Is your finger on the Pulse?

Can growing confidence grow value?

Private businesses are continuing to set ambitious growth targets, according to the Summer 2011/12 Private Business Barometer Pulse.

The PwC Private Business Barometer surveying 1000 businesses is prepared annually. Six months later a pulse of the market is taken to highlight trends and movements in business sentiment and performance.

The Private Business Barometer provides the market with detailed insights into the private business community and is a source of reference for private business owners, senior executives, analysts, media and government policy makers.

The Pulse results indicate that once again, private businesses have been bullish in setting high sales and profit targets. Many of the businesses surveyed have achieved them, with more than half of businesses meeting or exceeding their revenue targets.

Despite this, businesses find themselves in an uncertain space. According to David Wills, PwC Private Clients Leader says the general lack of confidence is driven by uncertainty around external factors that are out of businesses' control, including the domestic and global economy and political stability. "For business owners it's about controlling what you can and being prepared for unforseen events - economic or otherwise," David said.

Although 43 per cent of private businesses reported undershooting their revenue targets, those targets were set high: 13 per cent sales increase and 17 per cent profits. Businesses have continued to set themselves ambitious targets - increasing them again - but even if they undershoot these targets and achieve growth of seven or eight per cent, this can still be considered strong growth.

A considerable number of private businesses surveyed are sitting tight and waiting for economic conditions to change before making any major business decisions - including capital investments. However, scenario planning is essential, so it is important to consider what can be done now to prepare businesses for when the market is ready to turn.

Tom Strachan, owner of Queensland-based AWX, a company specialising in solving short and long term staffing requirements, believes that businesses cannot sit back and wait until the market turns, as there are always opportunities. A business needs to reposition or restructure resources to take advantage of those opportunities presented, no matter the market conditions.

"We have been preparing for a fairly flat two speed economy. However, with our diversification we are looking to take advantage of that. Our confidence to perform is high and our strategy is being reinforced as we experience significant growth during these nasty winds," Tom said.

The Pulse results indicate businesses are recognising that they can't rely on organic growth as a means to create growth, and are looking at expanding into new product markets.

Based on the current market conditions, now is the time to invest in your business - whether it be new product markets, acquisitions, investment in machinery, people and training.

"We're aggressively creating new product lines, but at the same time being incredibly careful of our brand distinction and preventing brand dilution," said Brian Briscoe, owner of Briscoe Search & Consulting, a recruitment specialist in Western Australia.

While some private businesses are creating new product lines, others are looking at strategic acquisitions as a way of expanding their product base. "Sometimes the easiest way of getting into a new product or market is by making a strategic acquisition in that key area," said Michael Da Gama Pinto, Senior Associate at Victoria's Harbert Australia Private Equity.

There is an opportunity now to do some of the things that other businesses aren't doing. Businesses owners should take confidence in their numbers and take advantage of the opportunities out there.