• BDO Growth Index 2021

    An analysis of mid-sized businesses in Australia.

BDO Growth Index 2021

BDO Growth Index 2021

We are delighted to present the 2021 edition of the BDO Growth Index. The report delves into identifying some of the fastest growing mid-sized businesses across Australia and discusses key findings driving their growth.

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BDO Growth Index 2021

BDO and Commonwealth Bank are delighted to present the BDO Growth Index 2021

A message from Grant Saxon, Managing Partner, BDO in Sydney and Mark Couter, Executive General Manager, Commercial Banking, Commonwealth Bank.

The BDO Growth Index 2021 is the third report in the series, aiming to define, analyse and predict mid-sized business drivers, opportunities and challenges.

BDO foreword  ►

​For most of us in business, 2020 was the most challenging year we have experienced in our working lives. Apart from the financial and emotional trauma of market changes, forced cost savings and managing our workforce, we had to deal with a level of uncertainty that we have never seen before; and this gave new meaning to the term 'contingency planning' - as businesses developed multiple scenarios for outcomes that were impossible to predict. As advisers, we have also had to adapt - learning to trust our knowledge, instincts and ideas to assist our clients in every way possible to navigate the storm.

At BDO, we have built our business on servicing the needs of mid-sized businesses and during the pandemic, we have seen successful clients in this sector adapt to the challenges by sticking to their core business or in many cases, grasping the opportunity to pivot. For those who have been able to survive or prosper, these circumstances have led to necessary transformation, with many businesses pushing to make changes they had been considering for some time, but haven’t had the commercial rationale or urgency to do it.

As we present this report, we are at last coming into a period that is providing some clarity for business. Whilst the pandemic continues to play out across the world, mid-sized businesses are better equipped to gear up for the next phase of innovation - which as history shows, is often a result of a prolonged downturn.

With a return to economic growth being a priority, the middle-market represents an untapped opportunity to assist Australia’s recovery beyond COVID-19. The events of the past year have shown that despite the recession, the slice of the Australian economy which continues to tick the box for economic success, is the quiet-achieving middle market.

Our research has found that typically mid-sized businesses are more established than smaller businesses and are in a better position to adapt to the forces being placed upon them. The value of what is largely privately owned businesses is critical to Australia’s recovery as we come out of the recession.

The BDO Growth Index finds that mid-sized businesses continue to punch above their weight in terms of generating growth. They are unique in that they are large enough to invest and make a meaningful impact on the economy, yet small enough to be entrepreneurial and nimble, often with a clear market niche.

Whilst there is always plenty of innovation occurring in the start-up community, innovation tends to be commercialised in the mid-market. The ability to adapt and quickly respond to changing markets are key characteristics of successful businesses in the middle market.

We hope you enjoy the BDO Growth Index 2021.

Grant Saxon
Managing Partner, BDO in Sydney

CommBank foreword  ►

Mid-sized businesses are huge contributors to our nation’s prosperity and growth, and the source of employment for so many Australians. CommBank continues to back many businesses within the mid-market, not only through its commercial solutions but through tracking the operating and competitive dynamics of many industries. Our particular areas of industry expertise include Professional Services, Construction, Manufacturing and Wholesale Trade, and Retail Trade.

Prior to the pandemic, Australia had been enjoying an unrivalled 29 years of uninterrupted economic growth. And while health and economic challenges remain, Australia is once again leading advanced economies on the path to recovery. During the pandemic many mid-sized businesses reviewed their business models and profit/cost drivers. As a result, they are emerging leaner, stronger and with a vastly improved digital offering. There is a sense of renewed vigour and optimism.

Businesses have faced tremendous change over the past three years. Technological advances have had a big impact. On the one hand technology has enabled businesses to be more efficient and productive, to develop new products and services, and to better understand and meet their customers’ need. Yet it has also brought considerable disruption, including the entry of new business models.

Mid-sized businesses have had to deal with a changing regulatory environment, as well as heightened expectations of businesses’ role in society. Customer needs and expectations continue to evolve. Whatever their last best-in-class experience was, they expect the same from all interactions with businesses, regardless of industry.

The pandemic has only accelerated many of these trends. The business landscape is as dynamic as ever, making resilience, adaptability, and the ability to innovate at pace essential qualities for mid-sized businesses wanting to grow.

This report covers a broad spectrum of industries. Nevertheless, as Australia’s largest bank, it is evident from conversations with our business customers that some common themes are at play as businesses think about where they should be channelling their resources to set themselves up for continued growth.

The skills that businesses will need in the workforce of the future is a recurring topic, as is the necessity of staying close to customers and using data analytics to better understand their needs. The pandemic was a timely reminder that supply chains must be strong and diversified, while geopolitical events such as Brexit and tensions with China present challenges but also opportunities to expand into new markets.

Businesses must understand their value proposition, how it differentiates them in the market, and ensure they remain relevant. Ongoing investment in people, technology and digital transformation is an imperative.

Conditions for investment are ideal. Interest rates are at record lows and likely to remain so for quite some time. At CommBank we have considerable appetite to back businesses with sound plans for growth. We see many opportunities for businesses that are prepared to be bold and invest for further growth now.

Mark Couter

Mark Couter

Executive General Manager, Commercial Banking
Commonwealth Bank

Commonwealth Bank of Australia