Sydney, Sept 11: A recent study by Money Transfer Comparison reveals that more than 50 per cent of Australian businesses are considering expanding their supplier and customer base overseas within the next year. Escalating operating costs have led to the permanent closure of 85,686 businesses between March and June 2023, intensifying competition in Australia’s challenging business environment.
The research, based on a survey of 202 independent business owners and decision-makers across the SME spectrum, indicates that the rising cost of doing business has forced one-third of business owners to cut spending on non-essential items.
In response, 51 per cent of businesses are contemplating seeking resources, customers, or clients abroad in the next 12 months.
Of these respondents, 33 per cent expressed interest in offshore suppliers, while 18 per cent are looking to acquire international customers or clients.
Russell Gous, a spokesperson for Money Transfer Comparison, highlights the advantages of outsourcing, including cost savings on labor and suppliers, entry into less competitive markets, and expanding customer bases.
Breaking down the statistics by state, West Australian businesses exhibit the highest inclination (68 per cent) to explore overseas resources and customers, while Queensland businesses are the least likely (60 per cent) to shift from local to international suppliers and customers.
Analyzing business sizes within the SME spectrum, the study found that 60 per cent of medium-sized businesses are considering offshore options, compared to only 25 per cent of micro-businesses.
The tech industry emerges as the most sought-after sector for outsourcing among SMEs, with software (38 per cent) and IT hardware (31 per cent) topping the list of potential products and services to be sourced more affordably overseas.
Additionally, businesses are open to outsourcing manufacturing (30 per cent), labor (29 per cent), shipping and logistics (27 per cent), and research (15 per cent).
Russell Gous concludes that the data highlights how Australian SMEs are adapting to the changing financial climate by proactively seeking solutions to maintain competitiveness and financial security. Outsourcing is viewed as a viable short or long-term strategy to address increasing costs and skill shortages, with the tech industry being a particularly attractive option.
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