Accounting software provider MYOB recently investigated whether small and medium business operators experience revenue growth due to the use of online technologies.
Here, a summary of the results from the final report, confirms the widening divide between the online-savvy and the online-cautious.
The March 2014 MYOB Business Monitor revealed a higher proportion of online-savvy businesses reported revenue growth in the year to February 2014 and expect future revenue growth than those without online technologies. They also reported higher economic confidence and more work/sales in their short-term pipeline.
MYOB concluded that the growth expectations of online-savvy businesses is likely fuelled by their current workload.
Almost half of SMEs who use cloud technology and over two fifths with a website and a social media site reported increased sales or work in their short-term pipeline. In contrast, slightly more than one quarter of SMEs without a website reported more pipeline work.
The study of 1,032 SMEs also found an increase in the use of online technologies. The proportion with a website is now 42 per cent, up from 38 per cent six months ago. A similar trend occurs for those using social media (39 per cent, up from 33 per cent), and cloud computing (33 per cent, up from 16 per cent).
|
|
National |
Business website |
Cloud Computing |
Social Media site |
||
|
|
|
Yes |
No |
Yes |
No |
Yes |
|
Performance - revenue up |
22 per cent |
28 per cent |
18 per cent |
26 per cent |
20 per cent |
29 per cent |
|
Performance - revenue down |
34 per cent |
29 per cent |
38 per cent |
28 per cent |
37 per cent |
26 per cent |
|
Expectations - revenue up |
34 per cent |
39 per cent |
30 per cent |
38 per cent |
32 per cent |
39 per cent |
|
Expectations - revenue down |
22 per cent |
20 per cent |
23 per cent |
25 per cent |
20 per cent |
20 per cent |
|
Economic confidence (improvement in 12 mths or less) |
26 per cent |
30 per cent |
24 per cent |
38 per cent |
21 per cent |
28 per cent |
|
More work/sales in 3-mth pipeline |
33 per cent |
43 per cent |
26 per cent |
49 per cent |
26 per cent |
44 per cent |
The use of tablets such as an iPad or other device has risen to 27 per cent from 24 per cent six months ago. Smartphone usage was slightly down from 46 per cent to 43 per cent in the same period. A similar proportion of operators don't have an online presence for their business, at 43 per cent.
According to MYOB chief strategy officer John Moss, the difference between online businesses and those that don’t have an online presence is marked across a range of business performance measures.
“What’s clear to us from our years of conducting research into SMEs’ use of online technologies is that businesses with an online presence reach more people and are more engaged with their customers. This translates to stronger business performance. For example, those with a website are 56 per cent more likely to see annual revenue rise, and those who use cloud computing are 30 per cent more likely to do so. Businesses that embrace online technologies also have more work in their short-term pipeline,” he said.
“It’s evident the digital divide among SMEs is widening, and we strongly believe it’s time for more business operators to take a look at the benefits of easy-to-use online technology for the health of their business.”
More confidence, more contribution
Buoyed by their performance, SMEs with a website are more positive about the economy, with nearly one third expecting an improvement within 12 months, compared to nearly one quarter of businesses without a website.
“Online businesses are more likely to be making a contribution to wider economic growth, including improved job opportunities for Australians,” Moss said.
“18 per cent of businesses with a website and 18 per cent with a social media site are planning to increase their full-time staff this year. That’s a considerably higher number than the seven per cent of businesses without a website and the 9 per cent without social media who are looking to hire this year.”
Email & online banking most popular online services
“We also asked business owners and managers to identify the online services they used in their business,” Moss reported.
“The top five online services were email at 76 per cent, online banking at 69 per cent, social networking at 29 per cent, buying products and services online at 22 per cent, and email marketing, VOIP and file sharing - each at 21 per cent.”
Over one third of SMEs (38 per cent) now accept some form of online payment via a shopping cart, while 21 per cent use search engine optimisation and 18 per cent use search engine marketing as a way of promoting their business, 16 per cent have an e-commerce facility within their website, and 12 per cent use other websites to sell products and services.
LinkedIn most popular social media avenue for business
According to the survey, LinkedIn is the most popular business social media platform, with 18 per cent of SME operators using their profiles to connect with colleagues and other business people. 17 per cent have a Facebook page for their business, while eight per cent have a Google+ business page. Six per cent communicate via Twitter, while five per cent use YouTube as a vehicle to connect with customers.
Businesses mostly likely to be connected
When looking at online business activity by mainland states, Western Australia are the most connected, with 37 per cent of businesses using cloud computing and 19 per cent with a business website and social media site. South Australia was least likely to use cloud computing (21 per cent) and a business website and a social media site (14 per cent).
In terms of industry, those in finance and insurance were the most likely to use cloud computing (42 per cent) while operators in agriculture, forestry and fishing were the least likely (12 per cent). Operators in retail and hospitality were the most likely to have a business website and a social media site (25 per cent) while those in agriculture, forestry and fishing were the least likely (six per cent).
Comparing operators via business tenure, operators in establishing businesses were the most likely to use cloud computing (42 per cent) and a business website and a social media site (18 per cent), while established businesses were the least likely to use these online technologies (17 per cent and 11 per cent respectively).
Operators based in city and metropolitan areas were the most likely to have an online presence (57 per cent), while rural-based operators were the least likely (38 per cent).