Price rises loom for Australian businesses
Mid-sized operators are emerging from 2022 with strong results, and benefit from firmly embedded flexibly, according to new research from business management platform MYOB. However, with ongoing economic challenges facing Australian businesses, as well as cyber risks and a possible recession front of mind, the mid-market are under no illusions about the difficulties that lie ahead.
The latest research of 510 Australian mid-sized businesses, with a minimum turnover of $5 million and between 20-500 employees, finds seven in ten (69%) have seen increased revenue since January 2022, compared to the 2021 calendar year, while profitability has improved for 57%. The same proportion (57%), said their overall business performance was ‘better than expected’ this year.
Though the mid-market looks to round out the year with strong results, most are taking the macro-economic environment into account when preparing for the future. Three quarters (75%) of respondents plan to increase their pricing in the next 3-6 months, a figure that rises to 91% for those in manufacturing and wholesale.
“Mid-market businesses entered the year feeling bold and ambitious, with more work in the pipeline and business transformation in sight,” said Kim Clarke, GM Enterprise at MYOB.
“Despite impressive performance this year, our insights suggest mid-sized operators are not resting on their laurels, and are aware of the need to prepare for uncertainty. As prudent and experienced leaders, they are looking to make sensible decisions to maintain their operations.
“Eighty-two per cent of respondents are concerned about the onset of a global recession. This is likely to compound challenges around skills shortages, production, and supply costs, which are the top three reasons given by those planning to increase prices.”
On top of global economic challenges, cyber security remains an ongoing concern. Encouragingly 72% of mid-sized businesses polled already have cyber security insurance, however more than three quarters (78%) of this group have seen that cost increase in the last three months. Of those who aren’t currently covered, 41% are looking to purchase cyber security insurance in the near future.
The flexibility gained in the wake of the pandemic has also helped mid-sized businesses thrive. The widespread shift to remote or hybrid working correlated with a boost in productivity for many respondents.
Twenty-seven per cent of mid-market operators surveyed, said their teams are working ‘fully remote’ and just over half (51%) have a mix of employees working remotely and on-premise. Of those who are fully remote or take a hybrid approach, 58% say their productivity has increased, while 36% say it is unchanged.
“Businesses all over the world had to adapt – fast – to remote working, and for the mid-market, this change appears to be of ongoing benefit. It’s possible the transition to remote work was smoother for mid-sized businesses, with modern cloud-based systems and communications tools embedded,” Kim added.
“After navigating the past few years, the mid-market is in good stead to face upcoming challenges head on. Their resilience and tenacity will help them navigate future challenges, build their reserves and help their business withstand the impact of whatever comes next.”
About MYOB
MYOB is a leading business platform with a core purpose of helping more businesses in Australia and New Zealand start, survive and succeed. MYOB delivers end-to-end business, financial and accounting solutions direct to businesses employing between 0 and 1000 employees, alongside a network of accountants, bookkeepers and consultants. For more information visit myob.com or follow MYOB on LinkedIn.
About the research
Research for MYOB’s mid-market Snapshot was conducted by Dynata between 20th October – 14th November 2022. In total, 510 mid-market business leaders and decision makers (employing between 20 and 500 people) in Australia took part in the survey. Respondents were sampled from the Dynata online business profile panel and screened to ensure they met the qualifying criteria. The survey has a maximum margin of error of +/- 4%.
