New research released by MYOB shows the economic confidence of small to medium enterprises (SMEs) has not improved over the past few months nor has their revenue.
The July 2012 MYOB Business Monitor found fewer than one fifth (19 per cent) of the 1,004 business owners and managers surveyed nationally expected the domestic economy to improve within 12 months. This is unchanged from the March 2012 report, which revealed the lowest percentage recorded since the March 2009 report (16 per cent).
In the latest study, almost one quarter (24 per cent) believed any improvement was more than two years away, while only 18 per cent reported an increase in revenue in the past 12 months. More than twice that number (41 per cent) said revenue fell, 37 per cent experienced steady revenue and four per cent didn’t know.
“Fewer than one in five small to medium business operators have enjoyed revenue growth in the past year, while more than two in five have seen their revenue fall,” MYOB CEO Tim Reed says. “It is little wonder the vast majority can’t see our economy improving any time soon – two in three believe any improvement is at least one year away.
“The new financial year is an ideal time for business owners to boost their potential for success by seeking smarter, more cost-effective ways of running their business. The $6,500 instant tax write-off for new assets, for example, can assist in the investment of new equipment that improves business productivity and cash flow. Another good way to improve cash flow is by attracting more prospective customers through a website that is included in major search engines.
“With the carbon tax introduction, there are tangible advantages for those who also take a proactive approach to reducing energy and material consumption, and lowering production costs.
“One big surprise was that more than half the business operators we surveyed – 55 per cent – will keep their prices and margins the same this year. In fact, 13 per cent will drop them. With the carbon tax set to impact the cost of goods and services for most if not all, one in two won’t pass that on to customers.
“This indicates that many will simply cop carbon tax related cost increases on the chin. I encourage business owners to consider whether this is the best course of action when they’re planning how to attract and keep customers – frequently, good service rates above price in a customer’s mind. Service can allow a business to put their prices up and customers understand the need for these moves.”