Over a third of small business owners (35 per cent) are feeling increased pressure due to COVID-19 according to MYOB’s latest Business Monitor report.
While the figure is down 20 per cent on last year, indicators suggest pressure is mounting across other areas of business as the pandemic continues.
Cash flow remains a top business pressure
The latest research found top business concerns to be cash flow and the cost of utilities with one in three respondents reporting stress. The greatest increases includes access to finance, a pressure for just over a quarter of business owners, up from 20 per cent in December. The pressure of late payments is also on the rise increasing to 29 per cent from 25.
Emma Fawcett, MYOB’s General Manager SM says as some businesses return to normality traditional business pressures are returning.
“It’s an unfortunate return to ‘business as usual’ for the country’s 2.29 million SMEs with 14 of the 16 business pressures measured by the MYOB Business Monitor increasing in the last six months. This demonstrates that as COVID-19 pressure subsides other business pressures increase.
“SME concerns with payment times and old bugbears associated with physical presence – such as utilities like electricity and gas – are back on the table. It seems these issues were temporarily superseded during the pandemic but are increasingly back on the radar now for many SMEs.”
Despite pressure business confidence returning
The research, conducted before Victoria’s latest lockdown, found overall business owners are feeling positive about the year ahead, with 57 per cent predicting an uplift in Australia’s economy and almost half (48 per cent) predicting their revenue will be up a year’s time.
The latest Business Monitor shows a marked difference in confidence for the coming year by industry, with 78 per cent of Finance and Insurance businesses predicting the economy will improve in the next 12 months, compared to a national average of 57 per cent. It’s a different story for the nation’s retailers and hospitality sector, with only 46 per cent predicting uplift.
Confidence by state
Queensland’s small business owners are the most confident with six in ten predicting an improvement in the economy in the year ahead. This is followed by Victorians, at 59 per cent when the survey was conducted prior to the latest lockdown. In New South Wales 58 per cent believed the economy would improve as did 55 per cent of Western Australian business owners.
Nationally three in ten businesses report an increase in revenue on a year ago, up from 19per cent in December. SImilarly the likelihood of a revenue increase in 12 months’ time is up 11 points to 48 per cent, compared to 37 per cent at the end of last year.
In the next 12 months, small business owners are looking to increase the prices and margins on what they sell (30 per cent), retaining customers (29per cent), as well as customer acquisition, employee payments and marketing/advertising online (all 28 per cent).
“After a challenging trading year, it’s encouraging to see SMEs looking to explore new revenue opportunities over the next 12 months,” Fawcett said.
“It’s concerning those operational pressures are on the rise as the country recovers from COVID-19, however an overall confidence in the economy as well as SME revenue, is a good sign for a sector that makes up 95% of Australian businesses.”
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