Bank cautions firms as confidence soars

Photo / Michael Craig

The number of privately-owned businesses expecting to grow in the next year has surged, but an expert has warned high levels of growth will not be easy.

Results from ANZ's privately owned business barometer found 87 per cent are planning for growth in the next year - up from 57 per cent last year.

ANZ managing director commercial Graham Turley said the strong jump in confidence had come as a surprise.

"I thought it might have been in the seventies. It's quite positive most people think this year is going to be better."

Turley said it was quite realistic for businesses to expect some growth after a year where many had gone backwards.

"We are at a low base so the growth is off a low base."

But people were fooling themselves if they thought it was going to "pop back" to where it was before the global financial crisis hit.

"People are just going to have to accept that growth rates will be low and people will have to work hard to get that," he said.

"Those who don't put the effort in will find it tough."

Turley said businesses were having to cope with a "new normal" after the recession.

The barometer also found a shift towards more businesses wanting to export and sell their goods and services in Asia.

While 49 per cent of businesses exported now, that was expected to rise to 53 per cent in three years and sales to Asia were expected to grow from 19 per cent to 25 per cent.

"People are thinking much more broadly about their markets," he said.

"A lot of exporters have been shocked by their reliance on Europe and the UK. New Zealand businesses are now seriously looking at Asia."

Turley said a lot of companies still did not yet know how to attract those markets. "But they are now putting in the effort to understand them."

Turley said the financial crisis had also seen a lot more businesses seek external advice.

The barometer found those seeking advice had risen from 75 per cent last year to 92 per cent.

"What we have seen is a lot of businesses have found it difficult to manage on their own, when they started talking to others, and found they were not the only ones in the same boat, they got a lot out of it."

Turley believed it was important for businesses to continue to seek advice but said it was unclear whether they would.

"There is always a danger for people to fall back to past habits. Whether it will continue will depend on the value that advice brings."

The barometer surveyed 804 businesses with an annual turnover of between $2 million and $150 million.

BACK TO BASICS

Tips for businesses:

* Stick to the business basics - focus on costs, tighter management of debtors, inventory and supply chains and closer management of customer relationships.
* Seek external advice.
* Think broadly about how to fund growth.
* Lay the groundwork for exporting first.