A new study has revealed fresh insight into business sentiment in Australia – and which companies look forward to a brighter future.
The latest MYOB Business Monitor report, based on the recent survey conducted by Colmar Brunton, compared the attitude, results, intentions and expectations of Australian businesses less than two years old with that of their peers.
The study found that, compared to more established small to medium enterprises (SMEs), start-ups worked less hours for better financial reward last year and are more confident about this year’s revenue performance.
In the year to February 2013, start-up businesses reported stronger revenue performance than SMEs on the whole. More than one third (36 per cent) saw revenue gains in this time, compared to 18 per cent of all SMEs.
Start-ups were also significantly less likely to report a fall in revenue, with 27 per cent seeing this compared to 39 per cent of SMEs overall. Twenty-eight per cent reported steady revenue, compared to 40 per cent, and eight per cent were unsure.
The research also found that start-up business owners and managers had far more confident expectations around financial performance for 2013 than their more established counterparts – with 42 per cent expecting revenue to increase, compared to 30 per cent of SMEs on average.
Start-ups were also less likely to predict a fall, with just 17 per cent forecasting this, while an average of 19 per cent of SMEs expected this. Overall, 37 per cent expected steady revenue, compared to 42 per cent of all SMEs. The remainder were unsure.
Commenting on the survey results, MYOB general manager, business division, James Scollay said that, despite the tough market currently, the positive outlooks from start-ups are a testament to the nurturing environment for entrepreneurs in Australia which must be preserved.
“Australia is well-known for fostering a thriving community of entrepreneurs, but few new ventures succeed without continued industry, government and public support,” he said.
“This community is a vital and dynamic business force for Australia. Many are on their way to becoming tomorrow’s business leaders and influencers. Start-ups represent the next generation of employers, suppliers, innovators and investors in economic growth and development. And even though not every start-up succeeds, each plays a role in enriching the business environment, creating demand, testing ideas and supporting the livelihoods of many.”
According to the survey, start-up business operators believe their biggest challenge over the year is attracting new customers. Seventy-three per cent reported this as a pressure for their operation, with 38 per cent expecting this pressure to be ‘quite a lot’ (29 per cent) or ‘extreme’ (nine per cent).
Cash flow is also a major challenge, with 71 per cent reporting this as a pressure and 34 per cent expecting it to place quite a lot of (25 per cent) or extreme (nine per cent) pressure on them. Fuel prices ranked third, with 70 per cent of start-ups saying they anticipate pain at the pump throughout 2013.
Not surprisingly, the customer also reigns supreme for these new businesses, with almost half intending to progress their customer retention and acquisition strategies this year (42 per cent and 41 per cent respectively). Increasing the number or variety of products or services sold was also a key focus, coming in third at 37 per cent.