The latest MYOB Business Monitor report reveals that 58 per cent of SMEs see the cost of doing business as more of an issue than it was 12 months ago.
In particular, SME owners are reeling from the rising costs of fuel (33 per cent), the high cost of utilities (32 per cent), and the increase in interest rates (27 per cent).
The survey also highlights the fact that as part of their efforts to manage the rising costs, SMEs are making considerable sacrifices. These include incorporating increases into the price of their products and services (29 per cent), making less or no profit (28 per cent), and either reducing or not taking an income at all (21 per cent).
The research also notes that for 34 per cent of SMEs, revenue is down compared to a year ago, with 38 per cent citing challenging economic conditions as the core reason.
Despite the challenging climate, newer businesses are slightly more optimistic about the future, with 36 per cent of start-ups (businesses in operation for less than two years) anticipate economic improvement over the coming year, compared to only 19 per cent of established businesses in operation for 10 years or more.
Paul Robson, CEO of MYOB, stated that this is undoubtedly a difficult time for businesses, and while SMEs are known to be resilient, many will need to overcome hurdles this year to ensure the long-term prosperity of the sector overall.
“We’ve seen no shortage of challenges in recent years, and the impacts of higher operating costs, combined with consumer belt-tightening, is reflected in the pricing, profit and income decisions of small business owners, as they try to achieve more with less,” Robson said.
“SMEs are especially susceptible to fluctuating conditions, but they’re also incredibly resourceful and can move quickly if required,” he added. “Despite rising costs being felt across the board, the research indicates businesses born in the last two years have emerged more optimistic and strong, and are feeling more positive about the year ahead.”
The MYOB Business Monitor also reveals that in the last 12 months 43 per cent of start-ups increased the number of online tools they use, boosting their productivity and chance of success. This is compared to 21 per cent of SMEs surveyed overall.
“Building and growing a business against the backdrop of challenging market conditions means businesses are looking to supercharge their productivity right from the start,” Robson said. “Digital capabilities enhance productivity, helping SMEs save time and money, improve accuracy in their business, thereby increasing their likelihood of success.
“Small- and medium-sized enterprises are responsible for employing eight million people and contributing half of the national GDP. Identifying ways to support all SMEs, from startups through to established businesses, is absolutely critical in building a thriving local business community and a strong national economy,” Robson concluded.
