myob nz business monitor national report - september 2013 · following 12 months, up from 18% in...

September 2013

MYOB Business Monitor September 2013

© 2013 MYOB Limited, all rights reserved. Copyright strictly enforced.

22% 22%26% 25% 28% 30%

34%31% 32%

30%

35% 36% 35%38%

32% 31%

29% 30%27% 24%

Jun 09 Nov 09 Mar 10 Oct 10 Mar 11 Sept 11 Feb 12 May 12 Feb 13 Aug 13

Changes in revenue - previous 12 months

Revenue up Revenue down

ECONOMIC PERFORMANCE

Business conditions steady but positive

In the August 2013 MYOB Business Monitor survey, on which this

report is based, New Zealand small and medium business owners

and managers (herein known as ‘operators’ or ‘SMEs’) recorded

similar levels of annual revenue performance as in the prior two

surveys. These surveys, of more than 1,000 SMEs each time, are

conducted twice a year.

30% reported a revenue increase in the 12 months to August

2013 and almost one quarter (24%) reported a decline. The

proportion of businesses stating their revenue was down in the

preceding 12 months declined from 30% in May 2012 - a

statistically significant trend.

As the table below shows, Christchurch SMEs were much more likely to report an increase in annual revenue (41%), while rural based businesses continued to lag.

March 2011 September 2011 March 2012 May 2012 February 2013 August 2013

Total New Zealand 36% 30% 34% 31% 32% 30%

Auckland 39% 30% 34% 35% 32% 31%

Wellington 37% 27% 31% 40% 33% 29%

Christchurch Not asked 29% 40% 28% 45% 41%

Rest of NZ 33% 31% 32% 26% 27% 27%

City/Metro 36% 30% 37% 29% 38% 32%

Regional/Town 38% 27% 30% 33% 30% 33%

Rural 30% 35% 35% 27% 24% 22%

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



37%

55%49%

37%23% 25% 21% 18%

24% 28%


% expecting economic improvement within 12 months

34%44% 45% 42%

36%41% 42%

36%41% 43%

16%10% 10% 12% 13% 13% 12% 14% 12% 10%


Expected changes in revenue - next 12 months

Revenue up Revenue down

Rising expectations of near-term economic and business improvement

Operators’ expectations of the economy improving in the short-term

rose again this survey, reinforcing the positive result noted in February.

Over one quarter (28%) expected an economic improvement over the

following 12 months, up from 18% in May 2012 and 24% in February

2013.

This optimism was reflected in the proportion of operators expecting

their annual revenue to rise (43%). An increase on May 2012 (36%), this

is also a statistically significant trend. The proportion expecting their

revenue to remain steady over the following 12 months was similar

(41%).

36% reported more sales/work than usual in their pipeline for the

following three months and, again, the trend since May 2012 (where

30% stated this was the case) is significant. This trend corresponds with

an underlying decline in the proportion of operators who had noted less

sales/work than usual in their pipeline (down from 22% in May 2012 to

17% this wave).

As shown in the tables on the following page, operators in Christchurch

were the most positive about an economic recovery and a rise in

revenue. Industry-wise, manufacturing and wholesale operators were

more positive than other sectors in terms of an annual revenue increase

and having more sales/work than usual in their pipeline.

In addition, businesses with a website or a social media site (44% and

47% respectively) were more likely to have more in the pipeline than

businesses without any online presence (32%).

24%29% 29%

26%

31% 33% 33%30%

33%36%

26% 26%23%

32%

21% 21% 23% 22%19% 17%


Sales/work in the pipeline - next 3 months

Total more Total less



Expectations by location

% expecting economic improvement

within 12 months

% expecting increase in revenue in

next 12 months

% reporting more in pipeline for

next 3 months

Total NZ 28% 43% 36%

Northland 23% 41% 31%

Auckland 30% 44% 40%

Waikato 26% 47% 38%

Bay of Plenty 18% 35% 31%

Gisborne/Hawkes Bay 33% 39% 20%

Taranaki 34% 50% 19%

Manawatu-Wanganui 25% 37% 30%

Wellington 22% 34% 35%

Christchurch 37% 55% 42%

Otago & Southland 27% 41% 39%

Expectations by industry type

Agribusiness

Business, prof. &

property services

Construction

& trades

Finance &

insurance

Manufacturing &

wholesale

Retail &

hospitality

Transport, postal &

warehousing

% expecting economic

improvement within 12 months 23% 31% 30% 30% 25% 28% 25%

% expecting increase in

revenue in next 12 months 37% 42% 44% 35% 59% 48% 31%

% reporting more in pipeline

for next 3 months 27% 31% 42% 29% 51% 41% 46%




Investment intentions show emphasis on customer base

The focus over the next 12 months for New Zealand businesses in this latest

wave of research remained on customer retention strategies, with 36%

planning to invest more in this. While half (50%) planned to keep their spend on

this steady, only 1% planned to decrease it and 12% were unsure.

While customer retention remained the top priority, customer acquisition

strategies were clearly the second priority at 31%.

The next three issues were seen as being of similar priority (25 – 26% of

business operators planned to invest):

� The number and variety of products and services offered

� Prices and margins

� The dollar value of online marketing

Compared to the February 2013 survey, more operators were planning to:

� Increase spend on online marketing activities (25% compared to 17%)

� Increase spend on offline marketing activities (19% compared to 14%)

� Employ more casual staff (16% compared to 11%).

This expansionary approach to business was the opposite of what was noted in

the Australian research where the proportion of operators planning to invest in

a number of areas declined since the last wave.

11%

17%

17%

19%

20%

22%

25%

27%

23%

27%

31%

35%

11%

14%

19%

16%

21%

22%

22%

19%

23%

29%

27%

28%

38%

9%

17%

13%

16%

20%

17%

20%

21%

22%

24%

25%

29%

39%

8%

11%

16%

14%

18%

20%

20%

20%

17%

24%

25%

33%

36%

10%

16%

16%

19%

19%

20%

21%

22%

25%

25%

26%

31%

36%

The number of full time employees in

your business

The number of part time or casual

employees in your business

Working with business advisers (eg

accountant) to enhance your business

The $ value of spending on marketing

and advertising offline

The amount you pay the employees in

your business

Investment in IT systems & processes

The sale of products /services online

The sales of products /services offline

The $ value of spending on online

marketing/advertising

Your prices and margins on

products/services sold

The number or variety of products or

services offered by your business

Focus on customer acquisition strategies

Focus on customer retention strategies

Where businesses plan to increase investment

Aug 13 Feb 13 May 12 Feb 12 Sept 11



Key differences

Across almost all areas, those more likely to be increasing investments included:

• Gen X operators, particularly compared to Traditionalists

• Small to medium sized businesses

• Businesses with a website or social media site (or both)

• Businesses whose revenue was up in the previous 12 months

• Start up businesses

• Manufacturing & wholesale and retail & hospitality businesses

• Importers

• Businesses that plan to borrow money in the next 12 months

Differences by age of business and size of business, as well as industry differences are shown on the tables overleaf. Location differences have not been shown in

detail due to a very consistent investment pattern.



Planned increase in focus/investment by age of business and size of business

Total Start ups Establishing Maturing Established Sole

operators

Micro Small Medium

Customer retention strategies 36% 46% 35% 39% 30% 32% 40% 57% 62%

Customer acquisition strategies 31% 43% 33% 33% 21% 28% 31% 47% 46%

Working with business advisors 16% 27% 16% 18% 10% 13% 22% 28% 5%

No. or variety of products offered 26% 38% 36% 30% 15% 23% 30% 42% 25%

Prices/margin on products/services 25% 27% 29% 29% 19% 23% 30% 25% 40%

Value of online marketing 25% 38% 24% 23% 20% 23% 27% 34% 33%

Sale of products/services offline 22% 38% 25% 20% 14% 18% 28% 32% 48%

Sale of products/services online 21% 28% 20% 20% 17% 20% 21% 27% 35%

Investment in IT systems/processes 20% 31% 19% 16% 19% 18% 21% 32% 43%

Amount employees are paid 19% 18% 17% 17% 16% 11% 32% 41% 51%

Value of offline marketing 19% 33% 18% 12% 16% 18% 19% 20% 25%

No. of part time/casual staff 16% 17% 24% 11% 13% 14% 17% 30% 30%

No. of full time employees 10% 10% 9% 8% 7% 5% 11% 38% 48%




Planned increase in focus/investment by industry type

Agribusiness

Business, prof. &

property services

Construction

& trades

Finance &

insurance

Manufacturing

& wholesale

Retail &

hospitality

Transport, postal

& warehousing

Customer retention strategies 19% 33% 26% 57% 51% 60% 50%

Customer acquisition strategies 9% 35% 27% 37% 34% 48% 33%

Working with business advisors 15% 14% 19% 25% 16% 20% 9%

No. or variety of products offered 14% 19% 24% 27% 52% 45% 22%

Prices/margin on products/services 30% 18% 37% 11% 38% 25% 24%

Value of online marketing 11% 28% 17% 36% 30% 36% 15%

Sale of products/services offline 16% 18% 20% 21% 47% 32% 18%

Sale of products/services online 14% 19% 10% 21% 42% 41% 15%

Investment in IT systems/processes 13% 23% 16% 20% 31% 21% 12%

Amount employees are paid 16% 16% 26% 11% 30% 23% 5%

Value of offline marketing 10% 22% 9% 30% 20% 26% 13%

No. of part time/casual staff 7% 18% 16% 15% 21% 20% 15%

No. of full time employees 10% 7% 18% 5% 18% 13% 5%




Full time employment intentions remain static

Planned increase in focus/investment in full time employees in particular has

remained static for the last five waves (between 8% - 11%), and the reasons for

this were explored in this latest survey.

Operators not intending to take on full time employees over the next 12

months were asked why they were not considering increasing staff levels. The

main reasons were:

• They were happy with the current staffing levels (46%)

• They didn’t have enough funds to employ any more people (25%)

• Cash flow was unstable (20%)

The table opposite details the results.

Rural businesses were more likely to nominate not having enough money in

the business to put on new staff (41%), as did businesses whose revenue was

down in the last 12 months (39%), maturing businesses (37%), agribusinesses (38%) and Waikato based businesses (44%).

Cashflow was more of an issue for retail and hospitality businesses (33%), while manufacturing and wholesale businesses were more likely to mention that their

employees were not currently working at full capacity (28%).

Why businesses have not invested in full-time staff (n=632)

Happy with the current number of staff in the business 46%

Not enough money in the business to put on staff 25%

Cashflow is too uncertain/insufficient to put on more staff 20%

Not seeing any growth in customer demand for my products/

services 15%

Don't want to grow the business 14%

I/my employees are not working at full capacity now 13%

Lack of confidence in current business/sales being maintained 8%

Not sure how to make the decision to put on new staff 2%

Other (please specify) 9%

Don't know 1%



15%

19%

23%

19%

22%

27%

24%

28%

42%

13%

14%

17%

15%

18%

21%

17%

25%

26%

23%

23%

24%

35%

13%

16%

17%

22%

18%

23%

20%

21%

29%

23%

27%

27%

35%

14%

14%

17%

21%

18%

20%

18%

19%

26%

27%

25%

25%

36%

11%

15%

15%

16%

17%

20%

17%

17%

24%

23%

27%

24%

27%

11%

13%

15%

16%

16%

17%

20%

22%

23%

24%

26%

27%

35%

Managing bad debt

Marketing and customer relationships

Exchange rates

Timing of customer payments

Business finance/funding/overdraft

Meeting your tax obligations

Retaining existing customers

Interest rates

Price margins & profitability

Competitive activity

Cashflow

Attracting new customers

Fuel prices

Pressure points (% extreme/quite a lot)

Aug 13 Feb 13 May 12 Feb 12 Sept 11 Mar 11

Fuel prices still top business pressure

When operators were asked what elements of the business environment they

expected to cause an extreme amount or quite a lot of pressure on their business in

the next 12 months, the same top five issues emerged. Fuel prices was again the

topmost pressure, bouncing back from 27% last wave to 35% this wave.

The next four pressures were weighted similarly and their magnitude remained

constant with the last wave, though their order changed. These were:

� Attracting new customers (27%)

� Cashflow (26%)

� Competitive activity (24%), and

� Price margins and profitability (23%)

Interest rates (22%) emerged as the sixth most critical pressure and has gained

momentum since the last survey, increasing from 17% in March 2013. The pressure

of other issues remained constant since the last wave.

Fuel prices

Fuel prices were a greater pressure for:

• Northland businesses (61%)

• Agribusiness (58%) & transport and postal & warehousing businesses (57%)

• Businesses whose revenue was down in the preceding 12 months (51%)

• Rural businesses (49%)

Attracting new customers

Attracting new customers was a greater pressure for:

• Franchisees (46%)

• Businesses with a social media site (40%), website (37%) and both (43%)

• Retail and hospitality businesses (36%)

• Metropolitan based businesses (34%)



Cash flow

Cash flow was a greater pressure for:

• Northland businesses (42%)

• Businesses who reported a revenue fall in the previous 12 months (41%)

• Businesses planning to borrow money in the next 12 months (41%)

• Businesses with both a social media site and website (40%) and just a social medial site (35%)

• Gen Y (37%) and Gen X operators (32%), particularly compared to Traditionalists (10%)

• Micro (34%) and small businesses (40%)

Competitive activity

Competitive activity was a greater pressure for:



• Small (39%) and medium sized businesses (50%)

• Businesses with a website (36%), social media site (38%) or both (46%)

• Hawkes Bay businesses (36%)

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

Price margins and/or profitability

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

• Small (46%) and medium sized businesses (43%)

• Businesses who reported a revenue fall in the preceding 12 months (35%)

• Retail & hospitality (37%) and manufacturing & wholesale businesses (36%)

• Importers (33%)



Pressure points by industry

Agribusiness

Business, prof. &

property services

Construction &

trades

Finance &

insurance

Manufacturing

& wholesale

Retail &

hospitality

Transport, postal

& warehousing

Fuel prices 58% 26% 44% 13% 36% 29% 57%

Attracting new customers 14% 31% 21% 27% 32% 36% 18%

Cashflow 35% 20% 27% 26% 28% 33% 24%

Competitive activity 13% 24% 25% 23% 30% 40% 22%

Price margins & profitability 25% 14% 26% 24% 36% 37% 40%

Interest rates 31% 22% 17% 40% 24% 23% 17%

Retaining existing customers 9% 21% 11% 24% 30% 25% 23%

Meeting your tax obligations 19% 13% 25% 15% 17% 24% 22%

Business finance/funding/

overdraft 25% 10% 22% 14% 19% 22% 10%

Timing of customer payments 15% 16% 26% 4% 25% 14% 3%

Exchange rates 41% 7% 5% 4% 24% 19% 12%

Marketing & customer

relationships 3% 11% 9% 14% 18% 23% 6%

Managing bad debt 12% 9% 20% 0% 21% 10% 8%




CLOUD COMPUTING & DIGITAL ECONOMY

Cloud computing take-up still low, but rising slowly

This survey, 18% of operators stated they were using cloud computing in their business

(compared to 16% in March 2013 and 14% in May 2012). Those more likely to be using

cloud computing included:

• Gen X operators (23%) compared to 7% of Traditionalists

• Small businesses (28%)

• Metropolitan based businesses (24%)

• Businesses with a website (28%), social media site (30%) and both (39%)

• Businesses whose revenue was up in the preceding 12 months (26%)


Operators who used cloud computing were asked to define how it had benefitted their

business. As can be seen in the table opposite, the most frequently nominated benefit

was the greater ability to embrace working remotely/at a location other than the

business premises (55%).

How cloud technology has benefitted the

business

(n=216)

Greater ability to embrace working remotely/at a location

other than the business premises

55%

Allowed us to stay up to date with software & technology 34%

Reduced time spent on IT issues 30%

Reduced IT costs 29%

Allowed access to more technology 29%

Increased security of business data 28%

Improved customer service 28%

Ability to collaborate in the cloud with clients/suppliers 27%

Increased productivity 19%

Reduced travel costs 19%

Ability to collaborate in the cloud with my business adviser 18%

Increased the business product/service innovation 15%

No benefit obtained 6%



50%

24%

9%14%

3%

Do not have an

online presence

Only have a

business

website

Only have a

social media site

for business

Have both a

business

website and a

social media site

for business

Don't know

% of business with an online presence

Half of New Zealand businesses have no online presence

This wave, operators were asked about their online presence in terms of

having their own business website and their own business-focused social

media site. As can be seen in the chart opposite, half of New Zealand SMEs do

not have an online presence.

In previous waves, operators were only asked whether they had a website.

The chart opposite (bottom) shows that the proportion of businesses with a

website has begun to increase, with 38% of businesses now having a website.

Gen Y and Gen X were much more likely to have their own online presence

(59% and 54% respectively), while Traditionalists (70%) much more likely to

have no online presence at all.

Businesses larger than micro, ie. small to medium businesses, were also more

likely to have their own online presence (80% and 77% respectively), as were

franchisees (80%), importers (70%), retail and hospitality (70%) and

manufacturing and wholesale businesses (62%), businesses using cloud

computing (68%), metropolitan based businesses (57%) and businesses whose

revenue was up in the last 12 months (56%),

Key industry differences with business website or business-focussed social

media site ownership are shown in the table on the following page. Operators

in retail and hospitality (70%) and manufacturing and wholesale businesses

(62%) were much more likely to have an online presence, particularly

compared to construction and trades (32%) and agribusinesses (16%).

Please note: the question about having a social media site was only introduced in August 13

27%

35%32% 32% 32%

35% 34%38%

23%

Mar 10 Nov 10 Mar 11 Sept 11 Feb 12 May 12 Feb 13 Aug 13

% of businesses with a website/social media site

Website Social media site



Agribusiness

Business, prof. &

property services

Construction

& trades

Finance &

insurance

Manufacturing

& wholesale

Retail &

hospitality

Transport, postal &

warehousing

Do not have an online presence 83% 47% 64% 39% 35% 28% 52%

Only have a business website 5% 23% 19% 52% 37% 28% 24%

Only have a social media site for

business

8% 10% 6% 0% 8% 11% 7%

Have both a business website & a

social media site for business

3% 15% 7% 9% 17% 32% 4%

Don’t know 1% 5% 4% 0% 3% 2% 13%


Total Gen Y Gen X Baby

Boomers

Traditionalists Sole

operators

Micro Small Medium

Do not have an online presence 50% 41% 42% 51% 68% 56% 45% 19% 17%

Only have a business website 24% 28% 26% 24% 19% 21% 27% 36% 52%

Only have a social media site for

business

9% 8% 11% 8% 8% 9% 10% 5% 0%

Have both a business website & a social

media site for business

14% 23% 18% 13% 3% 10% 17% 39% 26%

Don’t know 3% 0% 4% 4% 2% 4% 2% 1% 5%




Businesses with an online presence were asked which of a number of business

changes had occurred as a result.

As can be seen in the table opposite, the biggest benefit of having a business

website was more customer leads and enquiries (61% nominated this benefit),

while the biggest benefit of a social media site was more interactions with

customers (60% nominated this).

Retail and hospitality businesses were more likely to nominate increased

revenue or income (58%), the ability to compete better (50%) and the

opportunity to enter new business locations (27%) as a result of having a

business website. In terms of having a social media site, this group was also

more likely to nominate more interaction with customers (78%) and increased

revenue or income (36%).

Operators without a website were asked to nominate the main reason

why not. The main reason was they did not see any value (35%).

Operators that only had a social media site were more likely to

nominate the following as their reasons for not having a website:

• It is not a priority, as they have enough work (32%)

• Haven’t got around to it yet (31%)

• Prefer to use social media tools instead (29%)

• Can’t afford to establish and run a business website (18%)

• Don’t see any value in having a business website (18%)

Impact of online presence Result of having a

business website

(n=416)

Result of having a

social media site

(n=262)

More customer enquiries or leads 61% 54%

More interaction with customers 42% 60%

The ability to compete better with

competitors 34% 30%

Increased revenue or income 28% 21%

Better customer lead conversions to

sales 28% 26%

The opportunity to enter new

business locations 16% 20%

Other (Please specify) 5% 3%

None of the above 15% 20%

Reasons for not having a business website (n=598)

We don’t see any value in having a business website 35%

It’s not a priority right now, we have all the work we can handle 23%

We prefer to advertise & market our business using other methods 13%

We just haven’t got around to it yet 12%

Our business presently can’t afford to establish & run a business website 9%

We prefer to use social media tools instead (eg Facebook, Twitter, Google +) 6%

We wouldn’t know where to start in setting up a business website 5%

We have several other business priorities or projects to undertake first 4%

Other (Please specify) 11%

None of the above 10%



Online technologies popular

Operators were also asked about the online business tools they used. Over half

(53%) reported using one or more smartphones in the business, and almost one

third (30%) used tablets. Usage was similar across all industries except

agribusiness and transport, postal & warehousing businesses, which were much

less likely to utilise these technologies.

Almost half the businesses (49%) were accepting online payments from

customers via internet banking, a shopping cart or mobile app, while 44% were

buying products and services online. While over a third (37%) of New Zealand

businesses were using some form of social media, LinkedIn (24%) and Facebook

(16%) were still well ahead of other social media sites in popularity, compared

to 4% each for Google+ and Twitter and 3% for YouTube.

Marketing tools were also popular, with 25% of operators stating they were

using Internet search engines to promote their business and 19% of operators

conducting email marketing.

As highlighted in the tables following, retail and hospitality businesses in general

were more likely to use online tools, particularly compared to agribusiness and

transport, postal & warehousing businesses. Construction & trades businesses

were much more likely to accept online payments (64%).

Other operators most likely to use online tools included:

• Businesses with a website (96%), social media site (95%) and both (98%)

• Importers (95%)

• Businesses using cloud computing (95%)

Online tools being used by businesses (n = 1,045)

TECHNOLOGY

Use one or more smartphones 53%

Use one or more tablets (eg. iPad) 30%

INTERNET/EMAIL MARKETING

Use internet search engines to promote business 25%

Conduct email marketing to customers 19%

BUYING/SELLING ONLINE

Accept online payment from customers via internet banking, a

shopping cart or mobile app

49%

Buy products/services online 44%

Sell products/services online directly to customers using your

own website

17%

Sell products /services online (eg eBay, Trading Post, Trade Me) 15%

SOCIAL MEDIA (net) 37%

Network with business colleagues &/or clients on LinkedIn 24%

Connect with customers & fans via a business page on Facebook 16%

Share news & updates via a company blog 8%

Connect with customers & fans via a business page on Google+ 4%

Communicate via micro-blogging sites such as Twitter 4%

Connect with customers & fans via a business page on YouTube 3%

OTHER

Use Skype or VOIP to make free business phone calls 20%

Have internet access but do not do/not interested in above

activities

14%



Tools by industry type

Agribusiness

Business, prof.

& property

services

Construction

& trades

Finance &

insurance

Manufacturing

& wholesale

Retail &

hospitality

Transport, postal &

warehousing

Use one or more smartphones 41% 57% 56% 58% 59% 51% 30%

Use one or more tablets (eg. iPad) 25% 31% 28% 53% 26% 31% 12%

Buy products/services online 59% 39% 50% 34% 55% 45% 15%

Use internet search engines to promote bus. 16% 27% 15% 35% 38% 41% 0%

Conduct email marketing to customers 6% 24% 9% 23% 18% 40% 0%

Network with business colleagues &/or clients

on LinkedIn 8% 37% 8% 29% 23% 16% 0%

Communicate via micro-blogging sites eg

Twitter 1% 5% 1% 5% 2% 10% 0%

Share news & updates via a company blog 0% 12% 6% 5% 3% 11% 0%

Use Skype or VOIP to make free business phone

calls over the internet 11% 23% 13% 22% 28% 22% 4%

Accept online payment via internet banking, a

shopping cart or mobile app 46% 49% 64% 37% 50% 52% 25%

Connect with customers & fans via a business

page on Facebook 8% 13% 6% 9% 28% 40% 3%


page on YouTube 2% 3% 1% 5% 2% 8% 0%


page on Google+ 1% 4% 1% 5% 6% 11% 4%

Sell products/services online directly to

customers using your own website 7% 16% 5% 26% 33% 37% 3%

Sell products /services online (eg e-Bay) 12% 18% 5% 5% 22% 28% 13%

Have internet access but do not do any / not

interested in any of above activities 18% 13% 8% 6% 9% 10% 42%




Tools by online presence, cloud

computing

Has a

website

Does not

have a

website

Has a Social

media site

Does not

have a Social

media site

Has both a

website &

Social media

site

Use cloud

computing

Do not use

cloud

computing

Use one or more smartphones 68% 44% 72% 48% 77% 78% 49%

Use one or more tablets (eg. iPad) 36% 26% 40% 27% 41% 53% 26%

Buy products/services online 47% 43% 52% 42% 49% 49% 44%

Use internet search engines to promote bus. 45% 13% 52% 18% 63% 43% 22%

Conduct email marketing to customers 34% 10% 38% 13% 49% 38% 15%

Network with business colleagues &/or clients

on LinkedIn 37% 16% 43% 18% 54% 45% 20%

Communicate via micro-blogging sites eg

Twitter 7% 2% 12% 1% 17% 12% 2%

Share news & updates via a company blog 16% 3% 18% 5% 27% 18% 6%

Use Skype or VOIP to make free business phone

calls over the internet 31% 13% 34% 16% 37% 42% 16%

Accept online payment via internet banking, a

shopping cart or mobile app 53% 47% 58% 47% 60% 59% 48%


page on Facebook 28% 9% 58% 3% 64% 31% 13%


page on YouTube 7% 1% 8% 1% 12% 10% 2%


page on Google+ 7% 3% 11% 2% 12% 9% 4%

Sell products/services online directly to

customers using your own website 42% 2% 34% 13% 50% 31% 15%

Sell products /services online (eg e-Bay) 22% 11% 24% 13% 27% 25% 13%

Have internet access but do not do any / not

interested in any of above activities 4% 20% 5% 17% 2% 5% 15%




While it could be expected that Traditionalists were less likely to be using the majority of online tools than their Gen X and Gen Y counterparts, they were in fact

more likely to accept payments online (61% nominated this option). Gen Y operators were more likely to use a variety of social media tools, although use of

Twitter and company blogs amongst this generation was not significantly different from their older counterparts.

Online payment & social media usage by generation Gen Y

(18 – 29 years)

Gen X

(30 – 49 years)

Baby Boomers

(50 – 64 years)

Traditionalists

(65+ years)

Accepting payments via internet banking, a shopping cart or mobile app 40% 46% 49% 61%

Connect with customers & fans via a business page on Facebook 36% 21% 14% 5%

Connect with customers & fans via a business page on YouTube 8% 4% 3% 0%

Connect with customers & fans via a business page on Google+ 9% 7% 3% 2%

Communicate via micro-blogging sites such as Twitter 8% 6% 3% 0%

Share news & updates via a company blog (either via your own website or

Wordpress/Blogger)

10% 9% 8% 4%



WORK-LIFE BALANCE AND REASONS FOR STARTING THE BUSINESS

Majority of New Zealand SME satisfied with work life balance

Almost two thirds of operators surveyed (65%) were satisfied with their

work-life balance (45% quite satisfied; 19% very satisfied). As shown in the

chart opposite, only 16% of operators were currently dissatisfied with

their work-life balance.

Interestingly, only 50% of Australian operators were satisfied with their

work life balance.

Those NZ business categories least likely to be satisfied with their work life

balance included:

• Gen X operators (59%) compared to 84% of Traditionalists

• Businesses whose revenue was down in the last 12 months (56%)

• Maturing businesses (56%)


• Businesses planning to borrow money in the next 12 months (55%)



Business owners were also asked the reason why they initially started their

business. As can be seen from the table opposite, a lifestyle change was the

most frequently mentioned reason (36%), followed by an investment

strategy for the future (22%).

Reasons for starting the business (n=903)

I wanted a total lifestyle change from what I was doing 36%

I started it as an investment strategy for the future 22%

I thought that I could make money from a hobby or an interest 16%

I purchased a business previously established & owned by others 8%

I took a redundancy from my employment & used the payout to start the

business 7%

I was offered a partnership opportunity by someone else 6%

I had reached retirement age but wanted to continue working 6%

I didn't start this business 4%

Some other reason (please specify) 17%

Don't Know 2%

2%

14%

19%

45%

19%

Work-Life Balance

Very dissatisfied

Quite dissatisfied

Neither

Quite satisfied

Very satisfied



BORROWING AND EXIT PLANS

One in six operators (17%) stated they planned to borrow money for their business

over the 12 months to August 2014, and while 10% were unsure whether they

would borrow or not, the majority (74%) did not plan to borrow. Those most likely

to be considering borrowing included:


• Importers (26%) and exporters (24%)

• Businesses with a social media site (22%)

As can be seen from the table, almost two thirds of these finance-seeking operators

planned to use an institutional lender (63%) and a further 28% planned to either

draw on their savings, redraw on their mortgage or take a home equity line of

credit.

Over one in three business owners have an exit plan in place or have valued their business

Over one in three business owners (39%) said they had an exit plan in place for their business. Traditionalists were much more likely to have an exit plan (57%),

compared to 31% of Gen X and 4% of Gen Y business owners. Wellington based businesses (27%), establishing businesses (27%) and businesses with no

accountant relationship (29%) were also less likely to have an exit plan.

A similar proportion of business owners (36%) had established a value for their business. Traditionalists were again more likely to have done this (56%), compared

to 27% of Gen X and 3% of Gen Y business owners. Businesses outside the three main cities were more likely to have valued their business (42%), as had rural

businesses (44%) and established businesses (42% compared to 21% of start ups). Retail and hospitality businesses (55%) and agribusinesses (50%) were much

more likely to have placed a value on their business, especially when compared to construction and trades businesses (17%).

Of those who had established a value of their business, valuations were more likely to have been based on comparative market value (44%), average turnover

(30%) or an independent valuation from an accountant or specialist (29%).

From where borrowers plan to borrow (n=147)

Institutional lender (e.g. bank or other lending institution) 63%

Redraw on mortgage/home equity line of credit 28%

Own savings & investments (e.g. term deposits, managed

funds, super, shares, etc) 28%

Credit card 20%

Other family member/s 6%

Life partner (e.g. husband, wife, de facto, partner, boyfriend,

girlfriend) 5%

Parent/s 4%

Angel investor 3%

Friend/s 2%

Staff 0%



34%31%

38%

17%

34%

29% 30% 29% 28%

Nov 09 Mar 10 Oct 10 Mar 11 Sept 11 Feb 12 May 12 Feb 13 Aug 13

Dissatisfaction with Government support

GOVERNMENT

More than one quarter of operators (28%) expressed dissatisfaction with the

level of government support for businesses such as theirs.

The level of dissatisfaction has remained constant since the February 2012

survey, which was well above the level of dissatisfaction recorded in March

2011.

Dissatisfaction levels were fairly consistent across all the various business

categories. However, the following differences were noted:

• Businesses that reported a revenue fall in the last 12 months were

more dissatisfied (40%)

• Businesses with annual revenue under $75k were more dissatisfied

(35%)

Operators were also asked which political party they trusted most in terms of the appropriate management of the economy. Overwhelmingly, National emerged

as the most trusted party in this area (60%). Labour was a distant second at 10%, while 18% of operators stated they did not trust any of the political parties over

another in terms of management of the economy. Wellington based operators were more likely than others to trust Labour in appropriately managing the

economy (17%).

Operators were also asked about policies that might influence their voting intentions for or against the party promoting them. As can be seen on the table

following, the most popular initiatives were ‘simplification of provisional tax rules and processes’ (74%), ‘simplification of the PAYE rules and processes’ (56%), ‘the

development of one-stop online access to all government advice and support for business’ (55%), ‘introduction of tighter controls on foreign purchases of New

Zealand land and infrastructure’ (54%) and ‘Government backed loans to small business start ups’ (52%).

At the other end of the scale, ‘the introduction of a capital gains tax’ (64%), ‘moves to raise the superannuation entitlement age’ (52%) and ‘the extension of the

fringe benefit tax to productivity tools such as mobile communication devices like mobile phones, tablets and laptops’ (46%) were more likely to cause operators

to vote against the party proposing them.



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

Simplification of provisional tax rules & processes to make it easier for businesses to accurately

determine & meet their tax obligations

74% 1%

Simplification of PAYE rules & processes to make it easier for businesses to accurately pay employees 56% 1%

The development of one-stop online access to all government advice & support for business 55% 2%

Introduction of tighter controls on foreign purchases of New Zealand land & infrastructure 54% 14%

Government backed loans to small business start ups 52% 6%

A proportion of Government procurement contracts being assigned to small businesses 48% 5%

A 'cash accounting' tax system for small businesses 43% 6%

Continuation of the 'Better Public Services for Business' programme 39% 3%

The re-introduction of Research & Development tax credits for businesses 35% 4%

New rules to limit the use of the personal grievance process by employees 35% 16%

The introduction of a single business number 29% 3%

More Government intervention into the value of the NZ$ dollar 25% 26%

Extending employee trial periods from 90 days to 6 months 22% 34%

The extension of the fringe benefit tax to productivity tools such as mobile communication devices like

mobile phones, tablets & laptops

22% 46%

Moves to raise the superannuation entitlement age 18% 52%

Introduction of a Capital Gains Tax 15% 64%

Re-introduction of tax credits

Operators were also asked to define the impact R&D tax credits had made to their business. Only 8% stated there had been any impact at all. Almost half of the

operators stated they had made no difference (43%), while a third (33%) stated they were not applicable to their business. A further 7% stated they did not

understand what R&D tax credits were, while 12% did not know what impact R&D tax credits had made to their business.



Satisfaction with Local Council support

Operators were asked about their level of satisfaction with Local Council

support in terms of helping their business success. As can be seen in the

chart opposite, around half of the operators (52%) were neutral on this

issue, with only 15% being satisfied and almost twice as many (29%) being

dissatisfied.

Wellington based operators were more likely to be satisfied (25% satisfied;

23% dissatisfied), as were Taranaki based operators (32% satisfied; 19%

dissatisfied).

Operators were also asked about what Local Council policies or regulations

impacted on their business. The most frequently nominated polices were

resource consents (37%) and building consents (36%), while a quarter

(26%) stated there were no policies or regulations that impacted on their business.

Agribusinesses were more likely to be impacted by resource consents (63%), environment and

waste (63%), water regulations (48%) and by-laws (34%), while construction and trades

businesses were even more likely to be impacted by building consents (69%) and resource

consents (52%).

Water regulations were considered more of an issue for Otago/Southland and Waikato based

operators (34% and 32% respectively).

Otago and Southland based operators were also more impacted by environment and waste

regulations (45%) and health regulations (27%) than other areas.

Resource consents 37%

Building consents 36%

Environment & waste 30%

Bylaws 23%

Water regulations 18%

Health regulations 16%

Noise control 11%

Food licensing 7%

Street trading regulations 6%

Liquor licensing 4%

Other 4%

None of the above 26%

Don’t know 5%

9%

21%

52%

14%

1% 3%

Satisfaction with Local Council support

Very dissatisfied

Quite dissatisfied

Neither

Quite satisfied

Very satisfied

Don't know



Business dealings with government

This wave, some questions were added to the survey instrument regarding how Government

could assist in improving their services to SMEs.

Operators were asked how Central Government could assist in reducing their business costs.

The most frequently nominated areas included reducing fees for Government services (35%),

having all their dealings with Government in one place (19%) and moving more paper

transactions online (18%). 31% of operators did not think any of the nominated improvements

would assist in reducing their business costs. The table opposite details the results.

Operators were also asked to choose up to three issues they considered important in their

dealings with government. As can be seen in the table below, being knowledgeable (the

information received being accurate, reliable and easy to understand) was nominated by

almost half (47%).

Traditionalists were more likely to rate courtesy as important

(35%) compared to only 15% of Gen X operators, while Wellington

based operators were more likely to consider first time resolution

important (41%). Christchurch based operators were more likely to

rate personal touch important (37%).

(n=1044)

Reducing fees for Government services 35%

Having all of my dealings with Government

available in one place 19%

Moving more paper transactions online 18%

Reducing the time it takes to answer questions I

have 14%

Having support available at a time that suits me 14%

Streamlining transactions (e.g. changing process I

have to go through with two or more agencies into

a single process)

13%


None of these types of services would reduce my

business costs 31%

Don't know 11%

Important aspects of dealing with government (n=1044)

Knowledgeable – The information I get is accurate, reliable & easy to

understand 47%

Simplicity – It is easy to understand what to do 36%

First time resolution – If I have a problem, it is resolved without passing me on

to another area 31%

Availability – I can get support at a time that is convenient to me 28%

Personal – I can talk to the same person each time, on multiple occasions,

regardless of what I am trying to do 27%

Courtesy – The people I deal with treat me professionally & with courtesy 20%

Channel – I can deal with government in the way that suits me best (e.g. online,

mail, on the phone, mobile) 15%


Don't know 12%



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 1,045 business

owners, managers and directors (operators), conducted from August 1 – 20, 2013. 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 Statistics New Zealand (New Zealand

Business Demography Statistics: At February 2010: ISSN 1174-1988.)

This research report was prepared by Gundabluey Research and fieldwork was completed by Colmar Brunton (a Millward Brown Company) for Kristy Sheppard,

Public Relations & Corporate Affairs Manager – New Zealand, MYOB NZ Limited ([email protected] | www.myob.co.nz)

The generations were categorised as follows:

• Generation Y: 18 – 29 years of age

• Generation X: 30 – 49 years of age

• Baby boomers: 50 – 64 years of age

• Traditionalists: 65+ 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

1 Caveat: There is high margin of error of +/-15% @ 20% on this small base

2 Other Industries, which have been combined to minimise their margin of error, include these sectors: Communication Services; Cultural & Recreational Services; Education;

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

Industry Weighting No.

Agribusiness 15% 95

Business, Professional & Property Services 34% 339

Construction & trades 11% 128

Finance & insurance*1

6% 21

Manufacturing & Wholesale 8% 59

Retail & Hospitality 9% 136

Transport & Warehousing*1 3% 30

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

Total 100% 1044

Number of Employees/Business Type Weighting No.

0 Employees/Sole Traders 69% 706

1-4 Employees/Micro Business 21% 222

5-19 Employees/Small Business 7% 83

20-199 Employees/Medium Business 3% 33

Total 100% 1044

Location Weighting No.

Auckland 31% 288

Wellington 10% 130

Canterbury 13% 128

Rest of New Zealand 46% 498

Total 100% 1044

myob nz business monitor national report - september 2013 · following 12 months, up from 18% in...

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