Start-ups worked fewer hours for better financial rewards last year and are more confident about this year’s revenue performance compared to established SMEs, according to MYOB.
The MYOB Business Monitor report found in the year to February 2013 more than one third (36 per cent) of start-up businesses saw stronger revenue gains, compared to 18 per cent of all SMEs. Start-ups were significantly less likely to report a fall in revenue, with 27 per cent seeing this compared to 39 per cent of SMEs overall. The same report showed 28 per cent of start-ups said they had steady revenue, compared to 40 per cent, and 8 per cent who were unsure.
“Starting a business is one of the most challenging – and rewarding – milestones an individual can reach for. To help new business owners succeed, it’s important we understand the challenges they face and apply greater focus to making it easier to start and build a business. It’s just as important that we celebrate the success of start-ups and other small businesses,” MYOB business division general manager James Scollay said.
The reason also found start-up business owners and managers had far more confident expectations around financial performance for 2013 than their more established counterparts with 42 per cent expecting revenue to increase, compared to 30 per cent of SMEs on average. They were also less likely to predict a fall, with just 17 per cent forecasting this, while an average of 19 per cent of SMEs expected this.
Start-up business operators believe their biggest challenge over the year is attracting new customers as 73 per cent reported this as a pressure for their operation, with 38 per cent expecting this pressure to be ‘quite a lot’ (29 per cent) or ‘extreme’ (9 per cent).
Cash flow is also another challenged faced by start-ups with 71 per cent reporting this as a pressure and 34 per cent expecting it to place quite a lot of (25 per cent) or extreme (9 per cent) pressure on
Polly Green, co-founder of successful start-up Green Ant Toys Online Toys Store, said while the initial challenge was the hardest – creating a business from just an idea – the hard work has paid off.
“There are daily challenges in designing and implementing a concrete business model, plan, and operating systems. The establishment phase involves so many decisions, including website design and implementation, selection and fitting out of business premises, sourcing of stock, warehouse setup, as well as inventory, accounting and business systems implementation.
“One of the most challenging aspects of starting a new business has been creating consumer awareness and establishing a customer base. As a new online business, gaining a presence, consumer trust and customers is both expensive and time consuming. We have trialled a variety of online and offline marketing methods as well as cultivating social media networks to gain new customers and retain them.
“Also challenging in starting a small business is the need to effectively allocate time, and problem solve across all aspects of the business, from sales and marketing to stock receiving, web site updating, customer service, information technology, accounting and financial management, and business systems.
“Coming from a corporate accounting background, starting a business has been the hardest thing I’ve done throughout my career. There are no IT, Sales and Marketing, Stores, or Logistics Departments to rely on, but it has been hugely satisfying to start with an idea and watch a business grow.”