Old headaches return for SMEs as pandemic pressure subsides

The pressure on small and medium sized enterprises (SMEs) from economic decline due to COVID-19 is felt by 35% of SMEs, down 20 percentage points compared to this time last year, however, past pressures are creeping back to pre-pandemic levels with some increasing 6% in the past six months, finds MYOB's Business Monitor.

The latest research of 1,000+ Australian SME owners and operators found top business concerns to be cashflow and the cost of utilities, felt by 32% of respondents. The greatest increases include access to finance - a pressure for 26% of respondents up from 20% in December - and late payments from customers, increased to 29% from 25%.

As businesses return to normality, traditional business concerns are creeping back in, according to Emma Fawcett, MYOB’s General Manager - SME.

“It’s an unfortunate return to ‘business as usual’ for the country’s 2.29 million SMEs with 14 of the 16 business pressures measured by the MYOB Business Monitor, increasing in the last six months. This demonstrates that as COVID-19 pressure subsides other business pressures increase.

“SME concerns around payment times and old bugbears associated with physical presence – such as utilities like electricity and gas – are back on the table. It seems these issues were temporarily superseded during the pandemic, but are increasingly back on the radar now for many SMEs.”

Business confidence

The research, conducted before Victoria’s latest lockdown, found that overall, business owners are feeling positive about the year ahead, with 57% predicting an uplift in Australia’s economy and almost half (48%) predicting their revenue will be up a year’s time.

The latest Business Monitor shows a marked difference in confidence for the coming year by industry, with 78% of Finance and Insurance SMEs predicting the economy will improve in the next 12 months, compared to a national average of 57%. Retail and Hospitality are at the other end of the spectrum with only 46% predicting uplift.

Queensland's SMEs are the most confident with 60% predicting an improvement in the economy in the year ahead, followed by Victorians, at 59% when the survey was conducted prior to the latest lockdown. In New South Wales 58% believed the economy would improve, as did 55% of Western Australian SMEs.

Nationally, 30% report an increase in revenue on a year ago, up from 19% in December. The likelihood of a revenue increase in 12 months’ time is up 11 points to 48%, compared to 37% at the end of last year.

Business priorities

In the next 12 months SMEs are looking to increase the prices and margins on what they sell (30%), retain customers (29%), as well as customer acquisition, employee payments and marketing/advertising online (all 28%).

“After a challenging trading year, it’s encouraging to see SMEs looking to explore new revenue opportunities over the next 12 months,” Ms. Fawcett said.

“It’s concerning those operational pressures are on the rise as the country recovers from COVID-19, however an overall confidence in the economy as well as SME revenue, is a good sign for a sector that makes up 95% of Australian businesses.”

ENDS

*ABS February 2021

For further comment or other information please contact:

Selina Ife, Communications Consultant, MYOB
E: [email protected]

About MYOB

MYOB is a leading business platform with a purpose of helping more businesses in Australia and New Zealand start, survive and succeed. MYOB delivers end-to-end business management tools and accounting solutions for SMEs and the mid-market, direct to businesses, as well as a network of accountants, bookkeepers and consultants. MYOB operates across three key segments: Small and Medium Enterprises (SME), Enterprise, and Financial Services. For more information visit myob.com or follow @MYOB on Twitter.

About MYOB Business Monitor

The MYOB Business Monitor researches business performance and attitudes regarding areas such as profitability, cash flow, pipeline work, technology usage and the government.  This report presents the summary findings for key indicators from the MYOB Business Monitor comprising a national sample of 1,005 business owners, managers and directors (operators), conducted from March 17^th to April 22^nd 2021. The businesses participating in the online survey were both non-employing and employing businesses. All data has been weighted by industry type, location and number of employees, which are in line with the Australian Bureau of Statistics (ABS - Counts of Australian businesses, including entries & exits - 8165.0).