Two thirds of business owners watch revenue stagnate or fall: Survey

Almost two thirds of business owners have seen sales fall or stagnate in the last 12 months, according to a new survey by accounting software firm MYOB, although there are signs of a strong increase in activity in the coming three months.

MYOB’s Business Monitor survey of 1,000 business owners showed 35% enjoyed revenue increases, while 22% saw revenue fall and 39% said revenue had not changed (the remaining respondents didn’t know).

However, MYOB chief Tim Reed says there is a major positive to come out of the report – it is the first time in 15 months that the number of respondents reporting an increase has outweighed those reporting falling sales.

“It’s a great tipping point,” Reed says, although he admits conditions remain patchy.

“If you think back through that period, that really went back right into the tail end of the GFC. While the economy overall managed to move through the GFC in much better than most other, a number of businesses found that trading conditions continue to be difficult.”

However, the report suggests conditions are starting to turn. Just under 50% of business owners said they had were seeing more work in their sales pipelines for the next three months, with 58% of medium business owners (20-199 employees) and 53% of small business owners (five-19 employees) looking forward to higher sales.

In addition, 47% of business owners said they expected revenue to increase in the next 12 months, with confidence highest at the medium end of the sector.

“All of those things are lining up, and the expected positive outcomes are based on real trading conditions,” Reed says.

“It’s not just optimism based on things they are reading in the newspapers.”

Examining the data on a sector-by-sector basis, the agribusiness sector has the strongest outlook for the next three months, with 59% of business owners in this industry reporting more work in the immediate sales pipeline.

Reed says it is also positive to see that the finance and insurance sector and the professional and business services sector are upbeat, with 49% and 52% of business owners in these respective sectors tipping more work in the next three months.

“Those are real bellwethers for the Australian economy,” he says.

One worrying sign from the survey concerns the size of the businesses that responded and their relative confidence and sales levels – the smaller you are, the more difficult things are.

“As we went from medium to small to micro to sole traders, most of the metrics declined,” Reed says.

“The one tale of caution to take out of this is that really small businesses are still not sharing the same level of confidence.”