Link to original document
Business conditions remain steady
In the February 2013 Business Monitor survey on which this report has been based, Australian business owners and managers (herein known as ‘operators’) reported similar levels of revenue performance over the previous 12 months as they did in the previous three surveys. While 39% reported a decrease in annual revenue, only 18% reported an increase. 40% said revenue has been steady and 3% were unsure. As seen in the table below, there were no marked differences in positive annual revenue results by geographical location in this research wave. By industry, the only significant difference was in the manufacturing and wholesale sector. More than half (52%) reported an annual revenue fall.
Economic sentiment on the rise
After a series of flat results in business operators’ expectations of economic improvement, this survey showed one quarter (25%) expected the Australian economy to improve within 12 months (up from 19% in the May 2012 survey).
In stark contrast to the SME revenue performance experienced over the prior 12 months, a higher proportion of operators also expected a revenue rise in next 12 months (30%), compared to 19% who expected a revenue fall. 42% expected steady revenue and the remainder were unsure.
As for sales/work in the pipeline for the February to April quarter, this result was steady with the previous survey. 30% of business operators said they had more in the pipeline in this three-month period compared to usual (29% in the previous survey).
Gen Y business operators were the most optimistic generation, with 37% expecting the domestic economy to improve within 12 months (compared to 19% of Baby Boomers, the least optimistic), and 44% expected their revenue to rise in the next 12 months (compared to 24% of Baby Boomers).
Gen Y business operators were also the most likely to state they had more sales/work in their three-month pipeline (54% compared to 25% of Baby Boomers and 17% of Traditionalists).
In the latest research wave, the area of business that operators were most likely to increase their focus on in 2013 was customer retention, with 38% planning to invest more here. Customer acquisition strategies were also high on the agenda, ranking second, with 35% planning to boost investment in this area. Coming in third was plans to increase the number or variety of products/services sold.
Compared to the previous survey, fewer operators intended to increase prices and margins on products or services sold (23% compared to 27% in the prior report), or increase the amount paid to employees (21% compared to 26% in the last wave). Sales of products offline (17% compared to 22% in the last wave) and the number of full time employees (10% compared to 16% in the last wave) were also less likely to see an increase.
Key differences were noted across a number of areas, including by age of the business operator and the size of the business. As seen in the table overleaf, younger business operators were more likely to increase investment in the next 12 months across a number of areas compared to their older counterparts, particularly in regard to online activity. Small businesses (5 – 19 employees) were also more expansionary compared to sole operators, who were much less likely to invest across the board.
Industry sector differences also showed. Business, professional and property services stood out in terms of being more expansionary, while construction and trades companies were much less expansionary. Differences by state/territory were minimal.
Similar business pressures expected
When respondents were asked what elements of the business environment they expected to cause an extreme amount or quite a lot of pressure on their business in the next 12 months, fuel prices again came out on top, at 38%. This has occupied the number one position in the previous four surveys.
The pressure of fuel prices was even higher amongst some segments, particularly:
• Transport, postal and warehousing (67%), agribusiness, forestry and fishing (56%), and construction and trades businesses (47%)
• Rural businesses (50%)
• Established businesses (46%)
• Queensland businesses (45%)
The pressure of fuel prices was followed by four issues of relatively equal importance:
• Attraction of new customers (32%)
• Profitability and price margins (30%)
• Competitive activity (29%), and
• Cash flow (29%)
Attracting new customers has become a greater pressure this wave (up from 28% in May 2012 to 32% in this wave), while the pressure of interest rates has continued to decline (down to 24% from a high of 34% in September 2011).
Profitability and price margins ranked third, at 30%.
Attracting new customers
Looking at categories of businesses, attracting new customers was a greater pressure for:
• Businesses who reported a revenue fall in the previous 12 months (47%)
• Importers (44%)
• Businesses with a website (41%)
• Retail and hospitality businesses (37%)
Price margins and profitability
Price margins and profitability was a greater pressure for:
• Businesses who reported a revenue fall in the previous 12 months (45%)
• Importers (44%)
Competitive activity was a greater pressure for:
• Importers (44%)
• Businesses with a website (37%)
• Businesses who reported a revenue fall in previous 12 months (37%)
Cash flow was a greater pressure for:
• Micro businesses (36%)
• Businesses who reported a revenue fall in the previous 12 months (41%)
Business impact of penalty rates varies
In a new question this survey, business operators were asked how employee penalty rates had affected
their business (shown in the table below).While two-thirds (67%) stated that penalty rates did not
affect their business, for those who did, the impact varied considerably.The business operators most
likely to report that penalty rates did affect their business (33% overall) included:
• Franchisors (72%) and franchisees (64%)
• Medium (67%) and small (54%) businesses
• Gen Y (52%) and Gen X (41%) business operators
• Importers (51%) and exporters (46%)
• Retail and hospitality businesses (44%)
• Establishing businesses (44%)
• Businesses using cloud computing (44%)
• Businesses with an advisor/consulting relationship with their accountant (44%)
• Businesses with a website (41%)
Small businesses unaware of instant asset write-off
Another new question this survey was about the use or intended use of the small business instant asset write-off in the 2012/2013 financial year.
As the chart opposite shows, almost one-third of businesses (31%) were unaware of the write-off, and only 14% had already used or planned to use it. 30% weren’t sure whether they would or would not take it up.
Small businesses (5 – 19 employees) were most aware of the write-off (80%) and only 18% had not used nor planned to use the write-off. Finance and insurance companies were also more aware of the write-off (86%), but 45% had not used nor planned to use it.
ONLINE ECONOMY & CLOUD COMPUTING data to follow in next blog post. Stay tuned.
About the study
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 1,005 business owners, managers and directors (operators), conducted from January 17th to February 4th 2013. 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, June 2007 – June 2009 – 8165.0).
This research report was prepared by Gundabluey Research and fieldwork was completed by Colmar Brunton (a Millward Brown Company) for Kristy Sheppard, Public Relations & Corporate Affairs Manager – Australia,
MYOB Australia Limited email@example.com | http://myob.com.au