The latest edition of the MYOB Business Monitor reveals that 57 per cent of the 1000 SME owners and operators surveyed for the report have not experienced a recession throughout the time they have been in business. Despite this, 74 per cent say they know what the impact of one will have on their business.
As such, 47 per cent of SMEs are currently measuring productivity in their business despite preparing for a challenging economic period ahead. Furthermore, 54 per cent believe the economy will decline, and 31 per cent anticipate their revenue will be down in the next 12 months.
With further difficulties anticipated, small businesses will need to focus on productivity as they try to achieve more with less, according to Emma Fawcett, General Manager of SME at MYOB.
“We know this is a challenging environment for SMEs, with 40 per cent already impacted by rising interest rates,” Fawcett said. “The increasing cost of living has led to an increase in the cost of doing business, affecting profits for 38 per cent and, for almost a third (30 per cent), resulting in price increases for their customers. The survey results indicate that many small businesses are being cautious and holding steady, rather than investing in their business growth.”
The survey notes that 25 per cent of SMEs have digitised more of their operations in the last 12 months and 37 per cent of these businesses have been more productive as a result, with 34 per cent of those who have adopted digital tools saying that it has helped them to work remotely and collaborate.
“Digital capabilities are closely linked to productivity, helping SMEs save time, money, and improve accuracy in their business operations, as well as drive economic growth in uncertain times, but cost remains a barrier,” Fawcett explained. “While many SMEs are unlocking the power of digital tools, we know it’s not always easy to make investments, [and] 23 per cent of respondents said government support would help incentivise digital adoption.”
Over a third, 37 per cent, of respondents said that the best way to help drive the productivity of their employees is to improve skills and training programs available, followed by free tertiary education for in-demand professions (28 per cent), and government grants to help improve employees’ skills and training (26 per cent).
“The findings suggest that while SMEs are cautious about their current position and the economic environment, additional investment to help them to improve and upskill themselves and their teams would assist with productivity,” Fawcett said. “The last few years have shown Australia’s SMEs can carry on in unprecedented times and this data shows they are preparing for what’s to come.
“To protect against all the risks businesses face, SMEs need to adopt productivity tools and embrace technology. Driving this adoption will not only help SMEs thrive, it will also build a stronger economy that will positively impact Australia’s economic outlook,” Fawcett concluded.
