Should I start a new business in Australia in 2018?

The start of the new year is a time when many people commit to making big changes in their life. Improving fitness, getting a new job and reorganising finances are popular New Year's resolutions – but what about starting your own small business?

Let's look at the latest SME trends to see why 2018 might be a good time to achieve your entrepreneurial dreams.

1. Australian business confidence high for SMES

There are positive signs for Australian business confidence in 2018, with SMEs showing increased optimism in the economy and their ability to access finance.

The latest Sensis Business Index, which tracked SME sentiments over the three months to September, revealed that 61 per cent of organisations are currently confident – the equal highest proportion since 2010.

But what about business confidence for the next 12 months? Well, the index jumped seven points to +16, which was the best result in nearly four years, suggesting SMEs are looking forward to the opportunities this year will bring.

"With the ability to access finance, an SME owner can think about capital expenditure to grow their business, which in turn can drive more sales and flow on to requiring more employees, and so on," said Sensis Chief Executive Officer John Allan.

2. Favourable business conditions

Several surveys over the last few months have pointed to positive business conditions in 2018.

The National Australia Bank (NAB) Monthly Business Index for October showed that enterprise conditions were the best on record. The survey returned a +21 score, up seven points from the previous month.

In November, business conditions fell to +12, but they remain significantly above the long-term average of +5. The commercial landscape for SMEs is also favourable, with the NAB Quarterly Index for smaller organisations reaching +9 in the three months to September.

These scores put SMEs on a positive footing for 2018, and indicate new start-ups could benefit from an attractive economic environment if they launch this year.

3. Late payments look likely to decrease in 2018

Unsettled invoices and the cash flow problems they can cause are a significant problem for start-ups. That's why every business development plan should include effective cash-management and forecasting.

However, business owners may be given a helping hand in 2018, with late payments showing a steady decline in the country across a number of studies in recent months.

Illion, formerly Dun & Bradstreet, found the average late payment time dropped to 12.6 days in the September quarter. This was down from 13.9 days in the corresponding quarter in 2016. Meanwhile, Xero research showed businesses were paid within 35 days on average in October 2017, whereas they had to wait nearly 39 days in January.

Still unsure whether you should start a new business in Australia in 2018? Contact small business accounting specialists at WMC Accounting to learn more about our comprehensive suit of tax and business advisory services.