Amid recent speculation of a potential recession, the latest MYOB Business Monitor indicates SMEs are not overly concerned, with a quarter expecting the economy to improve in 2017.
The bi-annual survey of more than 1000 small business owners found a further 33% expect the economy to remain the same.
In positive news, the survey also points to a lift in businesses stating revenue had increased – from 21% in July to 27% in December.
MYOB CEO, Tim Reed, highlights 42% of start-ups and 35% of establishing businesses reported revenue increases, while 37% of rural businesses achieved revenue growth.
“We know that SMEs are very entrepreneurial – our recent MYOB SME Snapshot showed many are running two or more businesses and some even have plans for more,” says Reed. “They continue to be the engine room for the Australian economy.”
Respondents in Queensland were the most optimistic, with 34% expecting the economy to improve in the year ahead, which lifted to 40% of those that had grown revenue in 2016.
In other results, almost half of businesses in the retail and hospitality sectors (46%) expect increased revenue in the next three months.
New South Wales and South Australian businesses were the most positive about increased holiday season revenue (48% and 38% respectively), with Western Australia the least optimistic (22%).
Drilling down on business segments, franchisees had the highest number of businesses expecting a rise in revenue in the short term (61%), followed by franchisors (57%), Gen Y operators (56%), start-ups (54%), establishing businesses (47%), importers (50%) and exporters (48%). Around half of operators with a social media site (50%) or a business website (47%) anticipate revenue growth in the next three months.
And in terms of those businesses looking to increase investment in their operations in the next 12 months, Gen Y operators, retail and hospitality, manufacturing and wholesale, start-ups and establishing businesses are the most likely to do so.
According to the survey, the top areas of focus for SMEs were prices and margins on products/services offered (30%), broadening their offerings with the number or variety of products or services (28%), working on customer retention (28%) and investing more in selling online (26%).
Businesses that were much less likely to be investing included Baby Boomers, established businesses, construction and trades and transport, postal and warehousing.
Reed says Australia must remain an attractive place to do business and is calling on the government, opposition and cross-benches to support the proposed company tax reductions.
“Having one of the highest levels of company tax in the OECD just won’t cut it. We also need to ensure we keep removing roadblocks to business growth, so the push towards prompt payment protocols is also very welcome,” he concludes.