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Kiwi SMEs win out over Aussie counterparts

26 Jan 2016

Small businesses in New Zealand are out-performing their Aussie counterparts when it comes to revenue and technology investment, according to the recent MYOB Business Monitor.

MYOB's survey, which looked at 1,000 SME operators in each country, found that Australia’s SME economy fell behind New Zealand’s over the course of 2015.

In the second half of the year, the proportion of Australian SME operators reporting a fall in revenue (30%) significantly outweighed those who saw a rise in revenue in the 12 months prior to the survey (22%).

In contrast, 31% of New Zealand SMEs reported a revenue rise in 2015 and 25% saw their revenues decline.

Tim Reed, MYOB CEO, says that the relative performances in the two country’s SME economies over the previous 12 months have had a major impact on how confident local business operators are going into 2016.

“Both countries reported a healthy level of steady income, with 46% of Australian SMEs and 41% of New Zealand SMEs saying their revenue levels remained constant over the 12 months,” says Reed.

“However, given the solid performance of New Zealand’s SME businesses in 2015, it is no surprise that operators are also more optimistic about improving their performance this year,” he says.

When asked how they expected their business revenue to fare in 12 months’ time, a large number of New Zealand operators are forecasting growth (34%), while fewer (21%) expect revenue to fall.

In comparison, the Australian SME economy is more finely balanced, with 28% of Australian operators expecting a revenue increase this year and 27% a decline.

The MYOB Business Monitor found that while Australian SMEs are investing in employment, NZ SMEs are focusing more on technology.

Almost half (47%) of New Zealand respondents said they had acquired computer hardware or software for their business in the last 12 months. This is compared to the under one third (31%) of Australian respondents who said the same.

In addition, 25% of New Zealand business operators said they would look to increase their investment in IT systems and processes in the 12 months following the survey, while 21% of Australians plan to do so.

“It is fantastic to see small business owners on both sides of the Tasman making strategic investments in their business.

“And while increasing employment opportunities and spending on traditional methods of marketing can aid business growth, technology in particular should be a key focus.

“By embracing new technologies SMEs can experience benefits such as improved productivity and efficiency, greater ability to reach and interact with customers, and having access to real-time information to support better decision making,” says Reed.

“Over the six years that we have been tracking the use of technology in small and medium sized businesses, we can confidently say that those businesses who are utilising technology to its fullest are doing better across every performance measure,” he says.

“With technology making it even easier than ever before to do business on a global scale, and trading with international markets high on the agenda for many countries, it no longer matters which side of ‘the ditch’ SME operators do business on. 

"What should be a priority for small and medium sized businesses is making the most of the opportunities that technology can provide in order to remain competitive and grow,” he says.

On the flipside, when it comes to employment, the survey revealed Australian small business owners have more of a focus than their counterparts across the Tasman.

“Given the revenue reports and expectations of Australian SME operators, it is understandable that they would be looking to invest further in marketing and advertising in 2016, however we were surprised to find that they were also still more likely to be creating employment opportunities than their trans-Tasman counterparts,” says Reed.

According to the report, 19% of Australian small business operators expect to increase the number of part time or casual staff they employ in 2016.

This was compared to only 11% of New Zealand small business operators who said the same.

The number of full time roles is also expected to increase significantly in Australia, with 14% of operators expecting to hire more permanent staff, while in New Zealand that number is only 9%.

Furthermore, Australian SMEs are also more likely to spend more on marketing and advertising their business, with 23% planning to increase their spending online and 18% offline.

This is compared to 19% of New Zealand SMEs increasing their marketing and advertising online, and 13% offline.

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