2018 MYOB Enterprise Insights Report Digest (The 4-Minute Read)

MYOB has just published the 2018 Enterprise Insights Report (EIR) and we want to give you a quick overview of the key takeaways.

First of all, small businesses have always been seen as the backbone of the economy in Australia.

Approximately 60% of the enterprises across the country operate as sole traders. Less than 1% of Australian businesses have more than 200 staff members.

Exploring the mid-market report will help to identify the trends and opportunities in the following areas:

• The current state of the economy;
• Pressures that are being faced;
• Employment;
• Export trends;
• Business management capability;
• Growth, innovation, and technology;
• Government support.

State of the Economy

There has been a significant amount of economic growth throughout Australia in the past 12 months.

The MYOB Enterprise Report survey identifies that there is a significant amount of confidence that the economy will continuously improve. Only 1% have said that they expect a significant decline.

There is particularly a substantial amount of growth within the mid-market. In 2017, 44% of the bigger business operators said that they experienced revenue growth. There is also expected to be growth in 2018 with over half anticipating a revenue increase in the next 12 months.

As many businesses anticipate growth, there are also some pressures that will face the industry. The demand found within the businesses will result in more skilled workers needed. Unfortunately, there is a shortage of skilled employees, which is leading to Australia offering more visas to receive workers from other parts of the globe.

The largest pressures identified by bigger businesses include finding qualified staff, competitive activity, attracting new customers, price margins and profitability, as well as late payments from customers.

Understanding Employment

Unemployment rates will be lower than ever in the coming year as a result of more Australian-based enterprises looking to employ more staff. Approximately half of the bigger business operators are planning to increase their staff as well as how much they pay their staff this year. Only 3% has said that they are looking to reduce staffing costs, according to the MYOB Enterprise Report survey.

59% of the enterprises in South Australia and the Northern Territory are anticipating paying their staff more as well as 63% of public companies.

Exploring Export Trends

It’s becoming more common to see businesses sell to other countries. Much of this has to do with the growth of e-commerce. Approximately a six the bigger businesses are selling offshore. 16% of the respondents in the MYOB Enterprise Report survey identified themselves as exporters.

As far as the top exporters, it includes 29% being from public companies, 23% from enterprises earning between $5 million and $10 million, 22% from family-owned businesses and another 21% from manufacturing and mining enterprises.

Asia has become a significant focus in trade destinations though there is also a significant amount of activity to the US and North America.

Reviewing Business Management Capability

A layer of executive management is being added to many bigger businesses. This includes introducing a board of directors. Approximately 41% of enterprise owners have said that they are implementing business strategy and 26% are making decisions using a Board of Directors.

At this point, 41% of major business decisions are still being made by the owner, 26% from a board of directors, 24% from a management team, 20% from CEO, and 17% from a general manager.

Throughout 2018, it’s likely to see more Australian businesses create a Board of Directors.

Looking at Growth, Innovation, & Technology

Many businesses are looking at their long-term goals, including growth and the ability to maintain their current market status. In many instances, enterprises are defining their success using profitability as opposed to growth or customer satisfaction. Only approximately 15% of enterprises are captivating by growth and 16% by customer satisfaction.

Research and development have proven to be a low priority for mid-sized enterprises. 31% of enterprises don’t have a budget for research, development, and innovation and 22% dedicate less than 1% of their revenue towards it.

Additionally, many enterprises are not ready for the digital transformation. In terms of what technology will have the greatest impact on the industry, respondents have identified that things as Internet connectivity, cloud computing, automation and robotics and the Internet of Things to be the most impactful.

Support from the Government

In terms of government support, it’s lacking according to enterprise operators. Only 14% of respondents believe that Canberra is providing the necessary support to businesses.

The main suggestion is for the government to reduce the amount of taxes that are paid by operators. 41% believe there should be a reduction in tax while 24% believe that the government should focus on investing in education and training.

Summary

While many businesses are getting ready to see a significant amount of growth as a result of the economic stability, many are in need of focusing on their structure.

Profitability shouldn’t be the only factor to measure success. It is also imperative that many businesses explore their use of technology to ensure that they are capable of maximizing staff productivity while enhancing the customer experience.

Learn more about the MYOB Enterprise Resource Planning offering and the best way to leverage technology for business growth by contacting Leverage Technologies today.