Earlier this year a comprehensive research study was carried out to identify the issues most affecting Australian businesses today. Known as the Sage SME Business Sentiment Index 2011, the study involved more than 600 owners and decision makers across all business sizes and industries. In particular it sought to identify current business confidence levels, attitudes to business and employment issues, investment priorities, major business challenges of the past 12 months and anticipated challenges for the year ahead. The results were then analysed by business size, industry, and myriad other categories. What no one expected was that a division based on the participants’ gender would deliver clear-cut differences in business practices and expectations.
Women business owners, it emerged, are more cautious and at the same time more pragmatic than men. They are more likely to spend time planning and to invest in business growth even though they remain more doubtful about the prospects for Australia’s economic recovery in 2011. They are less likely to report having experienced cash flow issues in recent years but they are more likely to agree that their costs have increased since the GFC and that revenues have failed to grow by the same margin.
Women show less confidence than men about business performance but they are also more cautious when it comes to introducing tactics that may ameliorate financial woes such as:
- reducing prices for customers,
- taking on more debt to grow the business
- freezing or limiting all staff pay rises
By comparison, more male business owners believe that their business is performing better now compared to this time last year and they are more likely to believe that the economy is recovering compared to 2010. Where male business owners typically concentrate more on the challenges of revenue growth and customer acquisition, women are more keenly focused on the challenges of rising costs and recruiting employees.
It’s not just boys and their toys
Attitudes to technology also divided the genders but not in the way many might expect. The Index found that women business owners are quick to identify business benefits in technology and that they are more likely than their male counterparts to:
- have plans to increase their use of online software and services in the next 12 months
- have (and maintain) a website that people can order and buy from
- perceive their online presence as critical to the future success of their business
It is probable that this enthusiasm for an online presence is a direct result of women’s greater relative presence in areas such as retail and service related industries. Both of these were among the earliest industries to embrace the online commercial environment.
When it comes the IT infrastructure that underpins online technologies, men display a degree of comfort, noting less concern about issues such as maintenance, security, compliance and overall costs. However they are more than twice as likely to be concerned about backup and recovery technologies than their female peers.
Applying the findings
Irrespective of gender, the Index shows that almost half of all businesses believe rising costs will continue to be the big challenge for the next 12 months. Finance obviously remains an issue for many, with maintaining or growing revenue, cash flow and access to capital all being nominated as key concerns. There are also some new challenges on the horizon. One fifth of business owners point to increased competition. Many companies are starting to look outwards for ways of improving business, with almost four in ten citing the need to gain new customers and access new markets.
As business performance starts to pick up the issue of staff shortages has re-emerged. Six in ten Australian businesses state that they are struggling to find sufficient numbers of skilled staff to meet their requirements. Exacerbating the problem – and contributing to concern for cost management – is the fact that three in ten businesses report existing staff are beginning to make demands for wage increases and almost half say they have increased pay levels during the past 12 months.
The concerns for the year ahead are common across all businesses but it’s probable that the strategies adopted to deal with them will differ depending on whether a company is owned by a woman or a man. Regardless of their greater caution about the economy and consequent more conservative approach to finance, women are more likely to seek new ways of equipping the business for growth. They will look to reinvest in the business, focusing on the role that technologies such as the web and online software can play, especially when it comes to controlling costs, delivering service innovation and building their business presence.
Men, on the other hand, will turn to different strategies. Rather than building new communication channels to attract customers, they are more likely to introduce pricing tactics. Technology will be important but as an enabler for more efficient operational processes.
Perhaps the most successful approach however, is to combine the learnings of each group; to seek the proactive benefits of reinvestment and innovation through technology at the same time as honing existing operational processes and sales practices. For no matter what path a business chooses, taking action to increase competitiveness by reducing the cost base and improving service will provide a sound basis for improved business performance in any economic climate.
– Alan Osrin is the Managing Director of Sage Software Australia.
For another take on this issue, visit a blog by Jen Bishop from earlier this year where she looked at whether men or women make better leaders.