myob business monitor · 2020-03-29 · in the april 2016 business monitor survey on which this...

MYOB BUSINESS MONITOR:

THE VOICE OF AUSTRALIAN BUSINESS OWNERS & MANAGERS

May 2016 report

MYOB Business Monitor May 2016 © 2016 MYOB Limited, all rights reserved. Copyright strictly enforced.

BUSINESS PERFORMANCE

Almost half the Australian business operators expect the economy to decline over the next 12 months In the April 2016 Business Monitor survey on which this report is based, Australian small and medium business owners and managers (herein known as ‘operators’) were pessimistic about the Australian economy over the next 12 months, with 42% expecting the economy to decline and only 24% expecting it to improve. The results remained statistically unchanged since the last wave. The most optimistic operators were:

Operators who had experienced increased revenue in the preceding 12 months (40% expected an improvement)

New South Wales operators (29%)

Business conditions remained steady Operators reported similar levels of revenue performance over the previous 12 months to the previous three surveys. Under one third (31%) reported a decrease in annual revenue, and 25% reported an increase. A further 42% said revenue had been steady and 2% were unsure. Gen Y operators (35%), retail and hospitality businesses (34%), exporters (34%), importers (33%), and metropolitan based operators (28%) were more likely to have seen an improvement in revenue in the last 12 months.

19%22% 22%

26% 26%19% 20% 18% 18% 18%

22% 21% 23% 22%25%

39% 39%36% 34% 34%

38% 38%41% 39% 39%

34%31% 30% 30% 31%

JUL 09 NOV 09 MAR 10 OCT 10 MAR 11 SEPT 11 FEB 12 MAY 12 FEB 13 AUG 13 FEB 14 AUG 14 FEB 15 OCT 15 APR 16

Changes in revenue - previous 12 months

Revenue up Revenue down

7%

35%

32%

21%

3% 3%

Decline significantly

Decline slightly

Remain the same

Improve slightly

Improve significantly

Don’t know


Expected revenue over the next 12 months remained steady, but sales in the pipeline for the next three months showed a decline, indicating a level of short-term concern

While two in five operators (41%) expected their revenue to remain the same over the next 12 months, the proportion of operators expecting their revenue to increase was similar to the previous wave at 31%. Almost one in four operators (24%) expected a decline in revenue over the next 12 months. Start-ups (49%) and establishing businesses (41%), franchisors (47%), Gen Y operators (46%), exporters (45%) and importers (40%) were more likely to expect their revenue to increase over the next 12 months, as were metropolitan based operators (38%), operators with social media site (38%) or business website (36%). In terms of the shorter term three-month pipeline, 40% of operators commented they had the same amount of sales/work in the pipeline for the April to June quarter. The proportion of operators stating they had more in their pipeline has declined however from 38% in October 2015 to only 34% this wave. In addition almost one in four operators (24%) felt they had less in the pipeline compared to only 19% in the previous wave. Operators more likely to state they had more work/sales in their pipeline in the next three months included:

Operators whose revenue was up in the previous 12 months (64%)

Exporters (53%) and importers (48%)

Start-ups (52%)

Gen Y Operators (50%)

Franchisors (49%)

Operators with a social media site (44%) or business website (40%)

Metropolitan based operators (39%)

37% 37%

28%33%

29% 31% 29% 30% 28%33%

36% 36% 38%34%

29%

21%26% 24%

30% 28% 27% 28% 27%

21% 23%20% 19%

24%

NOV 09 MAR 10 OCT 10 MAR 11 SEPT 11 FEB 12 MAY 12 FEB 13 AUG 13 FEB 14 AUG 14 FEB 15 OCT 15 APR 16

Sales/work in the pipeline - next 3 months

Total more Total less

37%

46% 48%43% 41%

32% 30% 29% 30%25%

34% 32% 33% 28%31%

15% 12% 12% 14% 14%20%

24% 22%19%

22% 22%18%

22% 27%24%

JUL 09 NOV 09MAR 10 OCT 10 MAR 11SEPT 11 FEB 12 MAY 12 FEB 13 AUG 13 FEB 14 AUG 14 FEB 15 OCT 15 APR 16

Expected changes in revenue - next 12 months

Revenue up Revenue down


Expectations by location

% expecting Australian economy to improve in the next 12 months

% expecting increase in revenue in next 12 months

% reporting more in pipeline for next 3 months

Total AU 24% 31% 34%

New South Wales 29% 35% 38%

Victoria 27% 30% 33%

Queensland 17% 30% 34%

South Australia 20% 29% 39%

Western Australia 19% 28% 26%

Metro 26% 38% 39%

Regional/Suburban 22% 27% 33%

Rural 20% 19% 21%

Green = Significantly higher than total Red = Significantly lower than total

Expectations by industry type

Agribusiness

Business, prof. &

property services

Construction

& trades

Finance &

insurance

Manufacturing &

wholesale

Retail & hospitality

Transport, postal &

warehousing

% expecting economy to improve in next 12 months

12% 29% 14% 28% 34% 29% 16%

% expecting increase in revenue in next 12 months

22% 36% 25% 31% 39% 35% 25%

% reporting more in pipeline for next 3 months

21% 37% 31% 32% 39% 39% 32%



Investment intentions show emphasis on product proliferation and pricing and margins amongst others In this wave, there were six areas of business in which operators were most likely to increase their focus/investment in the next 12 months:

Number or variety of products or services offered (25%)

Prices and margins on products/services sold (24%)

Customer retention (24%)

Amount paid to employees (23%)

Customer acquisition (22%)

Sales of products and services online (22%) The only significant differences compared to the previous wave were a decline in the emphasis on prices and margins on products and services from 28% last wave to 24% this wave and the number of part-time or casual people employed (down from 19% last wave to 14%).

Key differences

Key differences were noted across a number of categories, including by age and size of the business. As seen in the tables overleaf, retail and hospitality, medium businesses, start-ups and establishing businesses were more likely to increase focus/investment in the next 12 months across a number of areas, while established businesses, construction and trades and transport, postal and warehousing businesses were much less likely to be investing. In addition, Gen Y operators, operators with a website or social media site, operators whose revenue was up in the preceding 12 months, start-ups, importers and exporters, franchisees and cloud computing users were all much more likely to be increasing their investment across a range of issues.

14%

18%

18%

18%

22%

19%

19%

21%

26%

23%

27%

25%

26%

12%

17%

18%

18%

20%

21%

21%

22%

29%

23%

27%

26%

26%

14%

19%

20%

18%

22%

21%

23%

21%

25%

25%

27%

28%

26%

12%

14%

17%

18%

19%

20%

20%

22%

22%

23%

24%

24%

25%

Number of full time employees

Number of part time or casualemployees

Working with business advisers toenhance your business

The $ value of offline marketing andadvertising

Sales of products/services offline

Investment in IT systems&processes

The $ value of online marketing andadvertising

Sales of products/services online

Focus on customer acquisitionstrategies

Amount you pay the employees

Focus on customer retention strategies

Your prices and margins onproduct/services sold

Number or variety of products orservices offered

Where businesses plan to increase investment

Apr 16 Oct 15 Feb 15 Aug 14


Planned increase in focus/investment by age of business and age of operator Total Start ups Establishing Maturing Established Gen Y Gen X

Baby Boomers

Tradition-alists

No. or variety of products offered 25% 41% 30% 16% 16% 38% 23% 20% 12%

Prices/margin on products/services 24% 24% 26% 23% 18% 32% 28% 19% 7%

Customer retention strategies 24% 33% 23% 20% 18% 30% 23% 24% 14%

Amount employees are paid 23% 22% 20% 23% 20% 29% 24% 21% 20%

Customer acquisition strategies 22% 29% 30% 16% 14% 31% 24% 16% 14%

Sale of products/services online 22% 33% 24% 21% 15% 36% 22% 17% 8%

Value of online marketing 20% 26% 19% 17% 14% 29% 23% 14% 2%

Investment in IT systems/processes 20% 22% 20% 11% 17% 28% 20% 16% 25%

Sale of products/services offline 19% 22% 22% 17% 16% 27% 18% 17% 11%

Value of offline marketing 18% 20% 18% 16% 13% 29% 20% 13% 4%

Working with business advisors 17% 26% 17% 18% 11% 27% 17% 12% 6%

No. of part time/casual staff 14% 17% 15% 14% 7% 23% 15% 9% 5%

No. of full time employees 12% 21% 17% 12% 6% 22% 15% 6% 5%



Planned increase in focus/investment by industry type

Agribusiness

Business, prof. &

property services

Construction &

trades

Finance &

insurance

Manufacturing &

wholesale

Retail &

hospitality

Transport, postal &

warehousing

No. or variety of products offered

20% 24% 13% 26% 36% 37% 14%

Prices/margin on products/services

14% 23% 30% 15% 28% 30% 16%

Customer retention strategies

26% 26% 10% 38% 29% 28% 15%

Amount employees are paid

18% 26% 20% 20% 30% 29% 18%

Customer acquisition strategies

8% 25% 12% 28% 22% 27% 23%

Sale of products/services online

17% 25% 8% 18% 29% 32% 30%

Value of online marketing

11% 19% 13% 20% 33% 27% 9%

Investment in IT systems/ processes

14% 23% 12% 31% 17% 21% 20%

Sale of products/services offline

14% 23% 12% 17% 29% 21% 14%

Value of offline marketing

20% 19% 13% 18% 20% 22% 19%

Working with business advisors

20% 15% 13% 19% 19% 16% 23%

No. of part time/casual staff

9% 13% 13% 10% 20% 19% 14%

No. of full time employees

6% 18% 11% 7% 16% 14% 7%



The expected pressure of cashflow rose this wave When asked what elements of the business environment operators expected to cause an extreme amount or quite a lot of pressure on their business in the next 12 months, cashflow emerged as the top business pressure, increasing from 22% to 26%. While the order changed, the top five business pressures remained the same, but interest rates jumped into equal fifth position up from 10th last wave.

1. Cash flow (last wave – 4th) 2= Competitive activity (last wave 2nd=) 2= Fuel prices (last wave 2nd=) 4. Attracting new customers (last wave – 1st) 5= Profitability and price margins (last wave 5th) 5= Interest rates (last wave 10th=)

The pressure of business financing also rose this wave, as operators contemplated interest rate rises. Key differences for the major pressures are detailed below.

Cash flow Cash flow was a greater pressure for:

• Operators who reported a revenue fall in the previous 12 months (37%) • Operators with a social media site (32%) • Females (31%) • Users of cloud computing (30%)

Competitive activity Competitive activity was a greater pressure for:

Operators who reported a revenue fall in the previous 12 months (31%)

Operators with a social media site (30%) or website (29%)

Fuel prices Fuel prices were a greater pressure for:

• Transport, postal & warehousing (56%) and construction & trades businesses (34%)

16%

15%

18%

15%

17%

17%

20%

20%

27%

22%

24%

28%

32%

33%

26%

30%

16%

14%

19%

18%

18%

19%

22%

21%

22%

24%

21%

28%

32%

24%

29%

30%

13%

11%

13%

14%

15%

16%

19%

14%

17%

19%

15%

21%

24%

23%

23%

22%

12%

13%

14%

15%

15%

16%

17%

18%

19%

19%

23%

23%

24%

25%

25%

26%

0% 10% 20% 30% 40%

Upgrading hardware or other equipment

Upgrading IT software, systems or processes

Marketing/customer relationships

Exchange rates

Managing bad debt

Cost of online technologies

Retain existing customers

Business finance/funding/overdraft

Customer payment timing

Meet tax obligations

Interest rates

Profitability & price margins

Attract new customers

Fuel prices

Competitive activity

Cashflow

Pressure Points (% extreme/lot)

Apr 16 Oct 15 Feb 15 Aug 14


Attracting new customers Attracting new customers was a greater pressure for:

Manufacturing (37%) and retail and hospitality businesses (33%)

Operators who reported a revenue fall in the previous 12 months (30%)

Operators with a social media site or website (30% each)

Price margins and/or profitability Price margins and/or profitability were a greater pressure for:

Western Australian based operators (36%)

Rural businesses (33%)

Operators with a website or social media site (27% each)

Interest rates Interest rates were a greater pressure for:

Franchisors (37%)

Pressure points by industry are shown in the table on the following page. As can be seen, manufacturing and wholesale and construction and trades businesses were experiencing more pressure than other industries.


Pressure points by industry

Agribusiness

Business, prof. &

property services

Construction &

trades

Finance &

insurance

Manufacturing

& wholesale

Retail &

hospitality

Transport, postal &

warehousing

Cash flow 24% 19% 30% 28% 31% 27% 33%

Competitive activity 28% 22% 22% 22% 32% 29% 31%

Fuel prices 36% 15% 34% 14% 28% 18% 56%

Attracting new customers

18% 20% 23% 23% 37% 33% 22%

Price margins & profitability

35% 18% 21% 21% 33% 30% 27%

Interest rates 25% 17% 30% 27% 25% 24% 23%

Meeting your tax obligations

18% 17% 28% 5% 13% 18% 34%

Timing of customer payments

12% 18% 29% 8% 31% 13% 20%

Business finance/ funding/overdraft

21% 16% 21% 15% 16% 17% 24%

Retaining existing customers

12% 18% 19% 7% 17% 16% 27%

Online technology costs 14% 19% 13% 8% 18% 16% 22%

Managing bad debt 6% 12% 22% 16% 23% 12% 25%

Exchange rates 24% 14% 10% 5% 37% 16% 7%

Marketing & customer relationships

12% 14% 13% 13% 18% 15% 20%

Updating IT software, systems or processes

12% 14% 10% 18% 18% 10% 12%

Updating hardware or other equipment

9% 11% 20% 5% 13% 13% 11%



ONLINE ACTIVITY & THE DIGITAL ECONOMY

Operators were asked about which of a number of online services they currently used, and, if they used any of the following services, they were deemed to be using cloud computing:

Sell all products and services online (online store only, no premises for customers to visit)

Use online accounting software

Use online file back-up (e.g. documents, photos, videos)

Use online file sharing, storage and backup (e.g. DropBox, OneDrive, GoogleDrive)

Write, edit and collaborate documents using an online service in a web browser (e.g. Google Docs, Office365, Zoho) In total, 44% of operators were using cloud computing, a similar result to the previous survey. Social media usage has increased to two in five operators since the previous survey The use of social media for business purposes increased this wave to 40%, up from 35% in the previous wave. Most popular social media for business remained Facebook (16%) and LinkedIn (15%). The use of SEO tools also increased this wave from 8% to 12%. Accepting online payments from customers was only used by 27% of operators compared to 44% of their New Zealand counterparts.

INTERNET/EMAIL MARKETING Feb 15 Oct 15 Apr 16

Modify your website to improve online search results (SEO) 11% 8% 12%

Conduct email marketing to potential or existing customers 11% 8% 10%

Purchase online advertising or keywords (SEM) 6% 4% 5%

SOCIAL MEDIA USAGE

Connect with customers and fans via a business page on Facebook 18% 15% 16%

Network with business colleagues and/or clients on LinkedIn 17% 14% 15%

Promoted or boosted your business’ posts on social media n/a 10% 12%

Share news and updates via a company blog (either via your own website or blog hosting site) 8% 7% 8%

Connect with customers and fans via a business page on Google+ 5% 6% 6%

Connect with customers and fans via Twitter 7% 5% 6%

Connect with customers and fans via a business page on YouTube 4% 4% 5%

Green = Significantly higher than previous wave Red = Significantly lower than previous wave


SOCIAL MEDIA USAGE Feb 15 Oct 15 Apr 16

Use and connect with customers and fans via a business page on Pinterest 5% 4% 4%

Use and connect with customers and fans via any other type of social media/social networking site 4% 2% 3%

Nett social media 38% 35% 40%

BUYING/SELLING ONLINE

Accept online payment from your customers e.g. via Internet banking, a shopping cart or mobile app 31% 25% 27%

Buy products/services online (e.g. eBay, Trading Post, Trade Me or Other Website) 29% 18% 20%

Sell products and/or services online via your own website 14% 9% 11%

Sell products /services online via a website other than your own 10% 8% 9%

Sell all products and services online (online store only, no premises for customers to visit) 9% 6% 6%

ONLINE VOICE COMMUNICATIONS

Use internal online video/voice communication (e.g. Lync, Skype) 12% 9% 11%

Use online video (e.g. watching or creating videos) 8% 5% 7%

Use external online video/voice communication (e.g. WebEx, GoTo Meeting) 8% 6% 5%

Provide live online customer support (e.g. ZenDesk, UserVoice) 5% 3% 3%

Provide live online chat internally between employees (e.g. Lync, Campfire, HipChat) 4% 3% 3%

ONLINE FILE SHARING AND COLLABORATION

Use online file sharing, storage and backup (e.g. DropBox, OneDrive, GoogleDrive) 17% 15% 16%

Use online file back-up (e.g. documents, photos, videos) 20% 14% 15%

Write, edit and collaborate documents using an online service in a web browser (e.g. Google Docs, Office365, Zoho) 8% 8% 8%

OTHER

Use email 62% 55% 57%

Use online banking (via website or browser) 56% 48% 47%

Use one or more smartphones 45% 38% 38%

Use online banking to make payments to suppliers - - 37%

Use mobile phone app banking - - 28%

Use one or more tablets (e.g. iPad) 29% 23% 25%

Have internet access but do not do any / not interested in any of above activities 5% 12% 11%

Green = Significantly higher than previous wave Red = Significantly lower than previous wave


The table below and on the following page details the usage of these online tools by industry. Selling online and social media was, as expected, more utilised by retail and hospitality operators, while social media was under-utilised by construction and trades and agribusinesses.

Tools by industry type

Agribusiness

Business, prof. &

property services

Construction

& trades

Finance &

insurance

Manufacturing &

wholesale

Retail &

hospitality

Transport, postal &

warehousing

INTERNET/EMAIL MARKETING

Modify your website to improve online search results (SEO)

5% 14% 6% 16% 14% 15% 11%

Conduct email marketing to potential or existing customers

3% 15% 5% 8% 18% 9% 7%

Purchase online advertising or keywords (SEM) 3% 8% 6% - 1% 9% -

BUYING/SELLING ONLINE

Accept online payment from your customers 26% 28% 27% 20% 31% 24% 27%

Buy products/services online 26% 16% 21% 34% 22% 21% 11%

Sell products and/or services online via your own website

11% 11% 2% 8% 19% 20% 4%

Sell products /services online via a website other than your own

6% 11% 3% 8% 16% 14% 2%

Sell all products and services online - 7% 1% 3% 19% 13% -

SOCIAL MEDIA USAGE

Connect with customers/fans via Facebook 3% 17% 7% 7% 20% 32% 16%

Network with colleagues/clients on LinkedIn 5% 21% 6% 33% 20% 12% -

Promoted or boosted your business’ posts on social media

6% 14% 6% 11% 19% 19% 5%

Share news and updates via a company blog - 9% 3% 5% 13% 12% 4%

Connect with customers/fans via Google+ 2% 8% 2% - 5% 9% 6%

Connect with customers and fans via Twitter - 11% 2% 2% 11% 8% 2%



Tools by industry type

Agribusiness

Business, prof. &

property services

Construction &

trades

Finance &

insurance

Manufacturing &

wholesale

Retail &

hospitality

Transport, postal &

warehousing

Connect with customers/fans via YouTube - 6% 2% - 5% 8% 8%

Connect with customers and fans via Pinterest - 5% 1% - 10% 7% -

Use and connect with customers and fans via any other type of social networking site

- 4% 1% - 10% 5% 5%

Nett social media 11% 48% 20% 51% 50% 55% 27%

ONLINE VOICE COMMUNICATIONS

Use internal online video/voice communication 8% 16% 6% 17% 12% 6% 2%

Use online video - 8% 4% 18% 10% 7% 5%

Use external online video/voice communication 2% 6% 1% 10% 1% 5% 5%

Provide live online chat internally between employees

3% 4% 1% - 1% 6% 5%

Provide live online customer support - 6% 1% - - 4% 2%

ONLINE FILE SHARING AND COLLABORATION

Use online file sharing, storage and backup 12% 21% 14% 16% 20% 10% 4%

Use online file back-up 6% 17% 12% 24% 22% 13% 12%

Write, edit and collaborate documents using an online service in a web browser

3% 10% 7% 12% 7% 8% 2%

OTHER

Use email 62% 56% 56% 65% 59% 44% 49%

Use online banking (via website or browser) 44% 43% 49% 60% 47% 34% 57%

Use one or more smartphones 43% 37% 33% 49% 47% 22% 48% Use online banking to make payments to suppliers 44% 35% 40% 44% 39% 27% 30%

Use mobile phone app banking 30% 29% 33% 28% 28% 15% 25%

Use one or more tablets 24% 26% 22% 34% 28% 17% 18%


Some of the key differences noted are detailed below:

Gen Y and Gen X operators were much less likely to use email (36% and 49% respectively) or online banking (29% and 39% respectively) compared to their Baby Boomer counterparts (72% and 60% respectively)

Gen X operators were more likely to use their mobile phone app for banking (33%)

Operators more likely to use social media included: operators with a social media (72%) or website (59%), franchisees (68%) and franchisors (53%), importers (56%) and exporters (55%), retail and hospitality businesses (55%) and business, professional and property services (48%), Gen Y operators (52%), users of cloud computing (46%), females (46%) and metropolitan based businesses (44%).

Online file sharing most recognised form of cloud-based technology Operators were asked this wave which of the nominated activities they considered to be cloud-based technology. As can be seen from the table opposite, online file sharing was most recognised with 41% of operators nominating this as cloud-based technology. Traditionalists were less likely to recognise any of the activities to be cloud based (43% stated none and a further 20% did not know). Operators with a website or social media site were more likely to state that these activities were cloud-based (only 11% and 9% respectively stated none were cloud-based), as did those already using cloud-based technology (7% stated none were cloud-based).

Up to 55% of operators still uncomfortable with cloud-based technology beyond email, but it’s very much age-dependent Between one-third and 55% of operators stated they would not consider using cloud-based technology for these tasks, with email being the most palatable at this stage. Less than 20% of the operators surveyed were currently using cloud-based technology for any of the nominated services. The exceptions were Gen Y and Gen X operators who were much more likely to be using already or would consider using cloud based technology. The size of the business had little impact on the current or desired take-up of cloud based technology.

Activities considered cloud-based technology April 2016 (n=1008)

Using online file sharing, storage and backup (e.g. DropBox, OneDrive, GoogleDrive)

41%

Sending an e-mail 27%

Writing, editing and collaborating documents using an online service in a web browser

23%

Online banking 22%

Social media 20%

Using online video/voice communication 12%

None of the above 14%

Don’t know 18%


Total Gen Y Gen X Baby Boomers Traditionalists

Would consider

Using already

Would consider

Using already

Would consider

Using already

Would consider

Using already

Would consider

Using already

Payroll 28% 11% 39% 17% 39% 15% 17% 6% 11% 1%

Enterprise Resource Planning 27% 8% 40% 14% 37% 10% 15% 3% 7% 1%

Customer Relationship Management 33% 9% 41% 14% 41% 13% 24% 3% 8% 2%

Accounting / Bookkeeping 35% 13% 44% 17% 41% 18% 28% 7% 19% 1%

E-mail 43% 17% 52% 20% 48% 20% 35% 16% 46% 2%

Banking 37% 16% 42% 17% 42% 21% 30% 14% 30% 3%

Social Media 32% 13% 41% 19% 41% 18% 24% 7% 2% 0%

Internal Communications 32% 10% 42% 15% 41% 13% 23% 5% 6% 0%

External Communications 36% 11% 43% 17% 41% 14% 28% 7% 29% 0%


43% 37% 36% 35% 33% 32% 32% 28% 27%

33% 41% 43% 44% 50% 48% 49% 51% 55%

17% 16% 11% 13% 9% 13% 10% 11% 8%6% 6% 10% 8% 9% 7% 9% 9% 10%

E-MAIL BANKING EXTERNAL COMMUNICATIONS

ACCOUNTING / BOOKKEEPING

CUSTOMER RELATIONSHIP MANAGEMENT

SOCIAL MEDIA INTERNAL COMMUNICATION

PAYROLL ENTERPRISE RESOURCE PLANNING

Cloud-based activities

Yes No Already using in the business Don’t know


More Australian operators have an online presence this wave

The proportion of operators without an online presence has dropped this wave from 41% to 37%, showing a steady increase in the proportion of businesses moving online. Gen Y (70%) and Gen X operators (62%) were much more likely to have an online presence (70%), while Traditionalists (26%) and Baby Boomers (46%) were less likely to have an online presence. As well as older operators, other operators more likely to be laggards, included:

Agribusinesses (61%) and transport, postal & warehousing businesses (57%)

Rural businesses (54% had no online presence)

Established businesses (53%)

Businesses with a revenue between $40 – 74k (43%)

Sole operators (43%) Please note: the question about having a social media site was only introduced in August 13

Key differences by industry, operator age and size of business are shown on the following page.

Total Gen Y Gen X Baby Boomers

Traditionalists Sole operators

Micro Small Medium

Do not have an online presence 37% 21% 30% 49% 66% 43% 36% 15% 15%

Only have a business website 26% 29% 29% 24% 17% 24% 25% 40% 42%

Only have a social media site for business

12% 19% 15% 8% 2% 14% 9% 10% 12%

Have both a business website & a social media site for business

17% 23% 17% 14% 6% 13% 23% 25% 19%

Don’t know 7% 9% 8% 5% 8% 6% 6% 9% 12%


39%47%

39% 38% 36% 38% 38% 38% 42% 44% 47%42% 43%

20%27% 31%

26%29% 29%

61%51% 57% 59%

62%60% 59%

50%

43% 41% 41% 41% 37%

Mar10

Oct10

Mar11

Sept11

Feb12

May12

Feb13

Aug13

Feb14

Aug14

Feb15

Oct15

Apr16

Proportion of Australian businesses with an online presence

Website Social media site No online presence


Agribusiness

Business, prof. &

property services

Construction

& trades

Finance &

insurance

Manufacturing

& wholesale

Retail &

hospitality

Transport, postal &

warehousing

Do not have an online presence

61% 37% 44% 26% 23% 21% 57%

Only have a business website

17% 29% 25% 33% 37% 26% 15%

Only have a social media site for business

3% 12% 14% 12% 13% 20% 11%

Have both a business website & a social media site for business

8% 17% 9% 21% 24% 24% 7%

Don’t know 11% 6% 8% 8% 3% 9% 9%


Operators with an online presence were asked which of a number of business changes had occurred as a result of having an online presence. As can be seen in the table on the following page, having a business website was perceived to have resulted in more customer leads and enquiries (45%) and enabled a more professional brand image. Having a social media site provided different benefits, particularly allowing more interactions with customers (45%), as well as generating more customer enquiries or leads (40%). The total number of benefits provided by a social media site this wave was significantly more than the previous wave. In terms of having a business website, micro businesses reported more success in generating more customer leads and enquiries (55%), as did regional operators (54% compared to 37% of metropolitan based operators). Baby Boomers were more likely to state that a website gave them a more professional brand image (50% compared to 29% of Gen X operators), as did micro businesses (53%). Micro businesses also saw more benefit in their website making it easier for customers to do business with them (43%). Gen Y operators felt their greatest benefit in having a website was that it allowed more interactions with customers (46%), and also were more likely to comment that having a social media site increased their appeal to younger employees (35%). Baby Boomers were much more likely to say that a social media site had not benefitted their business at all (20% compared to 3% of Gen Y operators).


Impact of online presence Result of having a business website Result of having a social media site

Feb 2015 (n=501)

Oct 2015 (n=423)

April 2016 (n=459)

Feb 2015 (n=286)

Oct 2015 (n=318)

April 2016 (n=329)

Generated more customer enquiries or leads in general 41% 44% 45% 38% 30% 40%

Enabled your business to have a more professional brand image 39% 38% 41% 29% 24% 30%

Made it easier for customers to do business with you 35% 39% 34% 27% 24% 33%

Allowed more interaction with customers 34% 33% 34% 49% 42% 45%

Enabled you to compete better with your competitors 25% 26% 27% 25% 20% 27%

Increased revenue or income in general 25% 20% 24% 21% 17% 28%

Enabled access to more markets 25% 19% 24% 25% 18% 27%

Allowed you to sell online to customers 24% 23% 20% 19% 12% 20%

Increased your appeal to younger customers 18% 20% 17% 31% 26% 25%

Enabled you to compete internationally/opened your market to international customers

14% 13% 16% 13% 11% 17%

Increased your appeal to younger employees 12% 12% 10% 19% 15% 19%

Has not benefitted my business 9% 9% 9% 14% 15% 11%

Green = Significantly better than website/social media site Red = Significantly lower than website/social media site

Significant increase since last wave Significant decrease since last wave

Pace of technology perceived as about right for Australian operators Over half (57%) of Australian operators found the pace of technology innovation to be ‘about right’, but the proportion stating it was too slow has increased from 19% last wave to 24% this wave. Business, professional and property services operators were more likely to be finding the pace of technology too slow (31%).

20% 17%

57% 57%

19% 24%4% 3%

Oct 15 Apr 16

Speed of Technology Change

Don’t know

Too slow – more investment is needed in this area

About right for my needs


Online security concerns rise Less than a quarter (23%) of operators had no online security issues compared to 33% in the previous wave. Hackers gaining access to their data remained the biggest issue of concern (42%) for operators, rising from 34% in the previous wave. Operators more concerned about online security concerns included:

Franchisors (only 4% stated they were not concerned about online security) and franchisees (9%)

Small businesses (12%)

Exporters and importers (15% each)

Gen Y operators (15%)

Users of cloud computing (15%)

Operators with a website (20%)

Dissatisfaction levels with Internet speed and cost rise Over one quarter of operators (29%) expressed dissatisfaction with the speed of their Internet connection, while 27% expressed dissatisfaction with the cost, statistically higher than the previous wave. Rural businesses (46%) and established businesses (35%) were more dissatisfied with the speed of their Internet connection.

Online security concerns Oct 2015 (n=1024)

April 2016 (n=1008)

Hackers gaining access to your business data 34% 42%

Losing access to your data 29% 38%

Losing control of your data 25% 33%

Competitor access to your business data 13% 15%

Access to your data by local government 13% 15%

Access to your data by foreign governments 12% 14%

Do not have any concerns about online security 33% 23%

Don’t know 6% 7%


26% 28%24% 25%

29%

48% 47% 49%

49% 46%

26% 26% 23% 21%27%

44% 45% 48%

52%47%

FEB-14 AUG-14 FEB 15 OCT 15 APR 16

Satisfaction with speed and cost of Internet

Dissatisfaction with speed Sartisfaction with speed

Dissatisfaction with cost Satisfaction with cost


SPECIAL TOPIC: EMPLOYMENT

Almost three quarters of employing businesses experience some pain point with regard to employing staff In terms of employing staff, four key pain points emerged for employing businesses:

Finding new staff

Dealing with payroll compliance

The ability to dismiss employees

End of year paperwork Because of the increased pressure from all four of these issues compared to the previous wave, there were fewer operators stating they had no pain points regarding employing staff (down from 35% in the previous wave to 23% this wave). Operators more likely to experience pain points employing staff included:

- Gen Y operators (only 10% stated they had no pain points compared to 32% of Baby Boomers) - Small businesses (only 12% stated they had no pain points and 44% mentioned the ability to dismiss an employee as a pain point) - Retail and hospitality businesses (14% stated they had no pain points and 42% specifically mentioned the hiring of new staff as a pain point)

Pain points in employing staff Oct 2015 (n=483)

April 2016 (n=468)

The ability to find new staff 27% 39%

Dealing with payroll compliance – eg student loans, parental leave, child support payments

21% 29%

Ability to dismiss employees 19% 29%

End of year paperwork eg payment summaries 16% 27%

The process of hiring new staff 19% 23%

Demand for flexible working hours 17% 21%

Understanding health and safety compliance (employers’ responsibility etc.)

10% 18%

I do not have any pain points with regard to employing staff

35% 23%



Majority of eligible businesses already comply with Superstream requirements, but construction and trades businesses lagging Of the businesses that qualified for Superstream (34% of operators surveyed), 75% were aware of the 30 June deadline and 70% thought their business already complied with the Superstream requirements. Only 17% of operators stated they did not currently comply, while 13% were unsure. Construction and trades businesses were least likely to be currently complying with their Superstream requirements (31% did not comply). A number of reasons were given as to why the non-compliant businesses had not yet met their obligations, with the key issues being:

- They found it confusing (27%) - They did not think it applied to their business (25%) - They did not have enough information (23%)

Superfunds providing most assistance in achieving Superstream outcomes

In terms of the systems and processes that had been put in place to assist with meeting the Superstream requirements, use of the superannuation fund’s online system was mentioned by 31% of operators, while 28% stated they had not needed to make any changes to their current system.

Systems and process put in place to meet Superstream requirements

(n=239) %

Started using our superfund’s online system 31%

Started using a superannuation clearing house 20%

Updated or purchased a new payroll system 17%

Started using a messaging portal 7%

Did not need to make any changes to comply to Superstream

28%

Don’t know 9%

Yes70%

No17%

Don’t know13%

Comply with Superstream


SPECIAL TOPIC: END OF FINANCIAL YEAR (EOFY) PREPARATION

Over half (58%) of operators start preparations before EOFY, but 35% start afterwards

Operators were asked when they started work on their end of financial year (EOFY) reporting. Work started on this important task anywhere from more than a month prior (30%) to more than two months after (10%); with 58% starting before the EOFY and 35% starting after (7% did not know when they started).

Agribusinesses (53%), maturing (45%) and established businesses (43%), traditionalists (44%) and Baby Boomers (41%) and sole operators (39%) were more likely to start after the end of the financial year.

Over two in five operators working weekends to meet their EOFY obligations Over two in five operators (42%) stated they had worked on weekends to meet their EOFY obligations (compared to 37% in the previous year) and a further 26% had worked past midnight. One third of operators (33%) did not think they had made any time sacrifices in terms of meeting their EOFY obligations (down from 40% in the previous year). Traditionalists (68%) and Baby Boomers (51%) were more likely to state they had not made any time sacrifices (compared to 32% of Gen X and 25% of Gen Y operators), as did established (51%) and maturing businesses (49%) and sole operators (44%).

Time sacrifices to meet EOFY obligations Jan 2015 (n=1023)

April 2016 (n=1008)

Worked weekends 37% 42% Worked beyond midnight 22% 26% Turned down an invitation to catch up with friends 17% 20% Missed an important family event 11% 13% Been unable to take planned holidays 14% 12% Hired additional staff 7% 8% Hired a babysitter for a significant amount of time 5% 6% None of the above 40% 33% Don’t know 3% 4%

30%

20%

7%

6%

11%

7%

10%

7%

At least a month before EOFY

Between 1 - 4 weeks before EOFY

Within a week before EOFY

Within a week after EOFY

Within 1 - 4 weeks after EOFY

Within 1 - 2 months after EOFY

More than 2 months after EOFY

Don't know

EOFY preparation start time


Almost two thirds of operators stated they would be using an accountant this year When asked in what ways they would complete their EOFY obligations this year, 63% said they would be using an accountant, 19% a bookkeeper and 36% would be doing it themselves (presumably some with the assistance of an accountant or bookkeeper as this was a multiple response question). Gen Y operators were more likely to use a bookkeeper (32%) and less likely than other age groups to use an accountant (48%) or do it themselves (29%). Baby Boomers (70%) and established businesses (73%) were more likely to use an accountant. And in terms of trying to cut the time it takes to get the business ready for EOFY, 38% stated they would not be doing anything, while the main methodology used was to employ an accountant (26%).


SPECIAL TOPIC: TAXATION REFORM

Operators agreed that in order for Australia to remain competitive, company tax rates should be reduced, but operators were divided in terms of the fairness of the tax system In the April 2016 Business Monitor survey on which this report is based, Australian small and medium business owners and managers (herein known as ‘operators’) were asked to explore the issue of company taxation rates. Sixty percent of operators agreed that company tax rates should be reduced in order for Australia to remain competitive. Support for tax reform was consistent across business size, industry and location. However, when asked to rate how fair the tax system was, operators were slightly more likely to state the tax system was fair (37%) than unfair (32%). Operators less likely to rate the taxation system as fair included:

- Regional businesses (28% compared to 39% of metropolitan based businesses) - Baby Boomers (27%) - Established businesses (25%) - Construction and trades businesses (23%)

Reducing taxation was more likely to result in operators investing more in their businesses When asked what they would most likely do if the Government reduced company tax rates, 57% of operators stated they were more likely to invest the extra funds in the business to increase its financial strength and give it more capability to weather future challenges. In addition 43% stated they would invest more money in expanding and growing the business.

What would this business do if company tax rates were reduced

(n=1008) %

Retain the extra funds in this business to increase its financial strength and be more able to weather future challenges

57%

Invest more money in expanding and growing this business

43%

Return more money from the business to shareholders/ owners

19%

Not applicable - we do not pay tax 7%

4% 6% 27% 34% 26% 3%

Strongly disagree Disagree Neither agree nor disagree Agree Strongly agree Don’t know

6% 26% 31% 25% 8% 4%

Very unfair Unfair Neutral Fair Very fair Don't know


Operators more likely to expand and grow the business included:

- Medium (64%) and small businesses (59%) - Operators who had experienced a revenue increase in the previous 12 months (60%) - Franchisors (58%) - Western Australian operators (57%) - Importers (55%) and exporters (53%) - Gen Y (54%) and Gen X operators (51%) - Retail and hospitality businesses (53%)

Reducing the company tax rate would have more effect on business growth than simplifying the GST Operators were asked how likely potential changes in taxation would result in the business owner investing more in the business. While around half of the opertors suggested any of the changes would allow the business owner to invest more in the business, lowering the company tax rate was seen as more advantageous with 55% likely to invest more in the business. Operators more likely to support the changes in the taxation system included:

- Small businesses, particularly compared to sole operators - Gen X and Gen Y operators - Operators who had experienced a revenue increase in the

preceding 12 months

4%

4%

4%

12%

9%

10%

33%

27%

28%

37%

39%

36%

8%

15%

13%

7%

5%

8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

SIMPLIFYING THE GST/BAS

LOWERING THE COMPANY TAX RATE

LOWERING PAYROLL TAX

Extremely unlikely Somewhat unlikely Neither likely nor unlikely

Somewhat likely Extremely likely Don't know/ Not applicable


Simplification of taxation regulation highest on operators’ agendas Operators were also asked which areas of Government regulation they would like simplified. Overwhelmingly, taxation reform was highest on their list with 52% rating this issue as the area they would most like to see simplified. Operators more likely to rate taxation in need of simplification included finance and insurance businesses (71%) and Gen X operators (59%).

Under half of operators intended to take up the instant tax write off this financial year Under half of the operators (44%) intended to take up the instant tax write off this financial year, with 30% having already purchased an asset and 14% intending to purchase an asset. Small businesses particularly were more likely to have already purchased an asset (46%), as were operators who had experienced a revenue increase in the previous 12 months (38%). Only 6% of operators were unaware of the incentive, but 24% overall had no intention of taking up the incentive.

Areas of Government regulation operators would most like to see simplified

(n=1008) %

Taxation 52%

Work, health and safety 12%

Employment 11%

Licensing 10%

Planning and zoning 8%

Don’t know 6%

30% 14% 24% 15% 11% 6%

Purchased assets Not purchased but intend to

Not purchased and don't intend to Not purchased and unsure if they will

Don't know Not aware of measure


SPECIAL TOPIC: INNOVATION

Only 5% of operators invested a set amount or proportion in innovation While over one quarter of operators (29%) did not invest in innovation, 59% were investing in this area. Only 5% of operators invested a set amount or proportion, but 25% at least tried to invest in innovation, although the amount was dependent on the funds available. Small (73%) and medium businesses (78%) were more likely to be investing in innovation. Operators less likely to invest in innovation included:

- Business, professional & property services (37% did not invest) - Established businesses (36%) - Baby Boomers (34%) - Sole operators (34%)

One quarter of operators were likely to invest more in their business if the company tax rate was cut

Only a quarter of operators (25%) stated they would invest more in innovation if the company tax rate was cut, with 39% stating a cut was not at all or only somewhat likely to result in increased investment in innovation. Operators more likely to invest in innovation if the company tax rate was cut included:

- Franchisors (45%) and franchisees (43%) - Exporters and importers (42% each) - Operators who had experienced a revenue increase in the preceding 12 months (38%) - Gen Y (37%) and Gen X operators (33%) - New South Wales operators (33%) - Establishing businesses (33%, particularly compared to established businesses (14%) - Metropolitan based businesses (30%)

Investment approach to innovation (n=1008) %

The business does not invest in innovation 29%

We only invest in innovation when there is enough money to cover operating expenses and taxes

29%

We try always to invest in innovation but the amount depends based on the funds available

25%

There is always a set dollar amount or proportion of revenue put aside for innovation

5%

Don't know 11%

19% 20% 25% 16% 9% 10%

Not at all likely Somewhat likely Quite likely Very likely Extremely likely Don’t know


GOVERNMENT

Dissatisfaction with Federal Government increased again The level of dissatisfaction with the Federal Government increased this wave from 26% in October last year to 32% this wave returning to previous levels of dissatisfaction since February 2014. Higher dissatisfaction was noted by Baby Boomers (37% compared to 22% of Gen Y operators) and small businesses (45% compared to 29% of sole operators). Transport, postal and warehousing businesses were also more dissatisfied (47%).

State Government dissatisfaction levels also increased Dissatisfaction with the level of support from State Government also increased this wave from 30% to 38%. Dissatisfaction levels were highest amongst Baby Boomers (48% compared to 27% of Gen Y operators), small businesses (60% compared to 34% of sole operators), South Australian (58%) and Queensland operators (48%) compared to 27% of New South Wales operators.

39%

31%

38%

48%

56%52%

57%54%

49%

32%37%

33%

26%32%

21%

29%

21%

14% 14%11%

17%14% 16%

24% 23%27%

30%

20%

JUL 09 NOV 09 MAR 10 OCT 10 SEPT 11 FEB 12 MAY 12 FEB 13 AUG 13 FEB 14 AUG 14 FEB 15 OCT 15 APR-16

Perceptions of Federal Government support of small business

Total dissatisfied Total satisfied

14%19% 17%

12%18%

14% 15% 16% 17%

25% 23%27% 29% 28%

23%

46%43% 46%

53%46%

50% 51% 49%43% 40%

36% 33% 34%30%

38%

JUL 09 NOV 09MAR 10 OCT 10 MAR 11SEPT 11 FEB 12 MAY 12 FEB 13 AUG 13 FEB 14 AUG 14 FEB 15 OCT 15 APR 16

Perceptions of State Government support for SMEs

Total satisfied Total dissatisfied


The instant tax write off and simplification of BAS were viewed favourably by operators While this survey was conducted prior to the Federal Budget, three key policies recommended within the budget emerged as significant positives for operators: keeping the instant tax write-off of assets under $20k, simplifying the GST and reducing the company tax rate. At the other end of the scale, introduction of paid parental leave for all businesses with a revenue over $5m was more likely to cause operators to vote against the party proposing it (31%), as was the removal of the threshold at which GST is collected on goods purchased from abroad (21%). Gen Y operators were less likely to vote for almost all the nominated policies, with the exception of the introduction of a paid parental leave levy on all businesses over $5m revenue, which they were much more likely to support (42% compared to only 14% of Baby Boomers).

Policies or initiatives that business operators would vote for/against For Against

Keeping the $20,000 instant asset tax write-off for businesses under $2m revenue 68% 9%

Policies that significantly simplify the GST/BAS reporting process 65% 10%

Reducing the company tax rate from 30% to 28.5% 61% 13%

Assigning a proportion of Government procurement contracts to small businesses 58% 10%

The establishment of an incentive bonus for businesses employing people over age 50 57% 10%

More Federal Government investment in transport infrastructure in our major States and cities 57% 11%

Increased Federal Government funding for skills, training and apprenticeship programs 54% 11%

Offering a wage subsidy for employing young Australians 53% 10%

Increased Government funding for innovation, research and development by Australian businesses 52% 11%

Exempting FBT on the purchase of work-related portable electronic devices 50% 12%

Remove the threshold at which GST is collected on goods purchased from abroad 38% 21%

Introducing a paid parental leave levy for all businesses with revenue over $5m 24% 31%


About the study

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 1,008 business owners, managers and directors (operators), conducted from March 21 – April 13, 2016. 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).

This research report was prepared by Gundabluey Research and fieldwork was completed by Colmar Brunton (a Millward Brown Company) for Sarah Beyrath, Public Relations & Corporate Affairs Manager – Australia, MYOB Australia ([email protected] | http://myob.com.au

Industry Weighting No.

Agribusiness*2 9% 34

Construction & trades 17% 129

Finance & insurance*2 8% 39

Manufacturing & wholesale 8% 64

Professional & business services 27% 312

Retail & hospitality 11% 150

Transport & warehousing*1 6% 44

Other industries**2 (incl. in total results) 14% 236

TOTAL 100% 1008

Location Weighting No. New South Wales 33% 318

Victoria 26% 277

Queensland 20% 217

South Australia 7% 77

Western Australia 10% 83

Other 4% 40

TOTAL 100% 1008

1 Caveat: There is high margin of error of +/-15% @ 50% on these small bases 2 Other Industries, which have been combined to minimise their margin of error, include these sectors: Communication Services; Cultural & Recreational Services;

The generations were categorised as follows:

Generation Y: 18 – 34 years of age

Generation X: 35 – 49 years of age

Baby boomers: 50 – 69 years of age

Traditionalists: 70+ years of age

Length of time in business was categorised as per the following:

Start up: in business fewer than 2 years

Establishing: 2 to 5 years

Maturing: 5 to 10 years

Established: 10+ years

Education; Electricity, Gas & Water Supply Services; Health & Community Services; Mining; and Personal & Other Services

Number of employees/business type Weighting No. 0 employees/sole traders 61% 615 1-5 employees/micro business 24% 244 6-19 employees/small business 11% 110 20-199 employees/medium business*2 4% 39

TOTAL 100% 1008

mailto:[email protected]

http://myob.com.au/

myob business monitor · 2020-03-29 · in the april 2016 business monitor survey on which this...

Documents