Less confident on 2015
Māori-operated small businesses have outperformed the SME average over the last year, although operators are less confident of growth in 2015 according to a nationwide survey.
The latest MYOB Business Monitor survey of over 1,000 business owners and operators, conducted by Colmar Brunton, saw 43% of Māori-operated reporting improved growth in the year to August 2014 – above the average SME growth level of 39%. Around 5% of the businesses included in the research were owned or operated by Māori.
Despite doing well in 2014, Māori SME operators are more cautious in their outlook for 2015. Just 27% believe economic conditions will improve in the next 12 months (compared to an average of 35%). For their own businesses, under a third (30%) of Māori operators are forecasting increased revenue in the 12 months to August 2015 (38% average), 16% expect revenue to decrease and 36% say revenue will remain stable. Almost a fifth (19%) are uncertain what 2015 will bring.
Māori business operators are expecting to finish the year strongly, however, with 37% saying they have more work on in the next three months (36% average), while just 14% have less.
MYOB NZ Sales Manager Business Division Scott Gardiner says it is good to see Māori business operators leading the way in terms of performance. “Since March, when only 30% of operators reported an annual revenue increase and 34% saw revenue decline, we’ve seen a major turn-around in the earnings of Māori owned and operated business,” says Scott Gardiner.
“This is very encouraging and a sign that the growth of the last year is becoming more evenly distributed across the economy,” he said.
Pressures creeping up
Mr Gardiner says operators need to be aware of key pressures building, particularly as revenue levels come off.
“Although we are seeing Māori business operators being wary of increasing pressures – especially those based around external costs like fuel and interest rates – again, we are not seeing quite as much stress as we were in March,” he said.
“While consolidating the good work done this year though, it will be important for operators to keep a close watch on costs, and adjust their business model accordingly.”
Top three pressures for Māori business operators in 2014:
- Fuel prices – 28% (26% SMEs overall)
- Interest rates – 24% (21% SMEs overall)
- Prices margins / profitability – 18% (17% SMEs overall)
More jobs and higher wages
Despite being cautious as they head into 2015, Māori business owners intend to take on staff at twice the rate of the SME average, with 20% of those surveyed saying they plan to increase the number of full time employees they have this year.
Rates of pay will also increase for many working for Māori employers, with 26% planning to pay their staff more in 2015, compared to 20% of all SMEs. Over a quarter (26%) intend to keep pace with costs by increasing prices.
Fewer Māori business operators online
According to the survey, well over half (57%) of Māori business owners currently have no online presence, compared to the SME average of 47%. 18% have a website only, 10% have a business social media site only, and 12% have both. Just under a third (32%) actively use social media to promote their business.
“This is probably the only disappointing statistic of the current survey,” says Scott Gardiner. “The internet provides a real opportunity to engage more with customers, reach more people – both locally and internationally – and sell more. We know from the wider survey that online businesses earn more revenue, so it would be great to see more Māori business owners becoming part of the internet economy and telling their unique story online.”
Access to the internet and price of data are unlikely to be a factor in Māori participation online, with operators more likely to be satisfied with both access (speed and reliability) and cost of their plan.
“What is great news though is, even though they have clearly been working hard to improve revenue performance this year, Māori business operators enjoy a better work / life balance than most,” says Scott Gardiner.
“At 63%, this is one of the highest levels of satisfaction with work / life balance in the survey. To get the balance right, while improving revenue growth, is no mean feat – Māori business operators should be congratulated for everything they’ve achieved this year.”
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About the MYOB Business Monitor
The MYOB Business Monitor is a national survey of 1,000+ New Zealand small and medium business owners and managers, from sole traders to mid-sized companies, representing the major industry sectors. It has run since 2009, commissioned to independent market research firm Colmar Brunton. This most recent survey ran in July/August 2014. The Monitor researches business performance and attitudes in areas such as profitability, cash flow, pipeline, technology usage and the government. The weighting of respondents by both geographical location and sector is based on overall market proportions as established by Statistics New Zealand and is drawn from an independent survey group, which includes both MYOB clients and non-clients.