Report: Mid-market businesses “primed for progress” throughout 2022

MYOB’s latest Business Monitor findings that, while small businesses are increasingly cautious, the mid-market is full steam ahead for the remainder of the year and beyond.

Compared to small and medium businesses, Australia’s mid-market is more likely to anticipate increases in profitability in the year ahead, according to new findings from MYOB.

These details are revealed in the new MYOB Business Monitor report, which summarises research from a national sample of 1,000 business owners, managers and operators. Published in June, the new report is based on a survey of this sample conducted in late March this year.

Highlights of MYOB’s Business Monitor findings for the mid-market:

• Half (50%) of mid-market respondents anticipate an increase in profitability in the coming year, compared to just 41% of small and medium businesses
• 44% believe they’ll realise increasing revenue compared to the national average of 38%
• 51% of mid-market operators intend to increase spend on IT systems and processes, compared to a national average of 20%

Other areas of increase in the coming year for this business category include ‘prices and marketing on products/services old’ (48 percent), the ‘amount you pay employees’ (47 percent), ‘sales of products/services offline’ (41 percent) and ‘customer retention strategies’ (41 percent).

Speaking to the figures, MYOB’s General Manager for Enterprise, Kim Clarke said the higher expectations in the mid-market for investment growth indicates they are “primed for progress”.

“Despite caution about the economy overall, the research indicates mid-sized businesses are performing strongly, feeling confident in their own operations and are looking to make strong investments to solidify their growth and realise their ambitions in the year ahead,” she said.

Rising cost pressures an ongoing concern for small business clients

The report, which largely focuses on insights from small and medium businesses, will give larger operators some insight into the pressures faced by their small business clients.

In particular, we can show that fuel prices continues to dominate the list of concerns after knocking the pandemic out of first position toward the end of last year.

Here are the top five things causing small businesses ‘extreme’ or ‘quite a lot’ of pressure at the moment:

• Fuel prices – 48%
• COVID-19 pandemic – 35%
• Cost of utilities – 35%
• Price margins and profitability – 29%
• Cashflow – 31%

Emma Fawcett, MYOB’s General Manager for SME, said increases in these pressures reveals a “cost of doing business” crisis for smaller operators.

“Despite acute pandemic-related disruptions easing in 2022, the external factors continue to cause concern around the cost of living for consumers,” Fawcett said.

“In turn, small and medium businesses are facing a ‘cost of doing business’ crisis.”

For mid-market operators with small business clients, these pressures are well worth taking into account when it comes to strategising around your prices, marketing and service model and, as Fawcett notes, there’s also a fair amount of variability in how each of these businesses is impacted.

“The severity of the challenges vary significantly depending on the size of the business and the demographics of the business owner.”

For more information and insights from the June MYOB Business Monitor, you can download the report here.