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2012 MYOB Business Monitor:
SME confidence dips to to 2.5 year low

17 Apr 2012

Extreme pressures & significant sacrifices evident, but improved revenue expectations

New research released today by MYOB, Australia’s largest business management solutions provider, found economic confidence has sagged to a two and a half year low amongst small to medium business operators.

The March 2012 MYOB Business Monitor report* found less than one fifth (19%) of the 1,043 small to medium business owners and managers (SMEs) surveyed nationally expected the domestic economy to improve within 12 months. It was the lowest percentage recorded since the March 2009 report found 16% expected the domestic economy to be ‘better than now’ over the next 12 months. In the July 2009 report 45% expected an improvement within 12 months.

The recent finding of 19% is little more than half the 35% uncovered by the March 2011 report and is almost one third of the 54% found in March 2010.

While 20% said their revenue rose in the past year, almost twice that number (38%) said revenue fell, a similar proportion as those with steady revenue (39%). Generation Y* was the generation most likely to experience a positive result, with 29% seeing revenue rise, while business owners over 60 year of age were most likely to experience a fall, at 41%.

Industries hit hardest in reporting revenue losses were Construction and Trades (46%) and Manufacturing and Wholesale (45%). On the flipside, Manufacturing and Wholesale was also the industry most likely to see revenues rise (25%), closely followed by Transport, Postal and Warehousing (24%).

MYOB CEO Tim Reed said, “These results paint a stark picture of the financial and emotional challenge facing small to medium business owners, their families and their staff over the next year. They will need significant support from their networks and the government in order to swim strongly through these challenging times.”

“Given the lack of confidence in Australia’s short-term economic future uncovered by our latest MYOB Business Monitor, it’s unsurprising that we also found the majority of SMEs expected to make no change over the next year to their levels of staffing, salaries, investment in R&D, sales promotions, overseas exports and more.

“Having said that, more than one third intended to increase their focus on customer retention strategies during that time and close to one third intended to increase their attention on customer acquisition strategies.”

One positive finding was the 30% anticipating their business revenue to rise in the next 12 months and 39% expecting theirs should hold steady. However, that still left almost one quarter (24%) predicting a fall in revenue. 7% didn’t know. Generation X led the generations when it came to looking ahead to positive revenue results, at 38%. In terms of industry, Finance and Insurance clearly led the way, with 50% expecting their revenue to rise.

Fuel and finance exerting the most pressure

Business operators are facing a range of cost burdens that make their lives harder. Fuel prices will cause the most pain in the next year, ranking first of all the pressure points surveyed for the third consecutive MYOB Business Monitor. Cashflow overtook interest rates to reach second position, while rates retreated to third and price margin and profitability remained fourth. Tax obligations overtook attracting new customers remained the fifth most expected pressure, and competitive activity and meeting tax obligations were equal in sixth place.

Top pressure points for next year Extreme pressure Quite a lot of pressure
Fuel prices 14% 26%
Cashflow 11% 22%
Interest rates 10% 22%
Price margins and profitability 9% 23%
Attracting new customers 5% 24%
Meeting tax obligations 9% 18%
Competitive activity 7% 20%

“External pressures such as rising fuel prices, weakened cashflow and daunting levels of paperwork are keeping business owners up at night as they head into the most compliance-heavy, end of financial year period since the GST was introduced. They will applaud any government initiatives that inject funds into their bank accounts and take away some of the tax time pain,” Mr Reed commented.

“The new Minister for Small Business is facing these challenges alongside his constituents. The good news for Mr O’Connor is that much of the homework for effective change has been done by Ken Henry and at last year’s Tax Forum, but SMEs need those reforms implemented quickly if the sector is to bounce back in the next 12 months.

“Two initiatives currently on the table - 1) a new type of business entity that has some of the benefits of a company, yet the simplicity of sole-trader trading, and 2) a tax loss carry-back scheme - would be welcomed loudly by a sector that needs measures such as these to make business life a little easier.”

Holidays and staffing a big sacrifice

The pressures of running a business often take a lifestyle toll, with the research finding nearly one third (29%) had not holidayed since beginning operations. That was most common amongst Baby Boomers, with 33% saying this was the case, and least common amongst Generation Y respondents (23%).

Surprisingly, there was little correlation between this finding and respondents’ length of time in business. Those who had been established for 10+ years were only one percentage point more likely to have made this sacrifice than those in business for less than two years.

“SMEs account for around 96% of businesses in Australia and number well over two million. It is saddening and mind-boggling to think three in ten have sacrificed every potential holiday with friends and family,” Mr Reed said. 

“This need to reduce costs where possible was echoed in hiring trends. We found that throughout their business life one quarter have cut back on, or not used, contractors, part time or casual staff.  They list it as a sacrifice they have simply had to make.

“Most employment reporting until now hasn’t expressed the impact of this on the business owners themselves. SMEs’ need to keep staffing hours and numbers tight has an enormous impact on their quality of life. The most concerning result from this MYOB Business Monitor is that so many self-made business people have not taken a break at all. This has big implications for their wellbeing.”

Near-record dissatisfaction with government support

The MYOB Business Monitor found respondents’ dissatisfaction with Federal Government support for their businesses has risen significantly in the past two years, from 38% in March 2010 to 52% in March 2012. However, this was slightly lower than the highest level recorded so far by the study - 56% in October 2011 and July 2008.

“A number of measures presently being discussed to ease the burden on SMEs are a step in the right direction, but the Minister for Small Business faces a disillusioned sector. In fact, their dissatisfaction is now just below the equal highest level recorded in all our MYOB Business Monitor studies,” said Mr Reed. 

“Given the number of Australians this research represents, Mr O’Connor faces a big task. His portfolio has been overlooked for too long and the interchange bench of four small business ministers in four years has not done any favours. The time for listening is well and truly over; the sector needs policy action now.”

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For further statistics, comment or other information please contact:

Kristy Sheppard
MYOB Public Relations & Corporate Affairs Manager
02 9089 9068 / M: 0407 450 860 /

About MYOB

Established in 1991, MYOB is Australia's largest business management solutions provider. It makes life easier for approx. 1.2 million businesses across Australia and New Zealand, by simplifying accounting, payroll, tax, practice management, CRM, websites, job costing, inventory and more. MYOB provides ongoing support via many client service channels including a network of over 40,000 accountants, bookkeepers and other consultants. It is committed to ongoing innovation, particularly in cloud computing solutions, and now spends more than AU$30 million annually on research and development. In 2013, MYOB expanded its offerings with the acquisition of accounting solutions provider BankLink. For more information, visit

About the MYOB Business Monitor

Established in 2004, the MYOB Business Monitor is a nationwide survey of Australian business owners and directors. This most recent study ran from 13 to 27 February 2012, surveying 1,043 representatives of small and medium businesses, from sole traders to mid-sized companies, representing the major industry sectors. The Monitor researches business performance, including profitability, cash flow and pipeline work, and the mindset of these operators. For the purposes of this survey, generations were broker down as follows: Generation Y – 18-29 years, Generation X – 30-44 years, Baby Boomers – 45-59 years and Traditionalists – 60+ years.