Sustainability drives small business success, says survey
American Express and Oxford Economics have shared the results of their Global 2018 SME Pulse Report, which surveyed 3000 senior executives across 12 countries and 16 industries to explore the current outlook of the world’s small and medium-sized enterprises (SMEs). Interestingly, the report shows that there is growing demand from Australian consumers for sustainable and ethical business practices — and businesses are happy to comply.
According to the survey, around three-quarters (73%) of shoppers actively seek out businesses that offer sustainable products and services. Many SMEs are quite willing to capitalise on this market opportunity, with 86% considering sustainable and ethical business practices to be a key driver of growth and profitability. Indeed, it is believed that this customer demand will only intensify, with 76% of SMEs believing there is a growing market opportunity for providing ethical, transparent and locally sourced products.
“With Australian shoppers increasingly basing spending decisions on how ethical they perceive a business to be, and the impact that business has on the environment and society in general, sustainable business practices are no longer a nice to have — they’re essential for any size of business competing today,” said Martin Seward, Vice President of American Express Global Commercial Services.
“Our survey revealed that around two-thirds of SMEs (68%) are concerned about intensifying competition from larger companies, so many are looking for ways to differentiate themselves and find a competitive edge.”
One business that has witnessed the success of the sustainable approach is love.fish, a restaurant located in the heart of Sydney’s Darling Harbour. According to the restaurant’s owner, Michelle Grand-Milkovic, “Maintaining integrity has created a loyal customer base for us, which is key to success in this fickle industry.
“From the outset, our philosophy has been simple — to serve great food and support a more sustainable future,” said Grand-Milkovic. “We offer the best possible seafood from ethical and sustainable sources and strive to lighten our footprint through green initiatives such as our recent move to Barangaroo’s 6 Star Green Star-rated precinct.
“It’s important to be different and to understand that being socially and environmentally sustainable creates value in your business.”
But while the ability to respond rapidly to changing customer preferences is recognised as a key growth strategy in the survey, in practice this remains a challenge for many SMEs. Less than half surveyed (46%) believe they are able to quickly respond to changing shopper demands and only half (52%) feel they are effective at innovating their product or service offering.
For this reason, Australian SMEs say that fostering an innovative culture and employing talented innovators will be the most important factors when it comes to improving their business. Local businesses are thus seeking to intensify innovation efforts through increased staff engagement and development, including encouraging all staff to contribute to ideas, allocating time for idea generation and encouraging an innovative culture.
To download the full report, visit the Oxford Economics website.
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