Australia’s small business owners remain relatively optimistic about their businesses in the face of a slowdown in the economy and amid talk of a looming recession, according to a newsurvey that shows that many SMEs, led by startups, have increased revenues over the course of this year.
According to the latest MYOB bi-annual business monitor of 1,000 small business owners, 26% expect the economy to improve over the next year, with a further 33% expecting it to remain the same.
According to the survey, Queensland operators were the most optimistic, with 34% expecting an improvement, and those that had grown revenue in 2016 also positive for the year ahead (40%).
The accounting software company’s CEO Tim Reed says that business conditions remained steady, with an uplift in those SMEs stating revenue had increased up to 27% - from 21% in the July Business Monitor.
{loadposition peter}“Australia’s start up community is continuing to fuel growth for the Australian economy, with some 42% of start-ups and 35% of establishing businesses reporting revenue increases. Rural businesses also returned a strong showing with 37% achieving revenue growth,” Reed says.
“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.
“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.”
The MYOB Business Monitor also looked at expected revenue in the short term and, according to Reed, the retail and hospitality sector is “already feeling the Christmas cheer”, with 46% expecting an increased pipeline for revenue in the next three months.
And, MYOB says the SMEs most looking forward to increased holiday season revenue are New South Wales (48%) and South Australia (38%) while West Australian SMEs were gloomiest with just 22%.
Reed notes that 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%)
MYOB says investment intentions focused around product and digital innovations and 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.
The survey reveals that SMEs were looking to higher value transactions with the top focus area being on prices and margins on products/services offered (30%) – and also looking to broaden their offerings with the number or variety of products or services (28%), working on customer retention (28%) and investing more in selling online (26%).
But, the survey reveals that 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,” Reed concluded.