How Much Growth Potential Do Australian Businesses Have?

by Sufyan 10th of September, 2015

If you're assessing businesses for sale in Australia, chances are you've done a lot of background research and have perhaps sought external advice. While the transaction itself is one thing, is it possible to garner an idea of returns in the long term?

Well, while there are many factors involved in supporting business growth, it appears as though the economy in Australia is one that will enable companies to expand.

"The transition in growth is not perfectly smooth, but our economy has, in my judgement, coped remarkably well through a lengthy period of very large shocks in a difficult world," explained Reserve Bank of Australia (RBA) Governor Glenn Stevens, in a speech assessing the country's economic and business conditions.

A question of tax?

While conditions for growth appear to be in a relatively stable place, the Business Council of Australia (BCA) is attempting to discuss ways in which Australian businesses can prosper going forward. Its solution is centred on altering some of the legislation surrounding taxation.

Perhaps most notable to existing and potential business owners is the call from the BCA to create a more competitive enterprise environment by cutting the company tax rate to around 25 per cent.

"Ultimately, the goal of tax reform has to be about growing the economy, because it is … a growing economy which supports greater investment, innovation and improved productivity," surmised BCA's Chief Executive Jennifer Westacott.

Unlocking potential

Statistics collated by the RBA suggested that the economy is growing at around 2 per cent annually. Naturally, many business owners, and those assessing a business for sale, will hope that the figure trends positively over the next few years.

While growth prospects tend be dictated by factors within each individual market segment and sector, the fact that there are steps being taken to ensure growth continues across Australia should be welcomed by existing and soon-to-be company heads alike.