Hunting for growth

Today entrepreneurs who focus on B2B sales got a reminder that their customers remain extremely cautious.

The latest business investment figures from the ABS show private sector capital expenditure fell 4% during the June quarter – a pretty poor result, given economists were tipping growth of 4%.

Happily, CommSec economist Craig James says the drop looks more like a blip than a serious trend to him, and he points to capital expenditure projections for 2010-11, which suggest business investment will jump by about 10% next year.

In other words, the recovery that we were hoping for in 2010 appears likely to have been pushed back to 2011 – but it is coming, and smart entrepreneurs need to be ready.

You can already see some of our fastest growing businesses positioning themselves with acquisitions that have a long-term focus.

Yesterday, classified giant Carsales.com picked up OZtion in a $1.1 million deal that will expand the size of their general community and diversify their product range a touch further. It looks like Carsales may have got a bargain too, given OZtion sold for $2 million two years ago.

In the always competitive pizza sector, Eagle Boys has continued its push into the Victorian and the regional market with the purchase of a four-store chain based in rural Victoria. The buy takes the Eagle Boys chain to 322 stores and should provide a springboard for more growth in a state that the company has been traditionally weaker in.

And yesterday we looked at education provider RedHill Education, which is planning a $27 million float that will help it fund the acquisition of two more education institutions. As chief executive Paul Tobin said, the sector is extremely fragmented, but good businesses are hard to find – picking winners during a period when conditions are tough makes sense.

The best entrepreneurs always say timing is everything in business and while cautious optimism has been the order of the day for the last 12 months, a stronger recovery is coming. Will you be ready?