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Higher interest rates plus increased prices for fuel and utilities mean revenue is down for 38 per cent of SMEs, the software supplier found.
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1 in 5 small business owners cut own pay to survive: MYOB
19 February 2024
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9 minute read
One in five small business owners have reduced or cut their personal income entirely to mitigate rising costs, according to a survey by MYOB.
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The MYOB Business Monitor found inputs had gone up for 58 per cent of SMEs compared to a year ago, with significant pressure from higher interest rates reported by 27 per cent, pricier utilities (32 per cent) and fuel (33 per cent).
For one-third of SMEs, revenue had dropped over the past 12 months with economic conditions the stand-out reason for 38 per cent.
MYOB chief Paul Robson said many small businesses would need to overcome hurdles this year to prosper over the long term.
“We’ve seen no shortage of challenges in recent years,” he said. “The impacts of higher operating costs, combined with consumer belt-tightening, is reflected in the pricing, profit and income decisions of small business owners, as they try to achieve more with less.”
A decision to cut their own pay – to zero in some cases – had been forced on to 21 per cent of business owners, MYOB said, with 28 per cent of SMEs making less profit than a year ago or none at all.
A further 29 per cent had raised prices in an attempt to cope.
The survey of SME owners and operators, conducted twice a year by MYOB, found that businesses established for a decade or more were most pessimistic about the future with just 19 per cent expecting the economy to improve this year.
Start-ups of two years and younger were most optimistic, at 36 per cent, with four out of 10 banking on online software to boost their chances of success.
“SMEs are especially susceptible to fluctuating conditions, but they’re also incredibly resourceful and can move quickly if required,” Mr Robson said. “Despite rising costs being felt across the board, the research indicates businesses born in the last two years have emerged more optimistic and strong, and are feeling more positive about the year ahead.”
“Building and growing a business against the backdrop of challenging market conditions means businesses are looking to supercharge their productivity right from the start.
“Digital capabilities enhance productivity, helping SMEs save time and money, improve accuracy in their business, thereby increasing their likelihood of success.”
The MYOB Business Monitor quizzed 1,037 business owners, managers and directors between 29 October and 7 December last year about attitudes to profitability, cash flow, pipeline work, technology usage, and the government.
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