Despite talks of recession two-thirds of SMEs expect the economy to pick up.
Small-business operators, like the nation’s economic leaders, look to be brushing off talk of a looming recession, according to the latest MYOB Business Monitor.
The bi-annual national survey of over 1000 small business owners has found that 26 per cent of SME operators expect the economy to improve over the next year, with a further 33 per cent expecting it to remain the same.
Queensland operators were the most optimistic, with 34 per cent expecting an improvement, and those that had grown revenue in 2016 also positive for the year ahead (40 per cent).
MYOB CEO Tim Reed said that business conditions remained steady, with an uplift in those stating revenue had increased up to 27 per cent (from 21 per cent in the July Business Monitor).
“Australia’s start up community is continuing to fuel growth for the Australian economy, with some 42 per cent of start-ups and 35 per cent of establishing businesses reporting revenue increases. Rural businesses also returned a strong showing with 37 per cent achieving revenue growth.
“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,” said Reed.
“We’re now 12 months into the nation’s innovation agenda and we can see the results with high revenue growth coming from start-ups. In a challenging global environment, however, we need to ensure Australia remains an attractive place to do business and call on the government, opposition and cross-benches to support the proposed company tax reductions. Having one of the highest levels of company tax in the OECD just won’t cut it. We also need to ensure we keep removing roadblocks to business growth, so the push towards prompt payment protocols is also very welcome.”
Short-term outlook looking up
The MYOB Business Monitor also looked at expected revenue in the short term. The retail and hospitality sector is already feeling the Christmas cheer, with 46 per cent expecting an increased pipeline for revenue in the next three months.
The SMEs most looking forward to increased holiday season revenue are New South Wales (48 per cent) and South Australia (38 per cent) while West Australian SMEs were gloomiest with just 22 per cent.
Reed noted start-ups again featured among the groups with increased pipelines:
Investment intentions focused around product and digital innovations
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 per cent). They are also looking to broaden their offerings with the number or variety of products or services (28 per cent), working on customer retention (28 per cent) and investing more in selling online (26 per cent).
Baby Boomers, established businesses, construction and trades and transport, postal and warehousing businesses were much less likely to be investing.
“We’re seeing a real boost in all areas here with start-ups, young and ambitious Gen Ys and digitally minded businesses. Long may it continue,” Reed said.
*Inside Small Business