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Start-up confidence down despite rise in revenue

The Australian start-up sector is experience a rise in revenue, yet the outlook for revenue growth is significantly lower than the same period last year.

63 per cent of start-ups reported an increase or steadfast level of revenue in the 12 months to August 2014, according to the latest MYOB Business Monitor.

23 per cent recorded an increase in revenue and 40 per cent reported steady revenue, while 27 per cent of start-ups reported a decline in income.

The figures point to an improvement in overall trading performance compared to the results reported in August 2013, which saw 24 per cent of start-ups report an increase in revenue, 29 per cent report steady revenue and 34 per cent report a decline.

Figures recording confidence in revenue growth were considerably lower, with only 26 per cent of start-ups reporting expectations of a rise in revenue in the 12 months to August 2015. This figure is significantly lower than last year, which saw 64 per cent of start-ups expecting a rise in revenue.

“It’s discouraging to see a ‘grey cloud’ hovering over this dynamic, eager group’s confidence levels in the year ahead,” said MYOB CEO, Tim Reed.

“We can only hope that we see their confidence bounce back as start-ups embrace the start of a New Year. It’s critical for government and industry to inject practical, strategic policy to help lift this aspiring group in their quest to foster innovation and to keep the flame of entrepreneurialism burning.”

The MYOB report found that fuel prices were considered to the biggest “pain point” for start-ups, with 36 per cent reporting it as the main cause of pressure. Cashflow challenges followed (33 per cent), as did attracting new customers (33 per cent), price margins and profitability (24 per cent), and competitive activity (21 per cent).

“It is my hope that the recent announcement by the government to remove the upfront tax on stock options is supported by all parties and passes the parliament quickly; these figures show that start-ups need this sort of flexibility now more than ever,” said Reed.

Guillermo Troncoso

Guillermo Troncoso

Guillermo is the Editor of Dynamic Business and Manager of film &amp; television entertainment site ScreenRealm.com. Follow him on <a href="https://twitter.com/gtponders">Twitter</a>.

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