MYOB BUSINESS MONITOR€¦ · Just over a quarter of Australian business operators expected the economy to improve over the next 12 months In the November 2016 Business Monitor survey

MYOB BUSINESS MONITOR:

THE VOICE OF AUSTRALIAN BUSINESS OWNERS & MANAGERS

December 2016 report

Business Monitor

MYOB Business Monitor December 2016 Page 2 © 2016 MYOB Limited, all rights reserved. Copyright strictly enforced.

BUSINESS PERFORMANCE

Just over a quarter of Australian business operators expected the

economy to improve over the next 12 months In the November 2016 Business Monitor survey on which this report is based, 26% of Australian small and medium business owners and managers (herein known as ‘operators’) expected the Australian economy to improve over the next 12 months. Almost two in five operators (39%) expected the economy to decline, while 33% expected the economy to remain about the same. 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)

Queensland operators (34%)

Business conditions remained steady although trend is positive

Operators reported similar levels of revenue performance over the previous 12 months as the four prior surveys. While wave-on-wave differences were not significant, the trend over this time indicates some improvement with those stating revenue had increased up from 21% in August 2014 to 27% this wave. Under one third (30%) reported a decrease in annual revenue, while a further 41% said revenue had been steady and 2% were unsure. New South Wales operators were more likely to report a revenue increase (33% compared to only 15% of Western Australian operators). Other operators more likely to report a revenue increase in the last 12 months included start-ups (42%) and establishing businesses (35%), rural operators (37% compared to 23% of regional operators), microbusinesses (34%), businesses with a website (32%) and users of cloud computing (30%).

19%22% 22%

26% 26%

19% 20% 18% 18% 18%22% 21% 23% 22%

25% 27%

39% 39%36% 34% 34%

38% 38%41% 39% 39%

34%31% 30% 30% 31% 30%

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 NOV 16

Changes in revenue - previous 12 months

Revenue up Revenue down

7%

32%

33%

24%

2%2%

Decline significantly

Decline slightly

Remain the same

Improve slightly

Improve significantly

Don’t know

Business Monitor


Expected revenue over the next 12 months remained steady, but sales in the pipeline for the next three months showed an

increase to similar levels as the same time last year

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 statistically unchanged from the previous wave at 34%. Just over one in five operators (21%) expected a decline in revenue over the next 12 months. Start-ups (59%), franchisors (47%), Gen Y operators (42%), micro businesses (42%), exporters (42%) and importers (41%) were more likely to expect their revenue to increase over the next 12 months, as were cloud computing users (39%) and operators with a social media site (44%) or business website (41%). 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 December to February quarter. The proportion of operators stating they had more in their pipeline has returned to similar levels as the same time last year (39% compared to 38%) and recovering the decline noted mid-year. Fewer than one in five operators (19%) felt they had less in the pipeline compared to 24% 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 (67%)

Franchisees (61%) and franchisors (57%)

Gen Y operators (56%)

Start-ups (54%) and establishing businesses (47%)

Importers (50%) and exporters (48%)

Operators with a social media site (50%) or business website (47%)

New South Wales operators (48% compared to 22% of Western Australian operators)

37% 37%28% 33%

29% 31% 29% 30% 28% 33%36% 36% 38%

34%39%

29%

21% 26%24%

30%

28% 27%

28% 27% 21% 23%20% 19%

24%19%

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

34%

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

24% 22%19%

22% 22%18%

22% 27%24%

21%

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 NOV 16

Expected changes in revenue - next 12 months

Revenue up Revenue down

Business Monitor


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 26% 34% 39%

New South Wales 24% 38% 48%

Victoria 22% 29% 37%

Queensland 34% 35% 35%

South Australia 18% 25% 38%

Western Australia 26% 37% 22%

Metro 30% 36% 41%

Regional/Suburban 24% 32% 38%

Rural 22% 35% 38%

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

27% 31% 28% 23% 30% 21% 17%

% expecting increase in revenue in next 12 months

39% 30% 35% 44% 43% 37% 24%

% reporting more in pipeline for next 3 months

39% 35% 40% 38% 41% 46% 35%


Business Monitor


Investment intentions show emphasis on margins, customer

retention, product proliferation and online sales

In this wave, there were four areas of business in which operators were most likely to increase their focus/investment in the next 12 months:

Prices and margins on products/services sold (30%)

Number or variety of products or services offered (28%)

Customer retention (28%)

Sales of products and services online (26%) Key changes noted from the previous wave were:

Investment in prices and margins on products and services increased from 24% last wave to 30% this wave

Investment in customer retention strategies increased from 24% last wave to 28% this wave

Investment in sales of products and services online increased from 22% last wave to 26% this wave

Investment in the number of part time or casual employees increased from 14% last wave to 18% this wave

Key differences

Key differences were noted across several areas, including age and size of the business. As seen in the tables overleaf, Gen Y operators, retail and hospitality, manufacturing and wholesale, small businesses, start-ups and establishing businesses were more likely to increase focus/investment in the next 12 months across a number of areas. Baby Boomers, established businesses, construction and trades and transport, postal and warehousing businesses were much less likely to be investing. In addition, New South Wales based operators (particularly compared to Queensland operators), operators with a website or social media site, small business operators whose revenue was up in the preceding 12 months, importers and exporters, franchisors and franchisees and cloud computing users were all much more likely to be increasing their investment across a range of issues.

12%

17%

18%

21%

18%

20%

21%

23%

29%

22%

27%

26%

26%

14%

19%

18%

21%

20%

22%

23%

25%

25%

21%

27%

26%

28%

12%

14%

18%

20%

17%

19%

20%

23%

22%

22%

24%

25%

24%

14%

18%

18%

19%

20%

22%

22%

23%

24%

26%

28%

28%

30%

Number of full time employees

Number of part time or casualemployees

The $ value of offline marketing andadvertising

Investment in IT systems & processes

Working with business advisers toenhance your business

Sales of products/services offline

The $ value of online marketing andadvertising

Amount you pay the employees

Focus on customer acquisitionstrategies

Sales of products/services online

Focus on customer retention strategies

Number or variety of products orservices offered

Your prices and margins onproduct/services sold

Where businesses plan to increase investment

Nov 16 Apr 16 Oct 15 Feb 15

Business Monitor


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-

lists

Prices/margin on products/

services 30% 37% 30% 24% 28% 38% 26% 28% 36%

No. or variety of products offered 28% 41% 35% 26% 20% 35% 30% 26% 14%

Customer retention strategies 28% 37% 38% 25% 17% 37% 31% 23% 14%

Sale of products/services online 26% 37% 31% 23% 19% 37% 27% 22% 12%

Customer acquisition strategies 24% 39% 29% 25% 13% 34% 28% 20% 10%

Amount employees are paid 23% 26% 23% 18% 17% 31% 26% 20% 13%

Sale of products/services offline 22% 33% 27% 18% 16% 34% 21% 18% 14%

Value of online marketing 22% 28% 25% 18% 15% 30% 23% 18% 10%

Working with business advisors 20% 29% 24% 20% 10% 41% 17% 13% 9%

Investment in IT

systems/processes 19% 18% 27% 15% 13% 32% 22% 13% 11%

Value of offline marketing 18% 26% 22% 17% 9% 32% 19% 12% 9%

No. of part time/casual staff 18% 22% 26% 13% 6% 35% 20% 11% 0%

No. of full time employees 14% 16% 21% 8% 5% 32% 19% 6% 4%


Business Monitor


Planned increase in focus/investment by industry type

Agribusiness

Business, prof.

& property

services

Construction &

trades

Finance &

insurance

Manufacturing &

wholesale

Retail &

hospitality

Transport, postal &

warehousing

Prices/margin on products/services 28% 27% 29% 30% 34% 34% 18%

No. or variety of products offered 25% 28% 19% 30% 39% 46% 13%

Customer retention strategies 22% 30% 22% 25% 29% 36% 16%

Sale of products/services online

23% 26% 20% 22% 34% 36% 19%

Customer acquisition strategies 11% 27% 18% 20% 33% 31% 14%

Amount employees are paid

20% 23% 25% 16% 36% 25% 16%

Sale of products/services offline

25% 22% 15% 12% 42% 32% 10%

Value of online marketing 16% 22% 17% 14% 28% 32% 10%

Working with business advisors 24% 20% 14% 24% 22% 26% 10%

Investment in IT systems/ processes 14% 21% 16% 24% 25% 23% 9%

Value of offline marketing

12% 18% 14% 10% 21% 30% 10%

No. of part time/casual staff 23% 15% 16% 10% 27% 23% 13%

No. of full time employees

8% 15% 14% 8% 24% 17% 10%


Business Monitor


Attracting new customers, cashflow, late payments and

competitive activity were key pressures 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, attracting new customers emerged as the top business pressure, followed by cashflow and late payments from customers. The area of late payments from customers was reworded this wave from customer payment timing to more accurately reflect the issue being measured, and while the change was significant, is most likely due to this changed wording than an increase in the problem. The pressure of interest rates declined this wave after a jump in the previous wave. Key differences for the major pressures are detailed below.

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

Western Australian operators (45%)

Small businesses (44%)

Operators who reported a revenue fall in the previous 12 months (43%)

Retail and hospitality businesses (36%)

Operators with a website (35%) or social media site (33%)

Gen X operators (33%)

Females (32%)

Cash flow Cash flow was a greater pressure for:

• Western Australian operators (42%) • Franchisors (39%) • Operators who reported a revenue fall in the previous 12 months (38%) • Gen Y operators (36%) • Small businesses (35%) • Operators with a social media site (35%) or website (30%) • Exporters (34%) and importers (33%) • Females (31%)

18%

14%

16%

21%

19%

21%

22%

24%

28%

24%

29%

22%

30%

32%

14%

11%

13%

14%

16%

15%

19%

19%

21%

23%

23%

17%

22%

24%

15%

13%

12%

18%

16%

23%

17%

19%

23%

25%

25%

19%

26%

24%

12%

13%

15%

15%

16%

17%

20%

20%

23%

23%

25%

26%

26%

27%

0% 10% 20% 30% 40%

Exchange rates

Upgrading IT software, systems or processes

Upgrading hardware or other equipment

Access to finance/funding/overdraft

Cost of online technologies

Interest rates

Retain existing customers

Time spent meeting tax obligations

Profitability & price margins

Fuel prices

Competitive activity

Late payments from customers (wascustomer payment timing)

Cashflow

Attract new customers

Pressure Points (% extreme/lot)

Nov 16 Apr 16 Oct 15 Feb 15

Business Monitor


Late payments from customers Late payments from customers was a greater pressure for:

• Western Australian operators (41%) • Construction and trades businesses (39%) • Operators who reported a revenue fall in the previous 12 months

(36%)

• Gen X operators (32%) • Regional based operators (29%)

Competitive activity Competitive activity was a greater pressure for:





Importers (32%)

Operators with a social media site (32%) or website (31%)

Fuel prices Fuel prices were a greater pressure for:

• Transport, postal & warehousing (43%) and agribusinesses (42%) • Rural businesses (37%) • Operators who reported a revenue fall in the previous 12 months

(31%)

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



Operators with a website (28%)

Time spent meeting your tax compliance obligations Time spent meeting tax obligations was a greater pressure for:



Businesses with a social media site (24%) or a website (23%)

Retaining existing customers Retaining existing customers was a greater pressure for:


Franchisors (33%)



Exporters (28%)

Businesses with a website (25%)


Pressure points by industry are shown in the table on the following page.

Business Monitor


Pressure points by industry

Agribusiness

Business, prof.

& property

services

Construction &

trades

Finance &

insurance

Manufacturing

& wholesale

Retail &

hospitality

Transport, postal &

warehousing

Attracting new customers 20% 30% 25% 26% 34% 36% 25%

Cash flow 21% 25% 32% 18% 30% 32% 32%

Late payments from customers

28% 27% 39% 12% 34% 19% 21%

Competitive activity 12% 23% 26% 26% 28% 40% 32%

Fuel prices 42% 19% 25% 10% 30% 23% 43%

Price margins & profitability

16% 23% 24% 23% 32% 29% 25%

Time spent meeting your tax obligations 16% 20% 22% 25% 19% 21% 11%

Retaining existing customers

14% 21% 21% 16% 23% 28% 22%

Interest rates 16% 17% 21% 18% 20% 21% 10%

Online technology costs 17% 18% 16% 12% 17% 20% 15%

Access to finance/ funding/overdraft

19% 18% 14% 8% 15% 21% 10%

Updating hardware or other equipment

15% 15% 18% 8% 17% 18% 18%

Updating IT software, systems or processes

10% 15% 11% 8% 17% 20% 5%

Exchange rates 23% 10% 5% 6% 30% 20% 5%


Business Monitor


ONLINE ACTIVITY & THE DIGITAL ECONOMY

Almost one third of operators using online accounting and bookkeeping solutions While almost three-quarters of operators (71%) were using email and 66% were using online banking, almost one-third (32%) were using an online solution for their accounting and bookkeeping. A further 28% of operators were accepting instant payments, while 27% were using an online document sharing platform such as Dropbox. The table on the following page details the usage of these online tools by industry. Key differences were as follows:

Retail and hospitality operators were much more likely to be using social media (44%), accept instant payments (44%), online payroll (29%), online sales platforms (25%) and staff rostering and work allocation (18%)

Construction and trades businesses were much more likely to be using email (78%)

Business, professional and property services operators were also more likely to be using document sharing (35%) and external communications tools (21%)

Transport, postal and warehousing businesses were much more likely to state that they had Internet access but did not do or were not interested in any of the activities (18%)

Online activities Nov 16

E-mail 71%

Use online banking 66%

Accounting / Bookkeeping 32%

Accepting instant payments eg (EFTPOS, ApplePay, PayPal, a shopping cart or mobile app etc)

28%

Document sharing e.g. Dropbox, Google Drive 27%

Connect with customers using social media 24%

Saving file backups to the cloud 21%

Payroll (employee payments, leave entitlements, PAYE etc.) 20%

Customer Relationship Management (sales, marketing, support and feedback etc.) 18%

External communications (online tools for conference calls etc.) e.g. WebEx, Go To Meeting, Skype

15%

Modify your website to improve online search results or purchase online advertising or key words (SEO and SEM)

14%

Sales platform 13%

Staff rostering and work allocation 9%

Internal communication (online tools for employees to communicate e.g. Yammer, Lync, Campfire, Hipchat)

8%

Enterprise Resource Planning (tracking business resources such as cash, materials, production capacity etc.)

5%

Have internet access but do not do any / not interested in any of above activities 8%



Tools by industry type

Agribusiness

Business, prof.

& property

services

Construction

& trades

Finance &

insurance

Manufacturing

& wholesale

Retail &

hospitality

Transport,

postal &

warehousing

E-mail 65% 73% 78% 80% 74% 71% 51%

Use online banking 64% 65% 70% 76% 70% 69% 51%

Accounting / Bookkeeping 32% 27% 35% 32% 38% 40% 30%

Accepting instant payments eg EFTPOS, ApplePay, PayPal, a shopping cart or mobile app etc

18% 28% 28% 21% 36% 44% 21%

Document sharing e.g. Dropbox, Google Drive 15% 35% 22% 34% 30% 25% 13%

Connect with customers using social media 21% 24% 18% 20% 29% 44% 8%

Saving file backups to the cloud 17% 23% 22% 28% 21% 19% 10%

Payroll (employee payments, leave entitlements, PAYE etc.)

24% 17% 20% 14% 23% 29% 10%

Customer Relationship Management (sales, marketing, support and feedback etc.)

6% 22% 11% 29% 23% 25% 10%

External communications (online tools for conference calls etc.) e.g. WebEx, Go To Meeting, Skype

4% 21% 11% 24% 17% 12% 1%

Modify your website to improve online search results or purchase online advertising or key words (SEO and SEM)

6% 17% 8% 8% 20% 20% 14%

Sales platform 8% 11% 9% 11% 21% 25% 10%

Staff rostering and work allocation 4% 9% 11% 6% 9% 18% 5%

Internal communication (online tools for employees to communicate e.g. Yammer, Lync, Campfire, Hipchat)

4% 9% 7% 8% 10% 11% 4%

Enterprise Resource Planning (tracking business resources such as cash, materials, production capacity etc.)

0% 7% 6% 2% 5% 9% 3%

Have internet access but do not do any / not interested in any of above activities

16% 4% 7% 2% 6% 8% 18%


Some of the other key differences noted are detailed below:

Gen Y and Gen X operators were much less likely to use online banking (48% and 61% respectively) and Gen Y were also less likely to use email (54%) compared to their Baby Boomer counterparts (76% and 79% respectively). Traditionalists were also much more likely to use email (90%).

Operators more likely to connect with customers via social media included: operators with a social media (51%) or website (34%), retail and hospitality businesses (44%), start-ups (37%), Gen Y operators (31%), users of cloud computing (30%) and females (29%).

Micro businesses were much more likely to be using email (79%), online banking (73%) and online accounting and bookkeeping (39%), while small businesses were much more likely to be using SEO and SEM (22%), online sales platforms (23%) and online staff rostering and work allocation (19%).

Almost half Australian operators now have a website

Almost half (48%) of operators had a website this wave, up from 43% the previous wave. The proportion of operators without any online presence however, remained constant at 36%. Gen Y (75%) and Gen X operators (66%) were much more likely to have an online presence, while Traditionalists (29%) and Baby Boomers (53%) were less likely to have an online presence. As well as older operators, other operators more likely to be laggards, included:

Agribusinesses (57%), transport, postal & warehousing businesses (51%) and construction and trades businesses (47%) had no online presence

Rural businesses (51%)

Non-users of cloud computing (51%)

Established businesses (50%)

Sole operators (42%)

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

39%47%

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

48%

20%27% 31%

26% 29% 29% 32%

61%51% 57% 59%

62%60% 59%

50%

43% 41% 41% 41% 37%36%

Mar10

Oct10

Mar11

Sept11

Feb12

May12

Feb13

Aug13

Feb14

Aug14

Feb15

Oct15

Apr16

Nov16

Proportion of Australian businesses with an online presence

Website Social media site No online presence


Key differences by industry, operator age and size of business are shown below.

Total Gen Y Gen X Baby Boomers

Traditionalists

Sole operator

s

Micro Small Medium

Do not have an online presence 36% 18% 30% 44% 66% 42% 33% 12% 3%

Only have a business website 27% 31% 28% 27% 20% 24% 30% 37% 47%

Only have a social media site for business

11% 15% 10% 11% 4% 13% 8% 8% 15%

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

21% 28% 29% 16% 4% 15% 27% 39% 33%

Don’t know 4% 7% 4% 3% 5% 5% 3% 4% 3%


Agribusiness

Business, prof.

& property

services

Construction

& trades

Finance &

insurance

Manufacturing

& wholesale

Retail &

hospitality

Transport, postal &

warehousing

Do not have an online presence 57% 34% 47% 44% 22% 19% 51%

Only have a business website

19% 26% 32% 27% 38% 26% 24%

Only have a social media site for business

14% 9% 11% 4% 9% 15% 8%

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

6% 25% 7% 24% 26% 35% 13%

Don’t know 4% 6% 4% - 5% 5% 3%



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 below, having a business website was perceived to have resulted in more customer leads and enquiries (46%) and enabled a more professional brand image (44%). Having a social media site provided different benefits, particularly allowing more interactions with customers (49%), as well as generating more customer enquiries or leads (43%). The appeal that both a social media site and a website offered younger customers rose this wave.

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

In terms of having a business website, females were much more likely to state it generated more customer leads and enquiries (54% compared to 41% of males), enabled their business to have a more professional brand image (51% compared to 40% of males), increased revenue or income in general (35% compared to 24% of males) and increased appeal to younger employees (18% compared to 10% of males). Gen Y operators were more likely to say the website had improved their appeal to younger customers (33%) and younger employees (23%). Retail and hospitality businesses felt a website increased their appeal to younger customers (34%) and felt a social media site also increased their appeal to younger customers (46%) and increased their revenue and income in general (38%).

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

Oct 2015 (n=423)

April 2016 (n=459)

Nov 2016 (n=496)

Oct 2015 (n=318)

April 2016 (n=329)

Nov 2016 (n=331)

Generated more customer enquiries or leads in general 44% 45% 46% 30% 40% 43%

Enabled your business to have a more professional brand image

38% 41% 44% 24% 30% 33%

Made it easier for customers to do business with you 39% 34% 40% 24% 33% 33%

Allowed more interaction with customers 33% 34% 35% 42% 45% 49%

Enabled you to compete better with your competitors 26% 27% 28% 20% 27% 31%

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

Enabled access to more markets 19% 24% 26% 18% 27% 26%

Allowed you to sell online to customers 23% 20% 23% 12% 20% 22%

Increased your appeal to younger customers 20% 17% 23% 26% 25% 33%

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

13% 16% 16% 11% 17% 15%

Increased your appeal to younger employees 12% 10% 13% 15% 19% 21%

Has not benefitted my business 9% 9% 10% 15% 11% 12%


Pace of technology perceived as about right for Australian

operators

Three in five operators (60%) found the pace of technology innovation to be ‘about right’, while the proportion stating it was too slow declined this wave from 24% to 16%. Traditionalists (51%) and Baby Boomers (23%) were more likely to state the pace of technology was too fast, while finance and insurance operators were more likely to be finding the pace of technology too slow (28%).

Online security concerns declined this wave

Just over a quarter (29%) of operators had no online security issues compared to 23% in the previous wave. Hackers gaining access to their data remained the biggest issue of concern for operators (39%), followed by losing access to (35%) and control over (30%) their data. Operators more concerned about online security concerns included:

Franchisors (only 5% stated they were not concerned about online security) and franchisees (14%)


Importers (15%) and exporters (18%)


Businesses whose revenue was down in the preceding 12 months (23%)

Users of cloud computing (23%)

Operators with a website (23%)

Metropolitan based businesses (25%)

Online security concerns Oct 2015 (n=1024)

April 2016 (n=1008)

Nov 2016 (n=1003)

Hackers gaining access to your business data 34% 42% 39%

Losing access to your data 29% 38% 35%

Losing control of your data 25% 33% 30%

Competitor access to your business data 13% 15% 14%

Access to your data by local government 13% 15% 14%

Access to your data by foreign governments 12% 14% 11%

Do not have any concerns about online

security 33% 23% 29%

Don’t know 6% 7% 6%


20% 17% 20%

57% 57% 60%

19% 24% 16%4% 3% 3%

Oct 15 Apr 16 Nov 16

Speed of Technology Change

Don’t know

Too slow – more investment is needed in this area

About right for my needs

Too fast – I struggle to keep up


Satisfaction levels with Internet cost decline

While dissatisfaction levels remained constant for both Internet speed and cost (27% and 25% respectively), the proportion of operators expressing satisfaction with Internet cost has declined this wave from 47% to 42%. Satisfaction and dissatisfaction levels with Internet speed were consistent across all demographics, however in terms of Internet cost, regional operators were more dissatisfied (28% compared to only 20% of metropolitan based operators).

26% 28%24% 25%

29%27%

48% 47% 49%

49% 46%

46%

26% 26% 23% 21%27% 25%

44% 45% 48%

52%47%

42%

FEB-14 AUG-14 FEB 15 OCT 15 APR 16 NOV 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 experienced some pain points with regard to employing staff, particularly

small businesses

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

The process of hiring new staff The pressure of end of year paperwork declined this wave as that time of year had passed (down from 27% to 20% this wave), as did the pressure for more flexible work hours (down from 21% to 16% this wave). Operators more likely to experience pain points employing staff included:

Small businesses (only 14% stated they had no pain points, while 47% mentioned the ability to find new staff as a pain point and 35% mentioned the process of hiring new staff as a pain point)

Establishing businesses (14% stated they had no pain points).


New South Wales operators (18%)

Pain points in employing staff Oct 2015

(n=483)

April 2016

(n=468)

Nov 2016

(n=480)

The ability to find new staff 27% 39% 33%

Dealing with payroll compliance – e.g. student loans, parental leave, child support payments

21% 29% 29%

Ability to dismiss employees 19% 29% 25%

The process of hiring new staff 19% 23% 21%

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

10% 18% 21%

End of year paperwork e.g. payment summaries 16% 27% 20%

Demand for flexible working hours 17% 21% 16%

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

35% 23% 26%



One in five businesses having difficulty keeping and attracting staff to full time positions, while 29% were offering more contract and part time options While around one in five businesses were struggling to keep and attract new employees, a similar proportion were also not offering part time and contract positions for new and existing staff. Businesses more likely to be offering more contract and part time work for new and existing staff included:


Establishing businesses (37%)

Metropolitan based operators (33%)

Businesses more likely to be struggling to attract and keep staff were as follows:

Small businesses (41% were struggling with keeping staff)

Gen Y operators (38% were struggling with attracting new staff while 30% were struggling to keep existing staff)

Retail and hospitality businesses (33% were struggling with attracting new staff)

Establishing businesses (29% were struggling with attracting new staff)

Metropolitan based operators (26% were struggling with attracting new staff)

New South Wales operators (25% were struggling with attracting new staff)

5%

4%

5%

24%

15%

20%

38%

39%

42%

19%

26%

19%

2%

3%

2%

12%

13%

13%

We are losing staff because they want more flexibilitythan we can offer

We are offering more contract and part time workoptions for new and existing staff

We find it difficult to attract new employees into fulltime positions

Impact of Flexibility on Staffing

Strongly disagree Disagree Neither agree nor disagree Agree Strongly agree Not applicable


SPECIAL TOPIC: BUSINESS ASPIRATIONS

Australian business owners started their business to control their own destiny

Australian business owners were asked two special questions this wave regarding why they started their business and what their long-term goals were for the business. Control, passion, flexibility and lifestyle change were the four main themes to emerge as shown in the table opposite. Operators’ desire to control their own destiny and being passionate both increased this wave in terms of reasons for starting a business. Key differences were as follows:

Gen X business owners were more likely to mention they wanted to spend more time with their family (25%), or that they could make money from a hobby or interest (20%)

Traditionalists were more likely to mention they had reached retirement age and wanted to keep working (35%).

Males were more likely to want to control their own destiny (49% compared to 38% of females).

Microbusinesses were also more likely to want to control their own destiny (55% compared to 42% of sole operators).

Construction and trades operators were also more likely to want to control their own destiny (54%).

Reasons for starting the business Business owners

Oct 2015 (n=766)

Nov 2016 (n=809)

I went into business to control my own destiny 39% 45%

I started my own business because I am passionate about what I do 29% 34%

I needed flexibility in a role to do what I want, when I want 32% 32%

I wanted a total lifestyle change from what I was doing 27% 29%

I went into business so I can spend more time with my family 13% 17%

I started it as an investment strategy to make more money for the future

11% 15%

I thought that I could make money from a hobby or an interest 12% 13%

I had reached retirement age but wanted to continue working 6% 7%

The business is our family business and I had to take it over 9% 6%

I was offered a partnership opportunity by someone else 7% 6%

Significant increase since last wave


Australian business owners’ long term goals for the business focused on flexibility rather than growth In terms of the long term goals for their business, more than one quarter (26%) of business owners nominated flexibility, allowing them to make money but also spend time with the family and take holidays. Only one in five (19%) nominated growth as their key goal, while 16% felt it was more about a passion for what they did.

Gen X business owners were more likely to mention making some money from working on something they were passionate about (23%), while Traditionalists (43%) and Baby Boomers (20%) were more likely to mention semi-retirement.

Start-ups were more likely to mention wanting to grow the business (37%) along with Construction and trades operators (28%).

Long term goals for the business Business owners

Oct 2015 (n=766)

Nov 2016 (n=809)

I want to make some money and give myself flexibility at the same time, to spend time with the family, to take holidays etc

28% 26%

I want to grow my business and make a good profit and income for myself 19% 19%

I want to make money from what I love doing. It’s more about working on things I am passionate about

16% 16%

I want to make some money, but it is more a semi-retirement 14% 15%

I want to build a successful business that I can sell for a good profit 8% 7%

I want it to be a family business I leave to my children 5% 5%

I want to sell the business and do something else 4% 5%


SPECIAL TOPIC: SHARING ECONOMY

The ‘Sharing Economy’ was seen to have little impact on operators to date Almost three quarters of operators (73%) stated they had seen no impact from the sharing economy on their business, with 18% stating the impact to date had been positive and 7% stating it had been negative. Operators more likely to state the impact of the sharing economy had been positive included:

- Franchisors (71%) and franchisees (41%) - Gen Y operators (40% compared to 9% of Baby Boomers) - Importers (40%) and exporters (39%) - Metropolitan based operators (27% compared to 14% of regional and 7% of rural based

operators) - Sole operators (21% compared to 9% of micro businesses)

Almost a third of operators have participated in the sharing economy Almost one third of operators (31%) had used the services of an Uber driver or rented a place on Air BNB or similar, while 14% had supplemented their own income by being a provider of services in the sharing economy. Gen Y operators were much more likely to have used (51%) or provided services (31%) as part of the sharing economy, particularly compared to Baby Boomers and Traditionalists.

1%4%

73%

11%

7%4%

Impact of Sharing Economy

Very negative Some negative impact

No impact Some positive impact

Very positive impact Don’t know

14%

31%

Supplemented your income by renting your home viaAir BNB, working as an Uber driver or similar

Used the services of an Uber driver or rented a placeon Air BNB or similar

Participation in sharing economy


GOVERNMENT

One third of operators dissatisfied with Federal

Government’s support of small business The level of dissatisfaction with the Federal Government remained steady this wave at 33%. Higher dissatisfaction was noted by Baby Boomers (40% compared to 18% of Gen Y operators), micro (40%) and small businesses (41%) compared to 29% of sole operators and Western Australian operators (46%). Agribusinesses were also more dissatisfied (47%).

Two in five operators dissatisfied with State

Government support of small business Dissatisfaction with the level of support from State Government also remained steady this wave at 40%. Dissatisfaction levels were highest amongst Baby Boomers (50% compared to 18% of Gen Y operators), micro businesses (48% compared to 37% of sole operators), Western Australian (50%) and Queensland operators (51% compared to 29% of New South Wales operators).

39%

31%38%

48%

56%52%

57% 54%49%

32%37%

33%26%

32% 33%

21%29%

21%14% 14% 11%

17% 14% 16%

24% 23%27% 30%

20% 22%

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 NOV 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%

40%46%

43% 46%53%

46%50% 51% 49%

43% 40%36% 33% 34%

30%

38%

21%

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 NOV 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

Keeping the instant tax write-off of assets under $20k and simplifying the GST reporting process gained the most support from operators (68% and 66% respectively). 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 (34%), 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 (37% compared to only 9% of Traditionalists and 20% of Baby Boomers).

Reducing taxes for businesses with under $10m revenue

received higher support Operators were more in favour of reducing taxes for businesses with under $10m revenue (47%) rather than reducing tax rates for all businesses (34%). However, the majority of businesses surveys also had revenue below $10m. Established businesses were more likely to prefer reducing tax rates for businesses under $10m only (53%).

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% 8%

Policies that significantly simplify the GST/BAS reporting process 66% 8%

Assigning a proportion of Government procurement contracts to small businesses

61% 8%

Reducing the company tax rate from 30% to 28.5% 60% 12%

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

59% 8%

Increased Federal Government funding for skills, training and apprenticeship programs

57% 8%

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

56% 9%

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

55% 10%

Offering a wage subsidy for employing young Australians 51% 12%

Exempting FBT on the purchase of work-related portable electronic devices 49% 11%

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

41% 21%

Introducing a paid parental leave levy for all businesses with revenue over $5m 27% 34%

47%

34%

4%

11%

4%

Reduce taxes forbusinesses under

$10m

Reduce tax ratesfor all businesses

Other No preference Don't know

Support for tax options


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 1,003 business owners, managers and directors (operators), conducted from October 28 – November 22, 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% 42

Construction & trades 18% 150

Finance & insurance*2 9% 41

Manufacturing & wholesale 7% 50

Professional & business services 26% 202

Retail & hospitality 9% 79

Transport & warehousing*1 7% 58

Other industries**2 (incl. in total results) 15% 187

TOTAL 100% 1003

Location Weighting No.

New South Wales 33% 258

Victoria 25% 211

Queensland 21% 173

South Australia 7% 55

Western Australia 11% 94

Other 4% 18

TOTAL 100% 1003

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 67% 541

1-5 employees/micro business 27% 218

6-19 employees/small business 6% 46

20-199 employees/medium business*2 1% 4

TOTAL 100% 1003

mailto:[email protected]

http://myob.com.au/

Documents

MYOB BUSINESS MONITOR€¦ · Just over a quarter of Australian business operators expected the economy to improve over the next 12 months In the November 2016 Business Monitor survey