Table 5: Performance ranking of Federal Government in contributing to the ... Perceptions of current and future performa
MYOB Australian Small Business Survey August 2004 (Quarter 3) Small Business Survey Report Prepared for MYOB
Prepared by AMR Interactive
Prepared for MYOB Australia
AMR Interactive Contact: Chris Caley Survey Project Manager Email:
[email protected] Web: www.amrinteractive.com
MYOB Contact: Caroline Jackson Public Relations Manager Email:
[email protected] Web: www.myob.com.au
Address: Level 14, 235-243 Jones St, Ultimo, NSW 2007
Address: 12 Wesley Crt, Burwood East, VIC 3151
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MYOB Australian Small Business Survey
August 2004
Table of Contents List of Tables and Charts ......................................................................................... 2 Perception of own business (current)....................................................................... 4 Perception of own business (future)......................................................................... 5 Expectations for future economic performance ....................................................... 6 Expectation of investing in own business................................................................. 7 Source of funding for investment in own businesses............................................... 8 Perceptions of Federal Government performance................................................... 9 Perceptions of State Government performance..................................................... 10 Outlook for specific business issues (positive) ...................................................... 11 Outlook for specific business issues (negative) ..................................................... 12 Activities conducted online ..................................................................................... 13 Appendix: Questionnaire items .............................................................................. 14
List of Tables and Charts Table 1: Perception of own business performance (%) ............................................... 4 Table 2: Performance outlook for own business over the next 12 months (%)............ 5 Table 3: Performance outlook for Australian economy over the next 12 months (%).. 6 Chart 1: Expectation of investing in own business in the next 6 months (%)............... 7 Table 4: Source of funding for investment in small business (%) ................................ 8 Table 5: Performance ranking of Federal Government in contributing to the development of small business in Australia (%) .................................................. 9 Table 6: Performance ranking of State Government in contributing to the development of small business in Australia (%) ................................................ 10 Chart 2: Small businesses with positive outlook on specific issues (%) .................... 11 Chart 3: Small business with negative outlook on specific issues (%)....................... 12 Chart 4: Activities conducted online (%)..................................................................... 13
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MYOB Australian Small Business Survey
August 2004
About the Study These tables present summary findings for Key indicators from a national sample of 2,722 small business proprietors and general managers, whose businesses have a connection to the Internet. These are defined as both non-employing and employing businesses up to a maximum of 20 employees. Results have been weighted to reflect the small business population distribution according to the Australian Bureau of Statistics (ABS) for company size, length of time operating, region and selected ANZSIC Industry divisions. Refer to ABS publications Characteristics of Small Business, 8127.0, 2001 and Small Business in Australia, 1321, 2001. This quarterly study follows from a benchmarking undertaken by AMR Interactive in December 2003 (n=13,212), and the first wave of the tracker in April 2004 (n=2,896). All comparisons refer to the April quarterly tracking research. For a copy of this previous report, please contact the survey project manager or MYOB Public Relations. Key Indicators presented are: •
Perceptions of current and future performance of small business in Australia.
•
Perceptions of the outlook for the Australian economy.
•
Likelihood of small businesses investing in the next 6 months, and the likely source of funding.
•
Perceptions of Federal and State government performance in contributing to small business development in Australia.
•
Business outlook for small business in terms of sales, cash flow, business costs and other issues.
•
Activities conducted online
The findings of the research are presented by industry type: Industry Sample Agriculture 150 Manufacturing 252 Construction 285 Wholesale trade 116 Retail trade 393 Accommodation, cafes, restaurants 113 Transport and storage 92 Communication services 236 Finance and insurance 198 Property and business services 348 Education 70 Health and community 164 Cultural and recreational services 61 Personal and other services 170 Information & Communications Technology 67 Tourism* 7 * Due to low base size Tourism is included in Total numbers, though not reported separately.
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MYOB Australian Small Business Survey
August 2004
Perception of own business (current) Table 1: Perception of own business performance (%)
Small businesses still performing well Very Well %
Quite Well %
Not very well %
Not at all well %
15
64
17
3
7
66
21
6
16
62
20
1
18
64
17
1
21
58
17
3
14
61
22
3
21
68
11
18
77
3
1
12
61
22
2
13
71
15
1
16
73
9
2
15
63
19
2
24
61
8
7
16
56
25
10
56
30
4
11
59
21
9
Total Agriculture Manufacturing Construction Wholesale trade Retail trade Accommodation, cafes, restaurants Transport and storage Communication, media & marketing services Finance and insurance Property and business services Education Health and community Cultural and recreational services Personal and other services Information & Communications Technology
Base: Online small businesses Note: ‘Don’t know’ responses not shown in table Q: Thinking about the current performance of your own business, do you think your business is performing?…(very well, quite well, not very well, not at all well, don’t know) *Caution low base AMR Interactive, 2004 (n =2,722 )
While still an overwhelming majority, there has been a slight decrease in positive perception of current business performance by 4% in the second quarter of the year to 79% amongst owners or proprietors of small businesses with Internet connections. This is continuation of the drop of 3% witnessed by previous quarter. However, nearly two thirds are still rating their business as performing quite well. At an industry level Health & Community are performing the best (24% Very Well), overtaking Property & Business from last quarter (down 5% to 16% very well). At the other end of the scale, Personal & Other services has the highest proportion of a negative performance rating at 34% - a 14% increase from last quarter.
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August 2004
Perception of own business (future) Table 2: Performance outlook for own business over the next 12 months (%)
Owners remain upbeat about future business performance Better than now %
No change %
Worse than now %
Don’t Know %
Total
67
25
3
5
Agriculture
56
24
10
11
Manufacturing
69
23
2
6
Construction
58
34
2
5
Wholesale trade
73
14
6
7
Retail trade
71
18
4
7
Accommodation, cafés & restaurants
76
18
1
4
Transport & Storage
70
24
1
5
Communication, media & marketing services
71
21
1
7
Finance & Insurance
75
21
2
1
Property & Business Services
69
24
3
4
Education
71
28
Health & Community services
70
27
2
2
Cultural & Recreational services
63
33
1
3
Personal & Other Services
73
19
1
7
Information & Communications Technology (ICT)
67
25
7
2
1
Base: Online small businesses Q: Now thinking about the performance outlook for your own business over the next 12 months, do you think your business will perform…better than now, worse than now, no change, don’t know? *Caution low base AMR Interactive, 2004 (n=2,722 )
When it comes to owners’ perceptions of business performance over the next 12 months, there has been increase in positive outlook overall, up 3 points to 67% (similar to the benchmark in December 2003). By industry there has been some movement from the last quarter. Wholesale Trade and Cultural & Recreational Services have dropped in their optimistic outlook (each down 8% in “better than now”). However, at the other end of the spectrum, Transport & Storage, Education, Health & Community Services, and ICT have all seen increases between 6% and 13%.
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August 2004
Expectations for future economic performance Table 3: Performance outlook for Australian economy over the next 12 months (%)
Expectations for general economic outlook are less optimistic Better than now %
No change %
Worse than now %
Don’t Know %
Total
32
40
16
12
Agriculture
36
45
12
8
Manufacturing
26
45
17
13
Construction
25
49
15
11
Wholesale trade
40
27
16
17
Retail trade
30
38
21
11
Accommodation, cafés & restaurants
33
40
8
19
Transport & Storage
41
31
6
21
Communication, media & marketing services
33
40
17
10
Finance & Insurance
35
37
20
8
Property & Business Services
26
45
18
12
Education
42
32
15
10
Health & Community services
30
34
19
16
Cultural & Recreational services
39
36
13
12
Personal & Other Services
47
24
18
12
Information & Communications Technology (ICT)
43
33
17
6
Base: Online small businesses Q: Thinking more generally about the condition of the overall Australian economy over the next 12 months time, do you think it will perform... better than now, worse than now, no change, don’t know *Caution low base AMR Interactive, 2004 (n=2,722 )
Considering the economy in general, more small business owners are more optimistic for the next 12 months with ratings of “Better than now” and “no change” up 3% each from last quarter. This shift is partly due to a commensurate drop in negative perceptions, down to 16% from 20%. Looking generally across sectors, certain industries have greatly increased their optimistic outlook perspective from last quarter: Transport & Storage (up 10%), Personal & Other Services (up 11%), and ICT (up 8%). Amongst industry sectors, Retail Trade has the largest proportion of negative perception at 24%, followed by Finance & Insurance at 20%. Transport & Storage has the highest number of owners who are undecided, with 21% saying they don’t know.
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August 2004
Expectation of investing in own business Chart 1: Expectation of investing in own business in the next 6 months (%)
Proportion planning to invest in own business steady Total
62%
Agriculture
63%
Manufacturing
64% 66%
Construction
73%
Wholesale trade 62%
Retail trade
73%
Accommodation, cafes, restaurants Transport and storage
45% 66%
Communication, media and marketing services Finance and insurance
55% 63%
Property and business services Education Health and community Cultural and recreational services Personal and other services Information & Communications Technology Tourism*
53% 56% 52% 62% 59% 78%
Q: Do you expect to invest in your business in the next 6 months? *Caution low base AMR Interactive, 2004 (n=2,722 )
When asked about investing in the business, about six out of ten owners said they plan to do so within the next six months. Wholesale Trade and Accommodation, Cafes & Restaurants have taken the lead as the two most likely sectors to invest in their own business in the next 6 months (each 73%). The biggest increase has been for Properly & Business Services (up 12% from Q1) followed by Construction (up 10% from Q1). These are the sectors to watch for strong growth in 2004. Owners in Agriculture have seen a drop in likelihood to invest in the short term, from their leading position last quarter (at 73%) to 63% this quarter. This may be due to the nature of the business, or depressed economic conditions within the sector.
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August 2004
Source of funding for investment in own businesses Table 4: Source of funding for investment in small business (%)
Four out of ten will self fund and borrow to invest in business Fund all of it from own resources %
Combination of Borrow the entire self funding and amount borrowings % %
Don’t Know %
Total
51
40
7
3
Agriculture
42
49
8
1
Manufacturing
50
38
10
2
Construction
46
46
7
2
Wholesale trade
43
50
2
4
Retail trade
53
35
9
3
Accommodation, café & restaurants
47
46
6
2
Transport & Storage
37
42
13
8
Communication, media & marketing services
62
29
5
5
Finance & Insurance
61
33
4
2
Property & Business Services
56
33
7
4
Education
52
46
2
Health & Community services
63
33
3
Cultural & Recreational services
55
38
7
Personal & Other Services
62
34
0
3
Information & Communications technology
64
32
1
3
1
Base: Online small businesses who expect to invest in their business in the next 6 months Q: And in funding this investment, are you likely to use your own cash resources, raise it through borrowings or both? *Caution low base AMR Interactive, 2004 (n=2,722 )
On a whole, about half of small businesses remain to self-fund future investment, as was the case last quarter. Looking at specific industry sectors, Education has dropped from 80% to 52% this quarter. Meanwhile, Accommodation and Transport & Storage have seen rises in the vicinity of 10% for self-funded investment forecasts. The leaders this quarter in selffunded investments at just over 60% are Information & Communications Technology, Personal & Other Services, Health & Community Services and Communication, Media & Marketing Services. The sector most likely to use a combination of funding is Wholesale Trade, with about half of all business in this sector reporting that they will borrow in conjunction with their own finances. Following closely are the Agriculture, Construction & Accommodation, Café and Restaurants industries. Transport & Storage continues to be the industry that is most likely to completely borrow their expansion funds (13%) from last quarter.
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MYOB Australian Small Business Survey
August 2004
Perceptions of Federal Government performance Table 5: Performance ranking of Federal Government in contributing to the development of small business in Australia (%)
Federal government performance rated poorly by majority Very/Somewhat Poor %
Neither
Don’t Know
%
Very/Somewhat Good %
Total
44
17
21
18
Agriculture
36
18
29
16
Manufacturing
45
24
16
15
Construction
44
15
19
22
Wholesale trade
43
18
22
15
Retail trade
47
15
18
20
Accommodation, cafés & restaurants
48
17
26
10
Transport & Storage
56
17
11
16
Communication, media & marketing services
49
14
22
16
Finance & Insurance
45
18
22
14
Property & Business Services
40
21
23
16
Education
38
26
19
17
Health & Community services
44
14
22
20
Cultural & Recreational services
48
10
21
21
Personal & Other Services
36
15
23
27
Information & Communications technology
57
16
7
20
%
Base: Online small businesses Q: How would you rate the Federal Government’s current performance in contributing to the development of small business in Australia? Please indicate where 1 means very poor performance, 2 means somewhat poor performance, 3 means neither poor nor good performance, 4 means somewhat good performance and 5 means very good performance. *Caution low base AMR Interactive, 2004 (n=2,722 )
A majority of owners view the Federal Government’s performance in contributing to the development of small business in Australia negatively, with 44% giving a rating of somewhat or very poor. One fifth are undecided or don’t know. These results suggest that not enough is being done to help owners develop their businesses. With an election approaching, this is one cohort of voters that should not be neglected. Information & Communications Technology rates the Federal Government’s performance worst this quarter, at 57% negative. Personal & Other Services rate them the most highly, with 50% positive.
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Perceptions of State Government performance Table 6: Performance ranking of State Government in contributing to the development of small business in Australia (%)
Majority also rate State government performance poorly Very/Somewhat Poor %
Neither
Don’t Know
%
Very/Somewhat Good %
Total
53
18
10
19
Agriculture
57
21
6
15
Manufacturing
57
18
9
16
Construction
57
15
6
21
Wholesale trade
56
23
8
14
Retail trade
52
18
9
21
Accommodation, cafés & restaurants
60
16
16
8
Transport & Storage
63
15
7
15
Communication, media & marketing services
53
23
9
15
Finance & Insurance
54
14
13
19
Property & Business Services
47
20
18
15
Education
40
23
17
20
Health & Community services
47
17
14
22
Cultural & Recreational services
40
23
12
25
Personal & Other Services
43
15
15
27
Information & Communications technology
57
12
5
26
%
Base: Online small businesses Q: How would you rate the State Government’s current performance in contributing to the development of small business in Australia? Please indicate where 1 means very poor performance, 2 means somewhat poor performance, 3 means neither poor nor good performance, 4 means somewhat good performance and 5 means very good performance. *Caution low base AMR Interactive, 2004 (n=2,722 )
Small businesses are rating the Sate Government’s performance rating is worse than the Federal Government – 10% more business rate the State Government performance as being somewhat/very poor, whereas 10% less business rate the State Government’s performance as very/somewhat good compared to the Federal Government. The sectors most likely to be feeling negative about the State Government are Accommodation, Cafes & Restaurants and Transport & Storage (60% and 63%).
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Outlook for specific business issues (positive) Chart 2: Small businesses with positive outlook on specific issues (%)
Small businesses optimistic about marketing and customers
Sales
53
Profitability
52
Cash flow
23 14 14
48 8
42
Business systems (IT, accounting) Business costs
5
25
Competitor activity
8
22
Exchange rates
16
Interest rates
16
Federal government policies Local government policies
20
55
Marketing and customer relationships
0 1 1
13 8
1
Positive
Very positive
Base: Online Small Businesses Q: Listed below are a number of issues that your business will deal with over the next 12 months. Thinking only about your own business, please indicate your outlook for each of these issues where 1 is a very negative outlook, 2 is a somewhat negative outlook, 3 is neutral, 4 is a somewhat positive outlook and 5 is a very positive outlook? (If this is not applicable to your business select 6) AMR Interactive, 2004 (n=2,722 )
There are no dramatic changes this quarter in terms of the positive outlook (for the next 12 months) by businesses on specific. The majority continue to be positive or ambivalent towards most measures with Sales and Marketing and Customer Relationships being seen in the most positive light (74% and 70% respectively). Although Government Policies (12%), Exchange Rates (13%) and Interest Rates (12%) continue to attract the least positive scores, they have increase from last quarter by about 3-5 points.
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August 2004
Outlook for specific business issues (negative) Chart 3: Small business with negative outlook on specific issues (%)
Interest rates and local government policies main concerns 35
2
Interest rates 27
9 3 9
Local government policies
25
Business costs
25
Federal government policies 16
3
Exchange rates
14
3
Competitor activity
12
2
Cash flow
10
1 1
6 1
Negative
Very Negative
Profitability Sales 4
Business systems (IT, accounting)
0 2
Marketing and customer relationships
Base: Online Small Businesses Q: Listed below are a number of issues that your business will deal with over the next 12 months. Thinking only about your own business, please indicate your outlook for each of these issues where 1 is a very negative outlook, 2 is a somewhat negative outlook, 3 is neutral, 4 is a somewhat positive outlook and 5 is a very positive outlook? (If this is not applicable to your business select 6) AMR Interactive, 2004 (n=2,722 )
Businesses have a more negative outlook this quarter for the major issues of Government and Interest rates. Interest rates have taken over Government to attain the top spot in terms of negative outlook (up 7% in total negative outlook from last quarter. Government performance, both at the Federal and Local level, continues to attract the high levels pessimism. Along with Interest rates, Exchange rates are being viewed more negatively (up 6% th to take the 5 position). The negative outlook with regards to other issues has not shifted greatly this quarter.
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Activities conducted online Chart 4: Activities conducted online (%)
Banking and bill payments are the most popular online activities General Banking and book keeping
82%
Bill payments (eg. B.Pay)
81%
Order of purchase goods and services for the business
46%
Pay for Insurance services
32%
Payroll services
30%
Pay superannuation contributions
23%
Process customer payments online via an IP Payment Gatew ay
11% 9%
Review Insurance services
3%
Run credit risk assessments on customers
8%
None of these
Base: Online Small Businesses Q: Which of the following does your company do via the Internet (please check all that apply) AMR Interactive, 2004 (n=2,722 )
General Banking and Bill Payments are the most popular of all activities conducted by connected small businesses online (with nearly 4 in 5 small businesses conducting these activities online). Payments for insurance have risen dramatically by 20% from last quarter to take the position of fourth most popular activity conducted online. This is followed by the increase of 5% for payroll services from lat quarter. Only 8% of small businesses do not perform any of these activities.
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Appendix: Questionnaire items Q1a. Is your business a subsidiary of a non-Australian based business? Yes No Q2. Does your business operate out of a household or a home office? Yes No Q3. And does your business conduct most of its day-to-day work at these premises, or away from these premises? At premises Away from premises Length of time operating Q4. How long has your business been operating? Less than 1 year 1 to less than 2 years 2 to less than 3 years 3 to less than 5 years 5 to less than 10 years 10 years or more Annual Turnover Q5. Which of the following broad categories describes your company’s annual turnover? Under $50, 000 $50, 000 to less than $100,000 $100,000 to less than $500,000 $500,000 to less than $1 million $1 million to less than $5 million $5 million to less than $10 million $10 million or more Don’t know Q6: Thinking about the next twelve months, how confident do you feel about the prospects for your own business? Extremely confidant Fairly confidant Neutral Fairly worried Extremely worried.
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Key Indicators Perceptions of own business (current) Q6a. Thinking about the current performance of your own business, do you think your business is performing… Very well Quite well Not very well Not at all well Don’t know Perceptions of own business (future) Q6b. Now thinking about the performance outlook for your own business over the next 12 months, do you think your business will perform… Better than now Worse than now No change Don’t know Perceptions of the economy (future) Q6c. Thinking more generally about the condition of the overall Australian economy over the next 12 months time, do you think it will perform? Better than now Worse than now No change Don’t know (don’t read out) Q6d. Listed below are a number of issues that your business will deal with over the next 12 months. Thinking only about your own business, please indicate your outlook for each of these issues where 1 is a very negative outlook, 2 is a somewhat negative outlook, 3 is neutral, 4 is a positive outlook and 5 is very positive outlook. (If this is not applicable to your business select 6) Sales Cash flow Business costs Profitability Competitor activity Federal Government policies Local Government policies Exchange rates Interest rates Business systems (IT, accounting) Marketing and customer relationships Business Investment Q6e. Do you expect to invest in your business in the next 6 months? Yes No
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August 2004
IF 6e(1) ASK 6f. Q6f. And in funding this investment, are you likely to use your own cash resources, raise it through borrowings or both? Fund all of it from our own resources Borrow the entire amount Combination of self-funding and borrowings Don’t know Perceptions of Government performance Q6g. How would you rate the Federal Government’s current performance in contributing to the development of small business in Australia? Please indicate below where 1 means very poor performance, 2 means poor performance, 3 means neither poor nor good performance, 4 means good performance and 5 means very good performance. If you really have no idea, then select “Don’t know”. Very poor performance Poor performance Neither good nor poor performance Good performance Very good performance Don’t know Q6g. How would you rate your State Government’s current performance in contributing to the development of small business in your region? Please indicate below where 1 means very poor performance, 2 means poor performance, 3 means neither poor nor good performance, 4 means good performance and 5 means very good performance. If you really have no idea, then select “Don’t know”. Very poor performance Poor performance Neither good nor poor performance Good performance Very good performance Don’t know Q7. Which of the following does your company do via the Internet? Please check all that apply Bill payments (eg. B.Pay) General Banking (eg. funds transfer between accounts) Payroll services Review Insurance services Pay for Insurance services Run credit risk assessments on customers Process customer payments online via an IP Payment Gateway (eg Using ANZ’s eGate) Pay superannuation contributions Order or purchase goods and services for the business
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Demographics Almost finished! We just need some general details to help us analyse responses. D1. Which state is your company predominantly based in? 1. NSW 2. VIC 3. QLD 4. SA 5. WA 6. TAS 7. NT 8. ACT D2. What is the postcode where your business is located? If you have more than one office please indicate the postcode where your business Head Quarters are based? ____________ D3. What is the main product, service or activity that your business provides? ____________ D4.
What industry does your business operate in?
Agriculture Manufacturing Electricity, gas and water supply Construction Wholesale trade Retail trade Accommodation, café and restaurants Transport and storage Communication, media and marketing services Finance and insurance Property and business services Government administration and defence Education Health and community services Cultural and recreational services Personal and other services Other (specify)
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