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Mid-Market business confidence at all-time high

Mid-Market business confidence at all-time high.

The top strategies for mid-market businesses over the next 12 months are increasing customer loyalty and reducing operating costs, according to new research from The Sage Group Plc.

As confidence for mid-market companies reaches new highs, businesses are planning for growth by also focusing on their product and services portfolios and marketing.

The research found that 71% of South Africa businesses anticipate a growth in turnover over the next 12 months. More than half (60%) also said that they would increase the number of people employed by their company over the next 12 months.

The annual Sage Business Index surveys more than 2,000 mid-market businesses in 18 countries around the world.

The survey found that on all confidence indicators, mid-market businesses were upbeat about their prospects. Mid-market businesses were most confident about their own prospects, which scored a global average of 68.90 out of 100, an increase of 3.08 points on last year. The prospects for their country's economy scored a global average of 55.23, an increase of 2.04 points on last year. While the prospects for the global economy scored a global average of 55.86 an increase of 3.45 points on last year.

Mid-market businesses that were already exporting said they were optimistic about the year ahead. 65% of South African export companies in the mid-market expect export turnover to increase over the next year while the survey found that 35% SA mid-market businesses saw their levels of exports grow in the last year. But logistics costs (30%) and competition (32%) are the two main barriers to export expansion, according to the survey. To help them grow exports, mid-market businesses called for legislation changes by the government (33%) and for financial incentives (31%).

Jeremy Waterman, Managing Director for Sage ERP Africa, said: "The survey brought out interesting anomalies in the South African market – businesses in SA have the least confidence of any of the countries surveyed in the growth of their own economy and yet they are second only to the USA in confidence in the growth of their own companies, and rank third highest in being likely to increase the number of people employed, behind only the USA and Malaysia. Our survey also showed that mid-market companies see themselves as more risk-taking – and I think that taking calculated risks in a time of confidence will be a key for the next year. It is notable how optimistic exporting mid-market companies are."

"Confidence is rising and now is the time for mid-market businesses to think about strategies for growth. Thinking about serving customers better in 2015 is a great way to start. At Sage, we believe that mid-market companies are the unsung heroes of our economy. They are a fertile breeding ground of innovation and growth, yet are often overlooked by policy-makers. We are focused on supporting this sector of business in their growth ambitions and we are looking forward to helping them further in 2015," he added.

SUMMARY OF GLOBAL STATISTICS:

Business Growth
* Two thirds of mid-market businesses anticipate turnover growth over the next 12 months
* The top strategy for business growth in the next 12 months was reducing operating costs (40%), followed by increasing customer loyalty (35%) and increasing product/services portfolio (34%). Other strategies included investing in infrastructure and technology (30%) and expanding into new markets or geographies (30%) and marketing (24%).
* More than half (55%) said that the number of people employed by their company will increase over the next 12 months

Exporting
* Nearly two-thirds of exporting mid-market businesses expect export turnover to increase over the next year
* On average, nearly a quarter of exporting businesses' turnover comes from outside their domestic market
* A third of mid-market businesses and half of exporting mid-market businesses have seen their levels of exports grow in the last year
* Logistical costs and the level of competition are the two most common barriers to growing exports
* Two fifths of mid-market businesses do business in 3 or more countries (not including their own)

Governmental support
* One in five mid-market businesses believe that one of the biggest challenges to growth is government bureaucracy and legislation (21%)
* To help them grow exports, mid-market businesses called for financial incentives (27%) and legislation changes by the government (27%)
* Only a quarter of mid-market businesses think they receive the support they need from government to enable them to grow exports

Risk
* 6 out of 10 mid-market businesses describe themselves as more risk seeking than risk averse
* America, Malaysia, Poland and Brazil see the biggest mid-market risk seekers

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