While over half (54%) of Australia’s small to medium sized business owners expect to see economic recovery in the next twelve months, the level of confidence in the recovery has fallen slightly since November, according to the April 2010 MYOB Business Monitor.
Reports of revenue decreases higher than reports of revenue increases
In the latest MYOB Business Monitor, other significant findings include reports that revenue decreases for business owners are higher than reports of revenue increases.
In a Federal election year, the signs are ominous for the Federal Government with business owners’ dissatisfaction with Federal Government support and contribution to business growing 7% since November 2009.
Tim Reed, MYOB CEO, says, “These results are telling us that while a small majority of small to medium sized business owners believe the economy will improve this year, a significant proportion still do not expect a recovery. We are definitely not out of the woods yet.”
Business owners in the Agriculture, Manufacturing and Wholesale industries were the least optimistic with 50% expecting the economy to improve within 12 months time.
This is not surprising given that 49% of business owners in these industries report a decrease in business revenue over the past 12 months, compared to 36% of business owners overall.
“Business owners are the true indicators of the Australian economy and the reports of revenue decreases in the past 12 months should be closely listened to by economic planners. As more than a third of business owners report sustained levels of revenue loss with no changes in their sales pipeline projections for the 2009/10 financial year, they are taking a far more conservative view of the economic recovery than some of the leading industry commentators,” says Mr Reed.
Innovation blooms in tough times
In a pleasing trend from the results, the tough economic times have seen a great deal of innovation from Australian businesses. One-fifth of business owners surveyed have increased the variety of their products and services in recent months.
“This finding supports the theory that tough times breed innovation. As the competition for wallet share increases, business owners are really striving to differentiate their offerings.”
The most optimistic business owners from the MYOB Business Monitor were those in the property and real estate industry with 67% expecting a revenue increase in the next 12 months.
Concerns about new Federal legislation and compliance reporting
The MYOB Business Monitor also revealed that 39% of business owners find that understanding the relevance of Government legislation and compliance changes to their business is their hardest challenge.
This was particularly pertinent amongst business owners in the construction and trade industries (45%), the retail and hospitality industries (45%) and micro businesses (44%).
These results highlight how sensitive small business operators are to changes, such as the move toward standard business reporting (SBR), further tax changes and the likely reforms from the Henry Review.
Rising dissatisfaction with Federal Government’s support for business
“MYOB supports any initiative from the Government that reduces the burden of administration and compliance for Aussie businesses. While business owners have registered a rising level of dissatisfaction with the Government, we believe that the latest reforms will contribute to making business life easier.
“Given that sentiment, MYOB is working even harder with the ATO and SBR project teams to help develop and guide the new reporting frameworks, and incorporate them in future releases of our AccountRight software range, so they genuinely make business life easier for business owners,” explains Mr Reed.