16th February, 2024
Fifty-eight per cent of small and medium sized enterprises (SMEs) say the cost of doing business is more of an issue than it was 12 months ago, according to the latest MYOB Business Monitor released today.
To manage the rising cost of doing business, SMEs have taken action on a number of fronts including incorporating increases into the price of their products and services (29%), making less or no profit (28%), and the business owner either reducing or not taking an income (21%).
The survey of 1000+ Australian SME owners and operators, released twice a year, reveals for more than a third (34%) of SMEs, revenue is down compared to a year ago, with 38% citing challenging economic conditions as the core reason.
The research also shows rising business costs are causing significant pressure for SMEs, notably the price of fuel (33%), the cost of utilities (32%), and rising interest rates (27%).
Despite the challenging climate, newer businesses are slightly more optimistic about the future.
More than a third (36%) of startup respondents (businesses in operation for less than two years) anticipate economic improvement over the coming year, compared to only 19% of established businesses in operation for 10 years or more.
Paul Robson, CEO of MYOB, says this is undoubtedly a difficult time for businesses, and while SMEs are known to be resilient, many will need to overcome hurdles this year to ensure the long-term prosperity of the sector overall.
“We’ve seen no shortage of challenges in recent years, and the impacts of higher operating costs, combined with consumer belt-tightening, is reflected in the pricing, profit and income decisions of small business owners, as they try to achieve more with less,” he says.
“SMEs are especially susceptible to fluctuating conditions, but they’re also incredibly resourceful and can move quickly if required.
“Despite rising costs being felt across the board, the research indicates businesses born in the last two years have emerged more optimistic and strong, and are feeling more positive about the year ahead.”
The MYOB Business Monitor also shows that in the last 12 months 43% of startups increased the number of online tools they use, boosting their productivity and chance of success. This is compared to 21% of SMEs surveyed overall.
“Building and growing a business against the backdrop of challenging market conditions means businesses are looking to supercharge their productivity right from the start,” Paul says.
“Digital capabilities enhance productivity, helping SMEs save time and money, improve accuracy in their business, thereby increasing their likelihood of success.
“Small and medium sized enterprises are responsible for employing eight million people and contributing half of the national GDP. Identifying ways to support all SMEs — from startups through to established businesses — is absolutely critical in building a thriving local business community and a strong national economy.”
The MYOB Business Monitor researches business performance and attitudes regarding areas such as profitability, cash flow, pipeline work, technology usage and the government.
This report presents the summary findings for key indicators from the MYOB Business Monitor comprising a national sample of 1037 business owners, managers and directors (operators), conducted from 29th October to 7th December, 2023.
The businesses participating in the online survey were both non-employing and employing businesses. All data has been weighted by industry type, location and number of employees, which are in line with the Australian Bureau of Statistics (ABS — Counts of Australian businesses, including entries & exits – 8165.0).