Street, North Sydney, NSW 2060
Phone: +61 (02) 9995 1368
Zurich Insurance Group (Zurich) is a leading multi-line insurer that serves its customers in global and local markets. With about 55,000 employees, it provides a wide range of general insurance and life insurance products and services. Zurich’s customers include individuals, small businesses, and mid-sized and large companies, including multinational corporations, in more than 170 countries. The Group is headquartered in Zurich, Switzerland, where it was founded in 1872. The holding company, Zurich Insurance Group Ltd (ZURN), is listed on the SIX Swiss Exchange and has a level I American Depositary Receipt (ZURVY) program, which is traded over-the-counter on OTCQX. Further information about Zurich is available at www.zurich.com.