Talk of a looming recession is being shrugged off by SME operators, according to the latest Business Monitor from accounting software provider MYOB.
The bi-annual survey of more than 1000 SME operators found that 26% expect the economy to improve over the next year, while a further 33% expect it to remain the same. The biggest optimists were Queensland operators, with 34% expecting an improvement, and operators whose businesses had grown revenue in 2016 (40%).
MYOB CEO Tim Reed said business conditions remained steady, with an uplift in operators stating revenue had increased up to 27% (from 21% in the July Business Monitor).
“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,” he said.
“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.”
The latest Business Monitor also looked at expected revenue in the short-term. The retail and hospitality sector is already feeling the Christmas cheer, with 46% expecting an increased pipeline for revenue in the next three months.
The SMEs most looking forward to increased holiday season revenue are those hailing from NSW (48%) and South Australia (38%) while West Australian SMEs were gloomiest, with just 22% expecting a revenue boost.
Reed noted 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%)
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.
SMEs were looking to higher value transactions with the top focus area being on prices and margins on products/services offered (30%). They are 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%).