The adoption of digital tools is no longer a ‘nice to have’ but a critical business decision for SMEs, says MYOB CEO Greg Ellis, following the release of the latest MYOB Business Monitor Report.
MYOB’s biannual survey of Australian small business owners found those who were digitally savvy were the best equipped to survive the pandemic and most likely to have an optimistic outlook for the year ahead.
Digital natives leading the way
Gen Y business owners (aged 25-39) are the most positive, with five in ten (53 per cent) expecting more profit in the next 12 months. They are also the group most likely to be digitally enabled, with 84 per cent having either a website, social media presence or both for their business.
“Digital enablement is essential for the current and future success of SMEs. Many businesses would not have survived 2020 without digital tools as they became the only way to connect with customers, colleagues and communities at large,” said Ellis.
“2020 proved that we have to stop treating digitisation as a future state. Yet MYOB’s Business Monitor survey has shown us that 34 per cent of respondents still don’t have any online presence. This needs to change, and it’s why we’re calling for digital incentives, such as rebates, for SaaS adoption to be introduced for businesses to encourage them to get online.”
The biannual report found digital adoption seems to go hand-in-hand with the profitability of a business’s bottom line. Gen Y businesses outstripped the profits of other generations’ businesses by over a third. (40 per cent compared to the national average of 26 per cent).
Overall, 35 per cent of all respondents moved more of their business online after COVID-19 hit. Eighty-three per cent of those who did say it helped their business stay afloat during the pandemic. One in 4 SMEs surveyed intend to double-down on digital, by providing more products and services for sale online in the year ahead.
Business confidence lifts
Despite the challenges 2020 presented to small business owners confidence is rising. Forty-eight per cent of those surveyed believe the Australian economy will improve in the next 12 months, more than double the 21 per cent who held this view in June 2020.
Still, close to half those surveyed are still feeling the effects of the pandemic with 44 per cent of businesses indicating revenue is down compared to this time last year and 21 per cent anticipating it will be down in another 12 months.
However, there seems to be a sense of optimism. One in five businesses owners believe they’ve turned a corner. 43 per cent expect profitability to increase over the coming 12 months. Just over a fifth (22 per cent) say they will feel the disruption of COVID-19 for another six months at most.
Keeping customers happy
The report found customer retention is a top priority for business owners in 2021. To help them achieve this, 27 per cent plan to increase their investment in this area. Other investments set to rise are prices and margins on products and services sold, and the sales of products and services online (both at 25 per cent). Fifteen per cent of SMEs expect to increase their investment in full-time employees and 18 per cent expect to increase their investment in part-time or casual employees.
“The latest Business Monitor findings show it’s more important than ever for business owners to be digitally enabled, and online businesses have the best chance at success. Many of the pressures felt by Australian small businesses – such as attracting new customers or managing utilities or profitability – can be eased through technology-driven solutions.
“Digitisation is not just about using social media or designing a smart website. It’s about capitalising on the efficiencies and insights that digital technology can provide in terms of productivity, accuracy and making smarter business decisions,” Ellis concluded.
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