SMEs not buying recession talk – MYOB Business Monitor
15 Dec 2016
* Almost two thirds expect economy to improve or stay the same
* Start-ups leading business confidence and revenue growth
* NSW leading pipeline growth, WA feeling the pinch
Small business operators, like the nation’s economic leaders, look to be brushing off talk of a looming recession, according to the latest MYOB Business Monitor.
The bi-annual national survey of over 1,000 small business owners has found that 26 per cent of SME operators expect the economy to improve over the next year, with a further 33 per cent expecting it to remain the same.
Queensland operators were the most optimistic, with 34 per cent expecting an improvement, and those that had grown revenue in 2016 also positive for the year ahead (40 per cent).
MYOB CEO Tim Reed said that business conditions remained steady, with an uplift in those stating revenue had increased up to 27 per cent (from 21 per cent in the July Business Monitor).
“Australia’s start up community is continuing to fuel growth for the Australian economy, with some 42 per cent of start-ups and 35 per cent of establishing businesses reporting revenue increases. Rural businesses also returned a strong showing with 37 per cent achieving revenue growth.
“We know that SMEs are very entrepreneurial - our recent MYOB SME Snapshot showed many are running two or more businesses and some even have plans for more. They continue to be the engine room for the Australian economy,” said Mr Reed.
“We’re now 12 months into the nation’s innovation agenda and we can see the results with high revenue growth coming from start-ups. In a challenging global environment, however, we need to ensure Australia remains an attractive place to do business and call on the government, opposition and cross-benches to support the proposed company tax reductions. Having one of the highest levels of company tax in the OECD just won’t cut it. We also need to ensure we keep removing roadblocks to business growth, so the push towards prompt payment protocols is also very welcome.”
Short term outlook looking up
The MYOB Business Monitor also looked at expected revenue in the short term. The retail and hospitality sector is already feeling the Christmas cheer, with 46 per cent expecting an increased pipeline for revenue in the next three months.
The SMEs most looking forward to increased holiday season revenue are New South Wales (48 per cent) and South Australia (38 per cent) while West Australian SMEs were gloomiest with just 22 per cent.
Mr Reed noted start-ups again featured among the groups with increased pipelines:
- Franchisees (61%) and franchisors (57%)
- Gen Y operators (56%)
- Start-ups (54%) and establishing businesses (47%)
- Importers (50%) and exporters (48%)
- Operators with a social media site (50%) or business website (47%)
Investment intentions focused around product and digital innovations
Gen Y operators, retail and hospitality, manufacturing and wholesale, start-ups and establishing businesses were more likely to increase investment in their businesses over the next 12 months.
SMEs were looking to higher value transactions with the top focus area being on prices and margins on products/services offered (30 per cent). They are also looking to broaden their offerings with the number or variety of products or services (28 per cent), working on customer retention (28 per cent) and investing more in selling online (26 per cent).
Baby Boomers, established businesses, construction and trades and transport, postal and warehousing businesses were much less likely to be investing.
“We’re seeing a real boost in all areas here with start-ups, young and ambitious Gen Ys and digitally minded businesses. Long may it continue.” Mr Reed said.
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MYOB Group Ltd (ASX: MYO) is a leading cloud based business management solutions provider. It makes business life easier for approximately 1.2 million businesses across Australia and New Zealand by simplifying accounting, payroll, tax, practice management, CRM, job costing, inventory and more. MYOB provides ongoing support via many client service channels including a network of over 40,000 accountants, bookkeepers and other consultants. It is committed to ongoing innovation, particularly in cloud computing solutions, and in 2015 was awarded the BRW award for the most innovative large company for 500+ employees and placed 2nd in BRW’s Most Innovative Companies Award list across all categories nationally. For more information, visit http://investors.myob.com.au/Investors or follow @MYOB on Twitter.
About the MYOB Business Monitor
After six years of conducting the MYOB Small Business Survey we've enhanced it to better reflect the profile of Australian businesses. We've now incorporated medium businesses, along with the sole traders and small businesses that were already part of the survey. We're pleased to present the new look MYOB Business Monitor.
The MYOB Business Monitor is a national survey of over 1000 Australia's business owners (and directors) conducted twice a year by Colmar Brunton.