Pessimism among SMEs may have reached its lowest point since the global financial crisis, a new MYOB survey has revealed, with the company now expecting businesses to pick up steam in the back half of 2013.
But companies need to innovate more and start focusing on their client relationships right now if they want to see any benefit, warns MYOB chief executive Tim Reed.
“You need to really address client needs in the future,” he told SmartCompany this morning.
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“Whether that’s enabling them to do more online, or even in the form of advice, it can be simple. But it needs to be done,” he says, referring to the need to foster customer relationships ahead of a recovery year.
The company’s latest Business Monitor has compiled results from five different surveys ranging from October 2010 to July 2012.
The survey shows a considerable decline in the amount of SMEs who believe the economy is recovering, from 47% in 2010 to just 19% in July 2012. Businesses in the finance and insurance industries are the least likely to expect a recovery, and the proportion of SME owners expecting a recovery in the next 12 months has dropped across all states during the survey period.
Companies in the construction, trade, transport, finance and insurance industries recorded the biggest revenue falls in the year to July 2012.
The survey revealed 41% of SMEs experienced a revenue decline in July 2012, compared to 34% in October 2010. But the July 2012 and March 2012 statistic for businesses anticipating a revenue rise were the same at 29%.
Overall, twice as many businesses saw their revenue fall than rise. But Reed says good times are ahead, noting that based on trends gathered during the survey period, “we appear to have plateaued”.
Reed makes it clear that while the survey doesn’t show signs are improving, the metrics have stabilised during 2012 give hope for a positive 2013.
“Our belief is that based on this, we’ve hit a low point,” he says.
“We have to consider that with expectations, they aren’t formed fresh every morning. You start with your viewpoint and adjust it. And over the past two years, we’ve seen a key deterioration in metrics.”
“The bright spot from this survey comes from the fact metrics have stabilised over the last 12 months. They’re no longer in decline.”
Certainly, things are improving. Nearly one-third of businesses surveyed in the last five Business Monitor surveys have reported they have more work in their short-term pipeline, 28% in October 2010 compared to 29% in July 2012.
And while expectations for the economy to recover within 12 months declined from 2010 to 2012, Reed notes that figure has stabilised through 2012. The statistic for those companies expecting revenue increase – 29% – also remained stable.
But even though SMEs may be ready for a recovery, Reed says some groundwork needs to be prepared.
“To make the most of 2013, I’d say you need to focus on your client relationships and then nurture them as much as you can,” he says.
“Really address their needs. I think a lot of business owners feel like there’s a big hurdle but it’s quite easy to do these types of things – set up a Facebook page, build a professional looking website, and so on.”
The next year, Reed says, will be an important one for businesses to make sure they have a solid customer base in preparation for a recovery.
“You need to form that base of your business. Focus on those relationships, and secure them.”