MYOB Australian Small Business Survey

Transcription

1 MYOB Australian Small Business Survey December 2007 Small Business Survey Report Prepared for MYOB Australia MYOB Contact: Naomi Helleren Tel: (03) Web: Address: 12 Wesley Crt, Burwood East, VIC

2 Table of Contents Table of Contents... 2 List of Tables and Figures... 3 About the Study... 4 Perceptions of Own Business (Current)... 6 Confidence in Future Business Prospects... 7 Perceptions of Own Business (Future)... 8 Factors Underpinning Expectations for Business Performance... 9 Outlook for Specific Business Issues (Positive) Outlook for Specific Business Issues (Negative) Outlook for Business Revenue Expectations for Increases in Business Revenue Expectations for Decreases in Business Revenue Expectation of Investing in Own Business Source of Funding for Investment in Own Businesses Intention of Employing or Reducing Staff Expectations for Employment Preferred Method of Recruitment Type of Employees Main Customer Distribution of Business Expenses Expectations for Future Economic Performance Perceptions of State Government Performance Appendix 1 Sample Demographics Appendix 2 Confidence in Business & Economy Outlook Appendix 3 Perceptions of Current and Future Business Performance Appendix 4 Positive & Negative Outlook for Specific Business Issues Appendix 5 Perceptions of State Government Performance Appendix 6 Questionnaire Items

3 List of Tables and Figures Figure 1: Perceptions of current business performance (%)...6 Figure 2: Confidence in business prospects over the next 12 months (%)...7 Figure 3: Performance outlook for own business over the next 12 months (%)...8 Table 1: Factors underpinning small businesses expectations for future business performance (%)...9 Figure 4: Small businesses with positive outlook on specific issues (%)...10 Figure 5: Small businesses with negative outlook on specific issues (%)...11 Figure 6: Outlook for own business revenue in the next 12 months (%)...12 Figure 7: Percentage of increases in own business revenue in the next 12 months (%)...14 Figure 8: Percentage of decreases in own business revenue in the next 12 months (%)...15 Figure 9: Expectation of investing in own business in the next 6 months (%)...16 Table 2: Source of funding for investment in small business (%)...17 Figure 10: Expectation of hiring or reducing employees within the next 12 months (%)...18 Figure 11: Number of employees intended to hire over the next 12 months (%)...20 Figure 12: Method of seeking employees (%)...21 Table 3: Type of employees of small businesses (%)...22 Figure 13: Type of customers of small businesses (%)...23 Table 4: Distribution of overall expenses on different areas (%)...24 Figure 14: Performance outlook for the Australian economy over the next 12 months (%).25 Figure 15: State Government s contribution to the development of small business in Australia (%)...26 Figure 16: Small businesses confidence in business prospects and expectations for the economic performance over 12 months time...29 Figure 17: Small businesses perceptions of their current and future business performance...30 Figure 18: Proportion of small businesses with POSITIVE outlook for specific business issues over the next 12 months...31 Figure 19: Proportion of small businesses with NEGATIVE outlook for specific business issues over the next 12 months...31 Figure 20: Small businesses perceptions of the State Governments performance in contributing to the development of small business in Australia

4 About the Study This report presents the summary findings for key indicators from the MYOB Australian Small Business Survey comprising a national sample of 1,997 small business proprietors and general managers, conducted between October and November The small businesses participating in the survey are defined as both non-employing and employing businesses with less than 20 employees. Results have been weighted to reflect the small business population distribution according to the Australian Bureau of Statistics (ABS) for company size, length of time operating, region and selected ANZSIC Industry divisions (refer to ABS publications Characteristics of Small Business, , 2001 and Small Business in Australia, 1321, 2001). The key indicators presented in this report include: Small Business Issues: Perceptions of current business performance Confidence in future business prospects Expectations for future business performance and factors underpinning the expectation Outlook for specific business issues such as sales, cash flow, business costs and other issues Outlook for business revenue Likelihood to invest in own business within the next 6 months, and the likely source of funding Expectation of employing or reducing staff in the next 12 months Ways of finding employees Composition of small businesses workforce Small businesses main customers Distribution of business expenses Government Issues: Perceptions of the Australian future economy Perceptions of the State Government performance in contributing to small business development in Australia 4

5 The findings of the research are reported by industry type: Industry Sample Agriculture 113 Manufacturing 122 Construction 233 Wholesale Trade 86 Retail Trade 281 Accommodation, Café and Restaurants 63 Transport and Storage 103 Communication, Media and Marketing Services 91 Finance and Insurance 151 Property and Business Services 256 Education 69 Health and Community Services 122 Cultural and Recreational Services 50 Personal and Other Services 183 Information & Communications Technology 65 Tourism 9* Total 1997 Note: * Tourism is included in the total statistics reported but is not reported at an industry level due to a low sample size. The findings are also reported by state for some questions: State Sample NSW 613 VIC 476 QLD 453 SA 151 WA 189 TAS 53 NT 22* ACT 40* Total 1997 Note: *Sample sizes for NT and ACT are too small for reliable statistics at a State level, but are included in the total figures. 5

6 Perceptions of Own Business (Current) Over three quarters of small businesses believe they are performing well Figure 1: Perceptions of current business performance (%) Very Well/Quite Well Nov 07 Jul 07 Apr 07 Total 13% 64% 77% 74% 76% Health and community services 22% 61% 83% 77% 85% Wholesale trade 18% 56% 74% 75% 69% Property and business services 17% 70% 87% 79% 84% Finance and insurance 15% 70% 85% 83% 82% Transport and storage 15% 69% 84% 81% 79% Education 14% 69% 83% 75% 85% Accommodation, cafe and restaurants 14% 65% 79% 78% 77% Construction 12% 70% 82% 81% 76% Communication, media and marketing services 12% 59% 71% 72% 81% Manufacturing 12% 53% 65% 78% 75% IT/Information & Communications Technology 10% 62% 72% 69% 72% Agriculture 10% 59% 69% 63% 70% Retail trade 9% 61% 70% 65% 65% Personal and other services 8% 65% 73% 65% 81% Cultural and recreational services 2% 55% 57% 76% 74% Very w ell Quite w ell Base: Online small businesses Q: Thinking about the current performance of your own business, do you think your business is performing very well, quite well, not very well, not at all well, don t know? AMR Interactive, November 2007 (n=1997) More than three quarters (77%) of small businesses rated their current business performance positively (ie: very well and quite well combined), which has slightly increased since last quarter (74% in July). By industry, small businesses from the Property and Business Services sector (87%) were most likely to perceive their current business to be performing very/quite well, while those from the Cultural and Recreational Services sector (57%) were least likely. Amongst all industries, the Cultural and Recreational Services sector has seen the largest decrease in the proportion of small businesses that had a positive perception of their business since the previous quarter (76% in July, down 19% to 57% in November). This is followed by the Manufacturing industry (78% in July, down 13% to 65% in November). 6

7 Confidence in Future Business Prospects Three in four small businesses are confident about their prospects Figure 2: Confidence in business prospects over the next 12 months (%) Extremely Confident/ Fairly Confident Nov 07 Jul 07 Apr 07 Total 24% 52% 76% 77% 76% Property and business services 34% 54% 88% 81% 86% Finance and insurance 32% 56% 88% 82% 81% Education 32% 50% 82% 85% 77% Personal and other services 30% 47% 77% 72% 78% Health and community services 29% 52% 81% 80% 81% Construction 26% 53% 79% 79% 79% Accommodation, cafe and restaurants 24% 54% 78% 82% 82% Manufacturing 22% 41% 63% 80% 79% Wholesale trade 21% 58% 79% 87% 77% Communication, media and marketing services 21% 54% 75% 74% 78% IT/Information & Communications Technology 20% 49% 69% 75% 87% Retail trade 19% 53% 72% 75% 64% Transport and storage 18% 60% 78% 79% 82% Agriculture 15% 48% 63% 63% 59% Cultural and recreational services 14% 59% 73% 82% 75% Extremely Confident Fairly confident Base: Online small businesses Q: Thinking about the next twelve months, how confident do you feel about the prospects for your own business? AMR Interactive, November 2007 (n=1997) Around three quarters of small businesses (76%) are confident about their business prospects over the next 12 months, with around a quarter (24%) expressing that they are extremely confident. This reflects a consistent trend from previous quarters (76% in April and 77% in July). By Industry, the Property and Business Services sector (88%) and the Finance and Insurance sector (88%) expressed the most confidence in their business prospects. Small businesses from the Agriculture sector (63%) and the Manufacturing sector (63%, a drop of 17% from 80% in July) are least confident about their business prospects. 7

8 Perceptions of Own Business (Future) Around two thirds of small businesses forecast better performance Figure 3: Performance outlook for own business over the next 12 months (%) Better Than Now Nov 07 Jul 07 Apr 07 Total 65% 65% 66% 64% Wholesale trade Retail trade Cultural and recreational services Personal and other services Property and business services Finance and insurance Health and community services Accommodation, cafe and restaurants Education Construction Communication, media and marketing services Transport and storage Manufacturing IT/Information & Communications Technology Agriculture 82% 70% 70% 70% 69% 68% 68% 65% 65% 64% 63% 59% 58% 56% 51% 82% 83% 75% 70% 73% 66% 70% 74% 69% 70% 67% 66% 69% 73% 62% 68% 68% 68% 68% 60% 67% 65% 59% 74% 65% 68% 72% 64% 60% 55% 63% 67% 68% 59% 52% 66% 58% 65% 65% 56% 69% 71% 51% 58% 60% Better than now Base: Online small businesses Q: Now thinking about the performance outlook for your own business over the next 12 months, do you think your business will perform better than now, worse than now, no change, don t know? AMR Interactive, November 2007 (n=1997) Overall, around two thirds (65%) of small businesses expect their business performance to be better in 12 months time than it is now, indicating a stable trend since the previous quarters. By Industry, small businesses from the Wholesale Trade sector (82%) were most likely to forecast better performance of their business over the next 12 months, with those from the Agriculture industry being least likely (51%, a decrease of 9% from 60% in April). The Construction industry has seen a continuous increase in the proportion of small businesses that are optimistic about their future performance (64% in November, increased by 9% from 55% in April). 8

9 Factors Underpinning Expectations for Business Performance Consumer/end user trends and petrol prices the main factors Table 1: Factors underpinning small businesses expectations for future business performance (%) Factor Expectation for Future Business Performance Better than now (n=1322) Worse than now (n=92) No Change (n=501) Current tax levels 8% 15% 20% Future proposed tax changes - going up 3% 11% 5% Future proposed tax changes - going down 12% 1% 3% Petrol prices too high 8% 45% 33% Petrol prices forecast reduction 4% 1% 1% Employment market favourable for employers 7% 3% 2% Lack of available trained workers to draw on 9% 17% 16% Increase in Government investment in my industry 6% 2% 2% Decrease in Government investment in my industry 1% 9% 5% Increase in competitive activity 19% 30% 29% Decrease in competitive activity 12% 1% 4% Organic growth of my industry is increasing 42% 1% 5% Decline in growth rate of my industry 2% 28% 19% Consumer/end user trends changing favourably 52% 4% 9% Consumer/end user trends changing unfavourably 2% 37% 17% Drought/weather impact 1% 23% 3% Other 8% 18% 11% Base: Online small businesses who expect their business to be better than now, worse than now or have no change Q: You mentioned that you expect your business to be better than now, be worse than now OR have no change over the next 12 months, what are the factors underpinning your expectation? (Multiple choices) AMR Interactive, November 2007 The top two reasons for small businesses to believe that their business would perform better over the next 12 months were: consumer/end user trends changing favourably (52%) and organic growth of my industry is increasing (42%). On the other hand, the major factors underpinning small businesses expectation of worse business performance in 12-months time were: petrol prices too high (45%), consumer/end user trends changing unfavourably (37%) and increase in competitive activity (30%). These results are consistent with the results from the previous quarters (refer to the MYOB Small Business Survey Indicator Report in April and July 2007). 9

10 Outlook for Specific Business Issues (Positive) Small businesses are most optimistic about sales Figure 4: Small businesses with positive outlook on specific issues (%) Very Positive/Positive Nov 07 Jul 07 Apr 07 Sales 32% 39% 71% 70% 72% Cash flow 23% 41% 64% 62% 61% Marketing and Customer Relationships 21% 38% 59% 59% 57% Profitability 20% 42% 62% 63% 63% Business Costs 7% 24% 31% 28% 28% Competitor Activity 7% 17% 24% 28% 24% Business Systems (IT, accounting) 5% 26% 31% 33% 33% Exchange Rates 3% 12% 15% 12% 8% Federal Government Policies 3% 10% 13% 14% 11% Local Government Policies 2% 7% 9% 8% 8% Interest Rates 1% 7% 8% 12% 11% Very Positive Positive Base: Online Small Businesses Q: Listed below are a number of issues that your business will deal with over the next 12 months. Thinking only about your own business, please indicate your outlook for each of these issues where 1 is a very negative outlook, 2 is a somewhat negative outlook, 3 is neutral, 4 is a somewhat positive outlook and 5 is a very positive outlook. (If this is not applicable to your business, select 6) AMR Interactive, November 2007 (n=1997) Small businesses were asked to rate their outlook for specific business issues (eg: sales, cash flow, business costs, etc) over the next 12 months. There have been no significant changes since the previous quarters (April and July 2007). Sales (71%) outlook continues to be rated most positively by small businesses, followed by cash flow (64%) and profitability (62%). 10

11 Outlook for Specific Business Issues (Negative) Two fifths of small businesses are concerned about interest rates Figure 5: Small businesses with negative outlook on specific issues (%) Very Negative/Negative Nov 07 Jul 07 Apr 07 Interest Rates 6% 34% 40% 29% 31% Local Government Policies 5% 17% 22% 22% 23% Federal Government Policies 4% 17% 21% 21% 20% Business Costs 3% 23% 26% 25% 25% Competitor Activity 2% 14% 16% 16% 17% Cash flow 2% 10% 12% 13% 13% Profitability 2% 12% 14% 12% 13% Exchange Rates 2% 9% 11% 11% 10% Sales 1%5% 6% 5% 7% Business System (IT, accounting) 1%4% 5% 5% 4% Marketing and Customer Relationships 2% 3% 3% 2% Very Negative Negative Base: Online Small Businesses Q: Listed below are a number of issues that your business will deal with over the next 12 months. Thinking only about your own business, please indicate your outlook for each of these issues where 1 is a very negative outlook, 2 is a somewhat negative outlook, 3 is neutral, 4 is a somewhat positive outlook and 5 is a very positive outlook. (If this is not applicable to your business select 6) AMR Interactive, November 2007 (n=1997) Interest rates continue to be the main concern for small businesses. Two in five (40%) small business owners indicated a negative outlook for interest rates over the next 12 months, which is a significant increase since the previous quarters (29% in July and 31% in April). Around one-fifth of small businesses rated Government policies negatively (22% for Local Government Policies and 21% for Federal Government Policies), which reflects a consistent trend over the last two quarters. 11

12 Outlook for Business Revenue Around two thirds of small businesses expect their revenue to increase Figure 6: Outlook for own business revenue in the next 12 months (%) Overall Remain unchanged 22% Decrease 7% Don't know 5% Increase 65% Breakdown by State (% of respondents saying Increase ) Total 65% Nov 07 Jul 07 Apr 07 65% 67% 64% QLD 71% 71% 70% 69% WA 67% 67% 66% 63% SA 65% 65% 66% 65% VIC 64% 64% 65% 64% NSW 61% 61% 64% 62% TAS 60% 60% 75% 60% 12

13 Breakdown by Industry (% of respondents saying Increase ) Total 65% Nov 07 Jul 07 Apr 07 65% 67% 64% Education Health and community services Wholesale trade Property and business services Personal and other services Communication, media and marketing services Cultural and recreational services Finance and insurance Retail trade Construction Accommodation, cafe and restaurants Transport and storage IT/Information & Communications Technology Manufacturing Agriculture 77% 73% 72% 72% 71% 70% 70% 69% 68% 63% 63% 61% 59% 58% 48% 77% 71% 64% 73% 64% 69% 72% 82% 74% 72% 73% 65% 71% 68% 68% 70% 67% 68% 70% 72% 72% 69% 70% 77% 68% 72% 67% 63% 64% 59% 63% 68% 79% 61% 56% 57% 59% 71% 67% 58% 65% 63% 48% 51% 54% Base: Online small businesses Q: Do you expect your business revenue to increase, decrease or remain unchanged in the next 12 months? AMR Interactive, November 2007 (n=1997) Overall, two in three (65%) small businesses expect their business revenue to increase over the next 12 months, which is consistent with the last two quarters (67% in July and 64% in April 2007). By Industry, small businesses from the Education sector were most likely to forecast an increase in their business revenue (77%, an increase of 13% from 64% in April). The Accommodation, Café and Restaurants industry has seen a continuous decrease in the proportion of small businesses expecting their revenue to increase since April (79%, down 16% to 63% in November). By State, small businesses from Queensland were most likely be optimistic about their business revenue, with 71% of the businesses surveyed forecasting an increase in their revenue in the next 12 months. 13

14 Expectations for Increases in Business Revenue Around half of small businesses expect their revenue to increase by more than 10% Figure 7: Percentage of increases in own business revenue in the next 12 months (%) Expect Revenue to Increase Nov 07 Jul 07 Apr % 19% 19% 18% 19% 51% 6-10% 32% 32% 34% 32% 11-15% 15% 15% 12% 15% 48% 16-20% 13% 13% 13% 12% More than 20% 20% 20% 24% 22% Base: Online small businesses that expect their revenue to increase in the next 12 months Q: How much do you expect your revenue to increase in the next 12 months? AMR Interactive, November 2007 (n=1338) Of the small businesses that forecast an increase in their business revenue over the next 12 months, around half (48%) expect the increase to be more than 10% (ie: 11-15% and 16-20% and more than 20% ). Around a fifth (20%) of small businesses that expected their revenue to increase believed the increase would be more than 20%. These results are consistent with the results from the last two quarters (July and April 2007). 14

15 Expectations for Decreases in Business Revenue Few small businesses expect their revenue to decrease largely Figure 8: Percentage of decreases in own business revenue in the next 12 months (%) Expect Revenue to Decrease Nov 07 Jul 07 Apr % 11% 11% 12% 12% 38% 6-10% 27% 27% 29% 33% 11-15% 11% 11% 15% 15% 63% 16-20% 29% 29% 15% 17% More than 20% 23% 23% 28% 22% Base: Online small businesses that expect their revenue to decrease in the next 12 months Q: How much do you expect your revenue to decrease in the next 12 months? AMR Interactive, November 2007 (n=140) As with the previous quarter, very few small businesses reported that they forecast a decrease in their business revenue over the next 12 months (7% of total, refer to Fig. 6). Of these businesses, 63% expected the decrease to be more than 10%. 15

16 Expectation of Investing in Own Business Over half of small businesses expect to invest in their own business Figure 9: Expectation of investing in own business in the next 6 months (%) Expect to Invest Nov 07 Jul 07 Apr 07 Total 55% 55% 57% 55% Construction Retail trade Cultural and recreational services Agriculture Manufacturing Finance and insurance Wholesale trade Property and business services Accommodation, cafe and restaurants Health and community services IT/Information & Communications Technology Transport and storage Education Personal and other services Communication, media and marketing services 60% 60% 57% 57% 55% 55% 55% 54% 54% 52% 52% 49% 49% 48% 42% 60% 48% 50% 60% 61% 59% 57% 54% 65% 57% 63% 56% 55% 55% 54% 55% 59% 59% 55% 70% 69% 54% 60% 52% 54% 67% 67% 52% 51% 51% 52% 60% 58% 49% 50% 53% 49% 54% 40% 48% 53% 52% 42% 54% 57% Expect to invest Base: Online small businesses Q: Do you expect to invest in your business in the next 6 months? (Yes/No) AMR Interactive, November 2007 (n=1997) Overall, more than half (55%) of small businesses expect to invest in their own business within the next six months. This has been relatively stable over the last two quarters (57% in July and 55% in April). By industry, small businesses from the Construction sector (60%, up 12% from 48% in July) and the Retail Trade sector (60%) were most likely to invest in their business, while those from the Communication, Media and Marketing Services industry were least likely (42%, down 15% from 57% in April). 16

17 Source of Funding for Investment in Own Businesses Over half of small businesses will fund investment completely from their own resources Table 2: Source of funding for investment in small business (%) Fund all of it from own resources Borrow the entire amount Combination of self funding and borrowings Nov 07 Jul 07 Apr 07 Nov 07 Jul 07 Apr 07 Nov 07 Jul 07 Apr 07 Total 58% 55% 57% 6% 5% 6% 33% 35% 33% Agriculture 57% 45% 48% 4% 6% 6% 39% 47% 37% Manufacturing 59% 42% 49% 2% 10% 7% 37% 41% 44% Construction 55% 56% 62% 10% 5% 7% 32% 37% 30% Wholesale trade 63% 52% 41% 7% 5% 6% 28% 42% 47% Retail trade 53% 67% 55% 2% 7% 6% 40% 24% 36% Accommodation, cafe and restaurants 41% 45% 34% 9% 12% 12% 45% 35% 44% Transport and storage 48% 38% 52% 16% 10% 17% 35% 52% 25% Communication, media and marketing services 83% 59% 68% 4% 7% 0% 13% 28% 24% Finance and insurance 68% 63% 52% 2% 5% 12% 29% 28% 33% Property and business services 62% 52% 63% 5% 3% 1% 29% 39% 34% Education 65% 62% 79% 6% 3% 2% 28% 28% 12% Health and community services Cultural and recreational services Personal and other services IT/Information & Communications Technology 54% 48% 50% 11% 7% 4% 29% 35% 38% 69% 77% 61% 2% 0% 4% 28% 18% 30% 64% 64% 63% 0% 4% 7% 26% 21% 23% 76% 82% 93% 0% 0% 0% 15% 18% 7% Base: Online small businesses that expect to invest in their business in the next 6 months Note: Don t know responses are not shown in the table. Q: And in funding this investment, are you likely to use your own cash resources, raise it through borrowings or both? AMR Interactive, November 2007 (n=1106) Continuing the trend from the previous quarters, over half (58%) of small businesses are likely to completely self-fund future investment in their business, while very few businesses (6%) are likely to borrow the entire amount. By Industry, the Communication, Media and Marketing Services sector are most likely to fund investment completely from their own resources (83%, up 24% from 59% in April). Small businesses from the Transport and Storage industry (16%) were most likely to borrow the entire amount to invest in their own business. 17

18 Intention of Employing or Reducing Staff Over a quarter of small businesses intend to hire Figure 10: Expectation of hiring or reducing employees within the next 12 months (%) I am a sole trader and do not intend to hire 41% Don't know 4% Overall Hire more employees 27% Reduce employees 2% Neither hire nor reduce 26% Total WA SA QLD NSW VIC TAS Breakdown by State (% of respondents saying hiring employees ) 18% 23% 27% 26% 32% 30% 29% Nov 07 Jul 07 Apr 07 27% 23% 24% 32% 17% 25% 30% 23% 22% 29% 26% 24% 26% 24% 23% 23% 24% 24% 18% 11% 15% 18

19 Breakdown by Industry (% of respondents saying hiring employees ) Total 27% Nov 07 Jul 07 Apr 07 27% 23% 24% Accommodation, cafe and restaurants Wholesale trade Health and community services Property and business services Construction Cultural and recreational services Retail trade Finance and insurance Education Communication, media and marketing services Manufacturing IT/Information & Communications Technology Transport and storage Personal and other services 39% 35% 32% 31% 31% 29% 27% 23% 23% 22% 22% 22% 21% 20% Agriculture 14% Base: Online small businesses Q: Do you intend to hire or reduce employees within the next 12 months? 39% 31% 44% 35% 29% 21% 32% 25% 23% 31% 26% 19% 31% 27% 30% 29% 22% 22% 27% 21% 23% 23% 24% 29% 23% 28% 21% 22% 18% 20% 22% 25% 32% 22% 12% 29% 21% 23% 27% 20% 15% 17% 14% 16% 13% AMR Interactive, November 2007 (n=1997) Over a quarter (27%) of small businesses indicated an intention to employ more staff members within the next 12 months, which is slightly higher than the previous quarters (23% in July and 24% in April). By Industry, the Accommodation, Café and Restaurants sector (39%) was most likely to employ, while the Agriculture sector (14%) was least likely. The Wholesale Trade sector has seen the largest increase in the proportion of small businesses that intend to employ staff since April 2007 (21% in April, increased by 14% to 35% in November). This is followed by the Property and Business Services sector (19% in April, increased by 12% to 31% in November). In general, very few (2%) small businesses intended to reduce staff numbers in the next 12 months. 19

20 Expectations for Employment Most small businesses intend to hire two employees or less Figure 11: Number of employees intended to hire over the next 12 months (%) Expect to Employ Nov 07 Jul 07 Apr 07 76% 1 employee 39% 39% 35% 42% 2 employees 37% 37% 41% 34% 3 employees 11% 11% 10% 11% 4 employees 4% 4% 4% 4% 5 employees or more 9% 9% 10% 9% Base: Online small businesses that expect to hire more employees in the next 12 months Q: How many employees do you intend to hire in the next 12 months? AMR Interactive, November 2007 (n=590) Of the small businesses that expect to employ within the next 12 months, around three quarters (76%) intended to employ one or two employees. Very few (9%) small businesses intended to hire 5 or more staff members in the next 12 months. 20

21 Preferred Method of Recruitment Over half of small businesses recruit by word of mouth Figure 12: Method of seeking employees (%) Recruitment Method Nov 07 Jul 07 Apr 07 By advertising in newspapers 31% 31% 30% 30% By advertising on the Internet 21% 21% 19% 19% Through family/friends/other employees in my company 58% 58% 57% 57% Via professional association 25% 25% 26% 27% Through recruitment agency 17% 17% 15% 16% Other 11% 11% 9% 9% Base: Online small businesses that have one or more employees Q: How do you find your employees? (Multiple responses) AMR Interactive, November 2007 (n=1351) More than half (58%) of small businesses surveyed are likely to recruit through family, friends or other employees in their company. Advertising in newspapers (31%) was another common way of seeking employees by small businesses. These results are consistent with those from the last two quarters (July and April). 21

22 Type of Employees Small business workforces consist mainly of full-time permanent employees Table 3: Type of employees of small businesses (%) Percentage of employees 0% 1%-33% 34%-66% 67%-99% 100% Total 1%-100% Type of employees Nov 07 Jul 07 Apr 07 Nov 07 Nov 07 Nov 07 Nov 07 Nov 07 Jul 07 Apr 07 Full-time permanent 28% 30% 30% 9% 16% 14% 29% 68% 66% 66% Part-time permanent 70% 70% 71% 15% 9% 0% 4% 28% 27% 24% Contract 77% 77% 78% 11% 3% 1% 7% 22% 21% 21% Casual 66% 69% 68% 14% 5% 3% 9% 31% 30% 28% Other 93% 93% 92% 0% 0% 0% 5% 5% 6% 8% Base: Online small businesses that have one or more employees Q: What percentage of your employees is full-time permanent, part-time permanent, contract, casual? AMR Interactive, November 2007 (n=1351) The workforce of small businesses is mainly composed of full-time permanent employees, with over two-thirds (68%) of businesses with employees indicating that they had one or more full-time permanent employees in their company. Around three in ten (29%) small businesses reported that all their employees were full-time permanent (ie: 100% of employees being full-time permanent). These results are consistent with those from the last two quarters (July and April 2007). 22

23 Main Customer Small businesses sell primarily to consumers/customers Figure 13: Type of customers of small businesses (%) Main Customer Nov 07 Jul 07 Apr 07 Businesses 30% 30% 27% 34% Consumers/ customers 35% 35% 38% 28% Both 33% 33% 32% 35% Other 2% 2% 1% 2% Don't know 1% 1% 2% 1% Base: Online Small Businesses Q: Does your business sell products or services primarily to other businesses or consumers/customers? AMR Interactive, November 2007 (n=1997) More than one third (35%) of small businesses sell products or services primarily to consumers/customers, indicating a consistent trend since last quarter (38% in July 2007). 30% of small businesses reported that their main customers were other businesses. 23

24 Distribution of Business Expenses Small businesses spend most on salary/wages Table 4: Distribution of overall expenses on different areas (%) Percentage of expenses 0% 1%-10% 11%-20% 21%-30% 31%-50% 51%- 100% Total 1%-100% Area of expenses Nov 07 Jul 07 Apr 07 Nov 07 Nov 07 Nov 07 Nov 07 Nov 07 Nov 07 Jul 07 Apr 07 Rent & property costs 30% 27% 29% 43% 12% 6% 4% 0% 65% 69% 68% Salary/wages 19% 19% 18% 11% 12% 14% 21% 15% 73% 74% 71% IT - software & hardware Plant equipment, furniture, materials and inventory costs Marketing, advertising & sales 12% 14% 12% 72% 8% 2% 0% 0% 82% 84% 84% 10% 12% 13% 43% 13% 9% 11% 6% 82% 84% 81% 30% 30% 29% 55% 7% 3% 2% 0% 67% 69% 68% Energy use - electricity, gas, water, oil/petrol 9% 9% 9% 65% 15% 4% 2% 1% 87% 85% 87% Research & Development costs Administrative costs - human resource management, accounting, finance 60% 59% 59% 35% 3% 0% 0% 0% 38% 39% 40% 12% 15% 13% 67% 11% 3% 2% 0% 83% 78% 81% Other 78% 79% 75% 10% 3% 2% 1% 0% 16% 17% 21% Base: Online Small Businesses Q What percentage of your overall expenses does each of the following areas account for? AMR Interactive, November 2007 (n=1997) As with the previous quarters, salary/wages comprise the highest proportion of business expenses for small businesses, accounting for more than 30% (ie: 31%-50% and 51%- 100% ) of overall expenses for 36% of small businesses surveyed. 24

25 Expectations for Future Economic Performance Around a quarter of small businesses expect the Australian economy to perform better over the next 12 months Figure 14: Performance outlook for the Australian economy over the next 12 months (%) Better Than Now Nov 07 Jul 07 Apr 07 Total 24% 24% 31% 26% Education Wholesale trade Cultural and recreational services Personal and other services Retail trade Property and business services Manufacturing Transport and storage Communication, media and marketing services Finance and insurance Health and community services Agriculture Accommodation, cafe and restaurants Construction 36% 30% 27% 27% 25% 25% 24% 24% 24% 23% 23% 22% 22% 20% 36% 31% 34% 30% 33% 30% 27% 38% 35% 27% 34% 25% 25% 31% 24% 25% 34% 28% 24% 27% 18% 24% 22% 29% 24% 30% 26% 23% 38% 28% 23% 22% 27% 22% 34% 24% 22% 22% 18% 20% 31% 26% IT/Information & Communications Technology 20% 20% 33% 25% Better than now Base: Online small businesses Q: Thinking more generally about the condition of the overall Australian economy over the next 12 months time, do you think it will perform... better than now, worse than now, no change, don t know? AMR Interactive, November 2007 (n=1997) Overall, around a quarter (24%) of small businesses expect the Australian economy to perform better over the next 12 months. This has decreased by 7% since July 2007 (31%). By Industry, small businesses from the Education sector (36%) were most likely to have an optimistic outlook for Australia s economic performance. The Finance and Insurance industry has seen the greatest decrease in the proportion of small businesses with an optimistic outlook for the Australian economy since July 2007 (38%, down 15% to 23% in November). 25

26 Perceptions of State Government Performance Negative ratings on the State Government s contribution remain high Figure 15: State Government s contribution to the development of small business in Australia (%) Very Poor/Somewhat Poor Nov 07 Jul 07 Apr 07 Total 51% 25% 14% 9% 51% 55% 55% Total by State TAS 66% 21% 10% 3% 66% 63% 66% NSW 60% 21% 9% 10% 60% 62% 66% SA 57% 19% 17% 7% 57% 53% 51% QLD 47% 26% 19% 8% 47% 47% 54% VIC 45% 29% 15% 11% 45% 54% 48% WA 45% 31% 16% 8% 45% 53% 46% Total by Industry Manufacturing 66% 21% 9% 4% 66% 55% 66% Agriculture 61% 19% 12% 7% 61% 63% 66% Transport and storage 58% 24% 12% 7% 58% 59% 57% Finance and insurance 55% 21% 15% 8% 55% 48% 53% Property and business services 54% 20% 16% 10% 54% 54% 57% Accommodation, cafe and restaurants 53% 21% 12% 14% 53% 50% 53% Construction 51% 29% 11% 9% 51% 55% 52% Retail trade 50% 26% 11% 13% 50% 54% 50% Personal and other services 49% 18% 19% 14% 49% 52% 54% Health and community services 46% 28% 18% 9% 46% 48% 46% Wholesale trade 42% 36% 13% 9% 42% 52% 64% Communication, media and marketing services 39% 25% 20% 17% 39% 53% 53% Cultural and recreational services 39% 28% 29% 4% 39% 40% 57% IT/Information & Communications Technology 36% 30% 25% 10% 36% 69% 46% Education 35% 22% 37% 6% 35% 59% 58% Very/somew hat poor Neither Very/somew hat good Don't know Base: Online small businesses Q: How would you rate the State Government s current performance in contributing to the development of small business in Australia? AMR Interactive, November 2007 (n=1997) 26

27 Continuing the trend from the previous quarters (55% in July and April), over half (51%) of small businesses surveyed perceived the State Government s performance to be very or somewhat poor. By Industry, small businesses from the Manufacturing sector (66%, an increase of 11% from 55% in July 2007) were most likely to be critical of the State Government s performance (ie: combined ratings of very poor and somewhat poor ). The Wholesale Trade industry has seen the largest decrease in small businesses rating the State Government negatively (ie: very poor and somewhat poor ) since April 2007(64%, down 22% to 42% in November). By State, small businesses in Tasmania (66%) were most likely to perceive the State Government s performance negatively (ie: very poor and somewhat poor ). 27

28 Appendix 1 Sample Demographics Gender Size of Business Male 57% Sole trader (no other employees) 41% Female 43% 1 full time employee 19% 2-4 full time employees 25% 5-9 full time employees 9% Age full time employees 6% years 7% years 22% years 30% years 27% Length of Time Business Operating years 10% Less than 1 year 14% Over 65 years 3% 1 to less than 3 years 16% 3 to less than 5 years 13% 5 to less than 10 years 19% Marital Status 10 years or more 38% Not married 9% Divorced/Separated 7% Married 68% Living with partner (de facto spouse relationship) 13% Home-Based Business Other 1% Refuse to answer 2% Businesses operating at a household/home office Businesses operating out of a household/home office 31% 69% Annual Household Income Under $40,000 10% $40,000 $59,999 13% Annual Business Turnover $60,000 $74,999 12% Under $50, % $75,000 - $99,999 17% $50, 000 to less than $100,000 19% $100,000 - $149,999 19% $100,000 to less than $500,000 31% $150,000 - $199,999 14% $500,000 to less than $1 million 12% Don t know 1% $1 million or more 13% Refuse to answer 14% Don t know 4% Base: Online small businesses AMR Interactive, November 2007 (n=1997) 28

29 Appendix 2 Confidence in Business & Economy Outlook Figure 16: Small businesses confidence in business prospects and expectations for the economic performance over 12 months time % January 2007 (n=1399) 26 April 2007 (n=1804) 31 July 2007 (n=2352) 24 November 2007 (n=1997) Proportion of small businesses that expect the Australian economy to perform BETTER over the next 12 months (%) Proportion of small businesses that are extremely or fairly confident about their business prospects over the next 12 months (%) Base: Online small businesses AMR Interactive, November

30 Appendix 3 Perceptions of Current and Future Business Performance Figure 17: Small businesses perceptions of their current and future business performance % January 2007 (n=1399) April 2007 (n=1804) July 2007 (n=2352) November 2007 (n=1997) Proportion of small businesses that expect their business performance to be BETTER THAN NOW over the next 12 months (%) Proportion of small businesses that perceive their current business performance to be very or quite w ell (%) Base: Online small businesses AMR Interactive, November

31 Appendix 4 Positive & Negative Outlook for Specific Business Issues Figure 18: Proportion of small businesses with POSITIVE outlook for specific business issues over the next 12 months % January 2007 (n=1399) April 2007 (n=1804) July 2007 (n=2352) November 2007 (n=1997) Sales Marketing and customer relationships Profitability Cash flow Figure 19: Proportion of small businesses with NEGATIVE outlook for specific business issues over the next 12 months % January 2007 (n=1399) April 2007 (n=1804) July 2007 (n=2352) November 2007 (n=1997) Interest rates Business costs Federal Government policies Local Government policies Base: Online small businesses 31

32 Appendix 5 Perceptions of State Government Performance Figure 20: Small businesses perceptions of the State Governments performance in contributing to the development of small business in Australia % January 2007 (n=1399) April 2007 (n=1804) July 2007 (n=2352) November 2007 (n=1997) Proportion of small businesses that perceive the STATE Government's performance to be POOR (%) Base: Online small businesses 32

33 Appendix 6 Questionnaire Items S1: Are you the owner, general manager, or a key decision-maker of this business? 1. Business owner 2. General manager but not a business owner 3. Key decision maker 4. Other (specify) Q. Approximately how many full time employees does the company have in Australia not including yourself? 1. No other employees apart from me (sole trader) 2. 1 full time employee 3. 2 full time employees 4. 3 full time employees 5. 4 full time employees full time employees full time employees full time employees full time employees 10. More than 100 employees Q. Is your business a subsidiary of a non-australian based business? 1. Yes 2. No Q. Does your business operate out of a household or home office? 1. Yes (GO TO Q3) 2. No (GO TO Q4) Q. And does your business conduct most of its day-to-day work at these premises, or away from these premises? 1. At premises 2. Away from premises Q. How long has your business been operating? 1. Less than 1 year 2. 1 to less than 2 years 3. 2 to less than 3 years 4. 3 to less than 5 years 5. 5 to less than 10 years years or more Q. And how long has the current owner been operating the business? 1. Less than 1 year 2. 1 to less than 2 years 3. 2 to less than 3 years 4. 3 to less than 5 years 5. 5 to less than 10 years years or more 33

34 Q. Which of the following broad categories describes your company s annual turnover? 1. Under $50, $50, 000 to less than $100, $100,000 to less than $500, $500,000 to less than $1 million 5. $1 million to less than $5 million 6. $5 million to less than $10 million 7. $10 million or more 8. Don t know KEY INDICATORS: Q: Thinking about the next twelve months, how confident do you feel about the prospects for your own business? 1. Extremely confident 2. Fairly confident 3. Neutral 4. Fairly worried 5. Extremely worried. Q. Thinking about the current performance of your own business, do you think your business is performing 1. Very well 2. Quite well 3. Not very well 4. Not at all well 5. Don t know Q. Now thinking about the performance outlook for your own business over the next 12 months, do you think your business will perform 1. Better than now 2. Worse than now 3. No change 4. Don t know Q. You mentioned that you expect your business to [be better than now, be worse than now, have no change] over the next 12 months, what are the factors underpinning your expectation? (Please select all that apply) 1. Current tax levels 2. Future proposed tax changes - going up 3. Future proposed tax changes - going down 4. Petrol prices too high 5. Petrol prices forecast reduction 6. Employment market favourable for employers 7. Lack of available trained workers to draw on 8. Increase in Government investment in my industry 9. Decrease in Government investment in my industry 10. Increase in competitive activity 11. Decrease in competitive activity 12. Organic growth of my industry is increasing 13. Decline in growth rate of my industry 14. Consumer/end user trends changing favourably 15. Consumer/end user trends changing unfavourably 16. None of these 38. Other (please specify) 34

35 Q. Thinking more generally about the condition of the overall Australian economy over the next 12 months time, do you think it will perform 1. Better than now 2. Worse than now 3. No change 4. Don t know (don t read out) Q. Listed below are a number of issues that your business will deal with over the next 12 months. Thinking only about your own business, please indicate your outlook for each of these issues. (1 is a very negative outlook, 2 is a somewhat negative outlook, 3 is neutral, 4 is a positive outlook and 5 is very positive outlook. If this is not applicable to your business select 6) 1. Sales 2. Cash flow 3. Business costs 4. Profitability 5. Competitor activity 6. Federal Government policies 7. Local Government policies 8. Exchange rates 9. Interest rates 10. Business systems (IT, accounting) 11. Marketing and customer relationships Q. Do you expect to invest in your business in the next 6 months? 1. Yes 2. No ASK IF YES : Q. And in funding this investment, are you likely to use your own cash resources, raise it through borrowings or both? 1. Fund all of it from our own resources 2. Borrow the entire amount 3. Combination of self funding and borrowings 4. Don t know Q. How would you rate your State Government s current performance in contributing to the development of small business in your region? [Please indicate below where 1 means very poor performance, 2 means poor performance, 3 means neither poor nor good performance, 4 means good performance and 5 means very good performance. If you really have no idea, then select Don t know.] 1. Very poor performance 2. Poor performance 3. Neither good not poor performance 4. Good performance 5. Very good performance 6. Don t know Q. Does your business sell products or services primarily to other businesses or consumers? 1. Businesses 2. Consumers 3. Both 4. Other (specify) 9. Don t know 35

36 Q. What percentage of your overall expenses does each of the following areas account for? [Responses: percentage for each category; all add up to 100%] 1. Rent and property costs 2. Salary/wages 3. IT - software and hardware 4. Plant equipment, furniture, materials and inventory costs 5. Marketing, advertising and sales 6. Energy use - electricity, gas, water, oil/petrol 7. Research & Development costs 8. Administrative costs human resource management, accounting, finance 9. Other (specify) Q. Do you expect your business revenue to increase, decrease or remain unchanged in the next 12 months? 1. Increase 2. Decrease 3. Unchanged 9. Don t know ASK IF INCREASE : Q. How much do you expect your revenue to increase in the next 12 months? % % % % 5. More than 20% ASK IF DECREASE : Q. How much do you expect your revenue to decrease in the next 12 months? % % % % 5. More than 20% Q. Do you intend to hire or reduce employees within the next 12 months? 1. Hire more employees 2. Reduce employees 3. Neither hire nor reduce 4. I am a sole trader and do not intend to hire 1. Don t know ASK IF HIRE : Q. How many employees do you intend to hire in the next 12 months? 1. 1 employee 2. 2 employees 3. 3 employees 4. 4 employees 5. 5 employees or more ASK IF REDUCE : Q. How many employees do you intend to reduce by in the next 12 months? 1. 1 employee 2. 2 employees 3. 3 employees 4. 4 employees 5. 5 employees or more 36

37 SKIP THE FOLLOWING TWO QUESTIONS, IF SOLE TRADER : Q. How do you find your employees? (Multiple responses) 1. By advertising on newspapers 2. By advertising on the Internet 3. Through family/friends/other employees in my company 4. Via professional association 5. Through recruitment agency 6. Other (specify) Q. What percentage of your employees is [Responses: percentage for each category; all add up to 100%] 1. Full time permanent 2. Part-time permanent 3. Contract 4. Casual 5. Other (specify) DEMOGRAPHICS: D1. What is your gender? 1. Male 2. Female D2. Which of the following categories best describes your age? 1 Under 18 years years years years years years 7 Over 65 years 8 I don t wish to answer this question D3a. Which of the following best describes your current marital status? 1. Not married 2. Divorced / Separated 3. Married 4. Living with partner (de facto spouse relationship) 5. Other (specify) 6. I do not wish to answer this question D3b. Which of these best describes your household 1 Single living at home with parents 2 Single, sharing accommodation with other adults 3 Single, living alone 4 Single with children living at home 5 Single with children who do not live at home 6 Married/de facto with children who live at home 7 Married/de facto with children who have left home 8 Married/de facto with no children 9 Other 37

38 D4. Which of the following ranges best describes your total household annual income before tax? 1 Under $25,000 2 $25,000 - $39,999 3 $40,000 $59,999 4 $60,000 $74,999 5 $75,000 - $99,999 6 $100,000 - $149,999 7 $150,000 - $199,999 8 $200, Don t know 10 I do not wish to answer this question D5. Which state is your company predominantly based in? 1. NSW 2. VIC 3. QLD 4. SA 5. WA 6. TAS 7. NT 8. ACT D6. What is the postcode where your business is located? If you have more than one office please indicate the postcode where your business Head Quarters are based. [text box] D7. What is the main product, service or activity that your business provides? [text box] D8. What industry does your business operate in? 1. Agriculture 2. Manufacturing 3. Electricity, gas and water supply 4. Construction 5. Wholesale trade 6. Retail trade 7. Accommodation, café and restaurants 8. Transport and storage 9. Communication, media and marketing services 10. Finance and insurance 11. Property and business services 12. Government administration and defence 13. Education 14. Health and community services 15. Cultural and recreational services 16. Personal and other services 38. Other (Please specify ) 38