SME revenue rises

SME revenue rises to its highest level

Australia’s small to medium enterprise (SME) sector is showing the strongest revenue performance of the last four years. The proportion of businesses experiencing revenue decline has fallen to a five-year low, according to the March 2015 MYOB Business Monitor.

Now in its sixth year, the twice-yearly national survey of more than 1000 SME owners found that 23% have increased their revenue in the last 12 months. This is the highest level of revenue growth recorded since September 2011.

However, 30% of SMEs surveyed reported a decrease in revenue, the lowest level since March 2011. A further 43% reported stable revenue in the last 12 months.

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NSW had the highest proportion of businesses reporting increased revenue in the past year at 26%. The biggest revenue falls occurred in Qld and SA at 36%.

By sector

SMEs in finance and insurance had a significant increase in revenue growth with 41% reporting a rise, up from 20% in August 2014.

The businesses that reported the largest revenue falls in the past year were:

  • transport –38%
  • retail –37%
  • construction –36%

More government support

The continuing trend of revenue increases and another drop in the number of businesses reporting less revenue was welcome news for the nation’s SMEs, MYOB CEO Tim Reed said.

‘The latest Business Monitor results demonstrate that the hard work of small and medium business owners is paying off,’ said Tim Reed. ‘However, we continue to see a larger number experiencing declining revenue than those seeing it grow. For the sake of our economy, we need to address this by providing the nation’s SMEs with the support they need to drive their businesses forward.’

Overall, more SMEs felt that the federal government could be doing more to help them succeed.

The survey revealed:

  • 27% were satisfied with the level of support they receive
  • 33% were dissatisfied
  • Generation Y business owners were most satisfied
  • business owners aged 65 and above generally want more from the government

This trend was mirrored in national attitudes towards state governments’ performance in the last six months:

  • 34% were disappointed
  • 29% were satisfied

‘The message from Australia’s small and medium businesses is clear – more support from the federal and state governments is required to allow them to reach their full potential,’ Tim Reed said.

The message from Australia’s small and medium businesses is clear – more support from the federal and state governments is required to allow them to reach their full potential

With the NSW state election looming, the results show that 35% of the state’s SME are satisfied with the Liberal Party’s performance in the last six months, while 26% are dissatisfied.

Businesses in SA, at 50%, and WA, at 40%, were least satisfied with their state government’s performance in the last six months.

On a national scale, 37% of SME said that the Liberal Party is the political party most trusted to manage the country’s economy. Only 18% backed the Labour Party.

Next 12 months

While the survey shows 33% of SMEs are expecting revenue to grow in the coming year, the proportion forecasting revenue to decrease climbed four points to 22%.

Businesses in Vic and Qld have the highest expectations for revenue growth, at 35% for both states, while those in WA were most likely to expect a decrease at 31%.

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The number of SMEs with more sales in the pipeline than they would normally expect remained stable at 36%, although the proportion with less sales decreased three points to 20%.

NSW and WA are the states with the strongest sales pipeline while SA SMEs reported the lowest amount of sales in the pipeline at 32%.