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MYOB’s Five Year Business Monitor Report shows the Australian economy is a two-speed economy, with a few large businesses enjoying most of the benefits of economic growth, says MYOB CEO Tim Reed.
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Two-speed economy hitting SMEs, says MYOB
17 November 2014
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8 minute read
Despite this, Mr Reed the SME sector is showing strong determination and resilience.
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“This survey actually shows it may be more accurate to characterise the Australian economy as a ‘two-sized’ economy, with the majority of enterprises working extremely hard to increase revenue, while a small – and declining – number of larger businesses enjoy most of the benefits of economic growth,” Mr Reed said.
“But although the past five years have often been challenging what we are really seeing here is the true spirit of Aussie business: determined, resilient and resourceful.”
The survey shows that despite a relatively flat period of revenue growth for the nation’s SME sector, the number of businesses in Australia has grown 1.4 per cent to 1.9 million.
Despite having confidence in their revenue performance, business operators have reported increasing pressure on their operations over the last five years.
The survey highlighted a number of leading pressures like fuel prices, cash flow, price margins and the timing of customer payments, which have all risen significantly over the last half-decade. Only interest rates, which are currently at historically low levels, have reduced as a pressure over the period.
Investment priorities have also remained stable over the past five years, although as businesses have become more constrained by lower revenue growth, the emphasis on each has reduced.
The key areas of increased investment for SME operators over the last five years are customer retention strategies, customer acquisition strategies and the number or variety of products or services offered by the business.
“Local SMEs have demonstrated a strong customer focus over the last five years, as operators are fully aware how hard-won each new customer is,” said Mr Reed.
“The issue though has been funding that increased investment as revenue expectations reduce and pressures increase,” Mr Reed said.
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