Sorry taxi drivers, not every small business hates the sharing economy

Elizabeth Barry 16 February 2017

sharing economy

A new survey from MYOB has revealed small businesses are embracing the sharing economy.

The MYOB Business Monitor, a bi-annual survey of Australian small and medium businesses, has revealed the effect of the sharing economy.

While there has been some negative press regarding the effect the sharing economy has been having on established businesses, most notably taxi drivers against Uber, the survey found that only 7% of small businesses reported the sharing economy was having a negative effect on their business. This is compared to 18% of SMEs that reported a positive effect.

MYOB chief technical advisor Simon Raik-Allen believes this is due to the nature of the SME market segment.

Simon Raik-Allen, MYOB

Simon Raik-Allen, MYOB

“SMEs are starting to embrace the sharing economy with almost one in three (31%) saying they had used the services of an Uber driver, rented an Airbnb property or similar," he said.

According to Raik-Allen, small businesses tend to act like consumers, and as such, they take advantage of the convenience offered by the sharing economy.

"Taxis are easy but Uber is extremely convenient these days, and cheaper, so if you’re making trips around the city for business you can do that so quickly now with Uber. I’ve also seen one company that arranges their company off-site days using Airbnb."

Over half of SMEs surveyed have no digital presence

While small businesses appear to be favouring innovation, the survey also found the latter. Of the 1,000+ SMEs surveyed, just less than half (48%) have a website. This is a 5% increase from the previous survey but still a surprisingly low number.

Raik-Allen said that the increase in businesses establishing a digital presence is positive, but those without a website are missing out.

"(The increase) is still below what we’d hope because we do know from other surveys that people with a website have much more customer engagement, have a better brand value, all these kinds of things. There are lots of benefits in a website for a business."

“If as a business operator you are in any doubt about what a website can do for your business, operators nominated the top benefits as; generating more customer enquiries or leads (46%); enabling the business to have more professional brand image (44%) and; making it easier for customers to do business (40%)."

There was also a strong divide between generations, with 75% of Gen Y business owners having an online presence compared to only 29% of business owners over 70.

Payment innovation

While digital is lagging, the survey found the retail and hospitality sectors leading the way in payment innovation, with 44% accepting instant payments such as EFTPOS, ApplePay, PayPal or a mobile app, compared to 28% of SMEs overall. Businesses in retail and hospitality were also the most likely to use online accounting and bookkeeping solutions, with four in ten operating in this way.

"One of the biggest pain points with small businesses we survey is cash flow, and some of the lead times for people being paid is exorbitant," Raik-Allen said. "But we know that when you offer online payment options and mobile payment options, the time it takes for you to get paid is dramatically reduced."

The survey found two-thirds of SME operators were using online banking, but Raik-Allen says this isn't good enough.

"What surprises me is two-thirds of people are using online banking, which is nice, but it also means 30% are not. I can’t imagine a business not using online banking these days, it is such a time saver and it is such a convenience, it opens up a door for you for extra services coming in from your bank and opportunities from financing. Just being in the online financing world is a huge benefit, so the one-third of companies not doing that is disappointing."

The way forward

While the survey revealed a mix of attitudes among Australian small businesses, Raik-Allen believes the sharing economy is the way forward.

"I think that this new business model of this shared economy is paving the way for a whole new set of innovative businesses."

"In the last 10 to 20 years we’ve had websites where you can go and find an expert where you can rent their time, and Uber and Airbnb and those kinds of companies are really showing you what you can do with your shared assets, so people are really starting to think about that."

"I think there’s an opportunity here for real innovation in Australia for people by finding new business models under the “shared economy” banner."

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