What recession? Australian startups reject talk of economic downturn
The latest survey from MYOB shows that two-thirds of startups expect the economy to improve or stay the same.
Leading Australian economists such as Professor Steve Keen are predicting an Australian recession in 2017, but the latest survey from MYOB shows that startups are rejecting this notion. The bi-annual survey of over 1,000 small business owners found that 26% expect the economy to improve over the next year while 33% expect it to remain the same.
CEO of MYOB Tim Reed said he was thrilled by the results.
"These results reinforce the importance of fostering entrepreneurial small businesses. We know that startups are the engine room of the economy, with 42% of startups reporting revenue increases. What we need to do is make sure we as a nation are removing roadblocks to innovation and growth."
The key thing is to ensure Australia remains an attractive place to do business
This optimism may be due to government support of small businesses through the innovation agenda and platforms such as the regulatory sandbox, details of which were announced yesterday.
"The innovation agenda definitely played a part in this revenue growth," Reed said. "Being only 12 months in, we can already see the results with 59% of Australian startups expecting their revenue to increase over the next 12 months. With this in mind, the key thing is to ensure Australia remains an attractive place to do business."
Reed believes removing roadblocks to business growth through a lower company tax rate and refusing GST and BAS compliance red tape will help Australian small businesses.
There was also a generational difference in business investment attitudes which Reed believes is to do with differences in personalities, values and beliefs.
"From our research we can see that Gen Y business owners are more likely to increase investment in the next 12 months across a number of areas, whereas Baby Boomers were much less likely to be investing."
"This difference in attitude could be due to various reasons, including the current stage of their business. Additionally, Baby Boomers are known to be quite conservative in their nature, whereas Gen Y owners grew up in a time of economic growth and prosperity.”
Increased availability of small business finance has also had an impact, with the rise of alternative finance providers and new, smaller unsecured loan offerings from Australia's largest lenders.
MYOB surveys consistently find cash flow as a pain point for SMEs, according to Reed.
"Running a business is already immensely challenging and on top of that SMEs have to manage their finances and ensure the health of their business. It’s really exciting to see that revenue is on the rise for this group of business owners which means that their spirits are high right now and they’re able to invest back into different areas of their business.”