Revenue drops, optimism rises

Business owners report revenue losses, yet have renewed optimism for coming year

Australia’s business owners are reporting revenue losses, yet have a renewed sense of optimism for the coming year, according to MYOB.

The latest MYOB Business Monitor reveals 39 percent of owners had revenue losses in the past 12 months, while only 19 percent experienced gains.

On the upside, more than half (54 percent) of the respondents are expecting economic improvement in the next six to 18 months.

MYOB CEO Tim Reed admits the economic downturn is hitting Australian business owners’ hip pockets.

"While business owners may be under the pump now, it is heartening to see they do have a positive attitude for the next 12 to 18 months," he says.

"Business owners are resilient, seeing the glass half full, and the level of optimism demonstrates their positive nature and desire to ‘get on with doing business’."

Thirty-six percent of business owners say revenue will increase over the next 12 months, only 15 percent expect a decline.

Queensland results show 45 percent of owners are expecting economic improvement in the next year, coming second only to Western Australia (50 percent).

However, the MYOB Business Monitor also reveals many business owners are not tracking their cashflow effectively (48 percent), which impacts their capacity to make business decisions based upon a proper cashflow analysis.

"A surprising number of business owners appear to have little focus on managing their cashflow. The economy is not out of the woods just yet and we encourage business owners to really focus on cashflow, make it a priority and take full advantage of all opportunities to maintain, and possibly improve, their business health," Reed says.

Tempering the report's findings of widespread optimism, are concerns business owners still have on economic pressures.

Fuel prices are a major concern.
Just under one-third of Queensland owners expect fuel prices to put the most pressure on business over the next month.

Other obstacles include price margins and profitability, cashflow and competitive activity.

In seeking to improve business performance, many business owners are likely to seek the help they need.

However, MYOB reveals 45 percent of business owners have not sought advice on how to improve their performance.

"The majority, 76 percent, of business owners surveyed source information or advice on important tax and compliance issues from their accountant, however, this drops to 31 percent of business owners who ask their accountant for advice on improving their business’ performance," Reed explains.

"I encourage business owners not to hesitate to also seek specialist business advice from their accountant. An accountant can not only help with tax and accounting issues, but can assist business owners with business planning, financial goal-setting, cashflow management and possible business-performance improvements."

Owners of small and medium businesses are more confident than others: 56 percent of small business owners and 59 percent of medium business owners are confident about immediate business prospects. Comparatively only 45 percent of micro-business owners and 46 percent of sole traders share the sentiment.

Business owners in finance and insurance are most confident about their business prospects, at 63 percent.

There has been a considerable loss of confidence among businesses in the agriculture and manufacturing industries, down from 58 percent in March to 38 percent.

There has also been a loss of confidence among owners in the retail, wholesale and hospitality industries, down from 57 percent in March to 43 percent.

Construction, trades, transport and storage industries are also feeling the pressures of the downturn, with confidence down to 40 percent, from a March high of 52 percent.

When queried on seven possible changes that would make the single biggest difference to their business success in the next 12 months, 27 percent of business owners say they would prefer additional business tax deductions, ahead of personal tax reductions (21 percent).

The MYOB Business Monitor is a nationwide survey representing 1,000 Australian business owners. Its findings are based on a statistically representative sample of business owners, whose businesses employ between zero and 199 people.

These latest results were compiled from online surveys conducted in June.

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