Old headaches return for SMEs as pandemic pressure subsides
Past business pressures are returning to small and medium sized enterprises as the effects of the COVID-19 pandemic begin to subside, according to a new report from MYOB.
The MYOB Business Monitor, which is based off research into more than 1000 SME owners and operators, found the pressure on SMEs from economic decline due to COVID-19 is felt by 35% of SMEs, down 20 percentage points compared to this time last year. However past pressures are creeping back to pre-pandemic levels with some increasing 6% in the past six months.
The research found top business concerns to be cashflow and the cost of utilities, felt by 32% of respondents. The greatest increases include access to finance, a pressure for 26% of respondents up from 20% in December and late payments from customers increased to 29% from 25%.
"As some businesses return to normality traditional business concerns are creeping back in," says Emma Fawcett, MYOB general manager SME.
"It's an unfortunate return to business as usual for the country's 2.29 million SMEs with 14 of the 16 business pressures measured by the MYOB Business Monitor increasing in the last six months," she says.
"This demonstrates that as COVID-19 pressure subsides other business pressures increase."
The research shows SME concerns with payment times and old bugbears associated with physical presence such as utilities like electricity and gas are back on the table.
"It seems these issues were temporarily superseded during the pandemic but are increasingly back on the radar now for many SMEs," says Fawcett.
The research found overall business owners are feeling positive about the year ahead, with 57% predicting an uplift in the economy and almost half (48%) predicting their revenue will be up a year's time.
The latest Business Monitor shows a marked difference in confidence for the coming year by industry, with 78% of Finance and Insurance SMEs predicting the economy will improve in the next 12 months, compared to a national average of 57%. Retail and Hospitality are at the other end of the spectrum with only 46% predicting uplift.
In the next 12 months SMEs are looking to increase the prices and margins on what they sell (30%), retaining customers (29%), as well as customer acquisition, employee payments and marketing/advertising online (all 28%).
"After a challenging trading year, it's encouraging to see SMEs looking to explore new revenue opportunities over the next 12 months," says Fawcett.
"It's concerning those operational pressures are on the rise as the country recovers from COVID-19, however an overall confidence in the economy as well as SME revenue, is a good sign for the sector.".