Attracting new customers is the top pressure point currently experienced by Australian small and medium businesses, according to the latest instalment of MYOB’s Business Monitor.
The October survey, which collected data from more than 1000 SMEs, found SMEs are also under pressure from competitive activity, which was listed in second place.
In third place was fuel prices, followed by cash flow concerns and concerns about profitability and price margins.
Winning over new customers was nominated as a greater pressure by SMEs that have experienced a fall in revenue over the past 12 months (35%), those who operate a website or are active on social media (32%) and businesses in the retail and hospitality industries (32%).
Businesses feeling pressure from competitive activity were more likely to be in the manufacturing or wholesale sectors (44%) or retail and hospitality (34%), as well as those businesses that have seen revenue falling in the past year (35%).
According to the survey, the price of fuel is a key pressure point on agribusinesses (38%) and those in construction and trades (32%), while cash flow concerns are being felt most by businesses in manufacturing and wholesale businesses (33%) retail and hospitality (29%).
These two sectors were also among the SMEs more likely to nominate profitability and price margins as a pressure point, with 40% of manufacturers and wholesales and 32% of retailers and hospitality businesses feeling profitability pressure.
Tim Reed, chief executive of MYOB, told SmartCompany it’s not surprising to see SMEs that are experiencing declining revenue are feeling the greatest pressure to attract new customers.
“Securing and keeping new customers is being viewed by Australian SMEs as key to survival, even more important than maintaining strong cash flow through their businesses,” Reed says.
“It’s also interesting to see that concerns over competitor activity have jumped to second place, with manufacturing and wholesale and retail and hospitality [businesses] feeling the strain the most.
“Heightened competition and the battle for new customers will make it more important than ever for SMEs to be focused on first class service and deliver in 2016.”
The MYOB Business Monitor also asked SMEs about the areas their businesses will increase focus and investment on most in the new year, with prices and margins on products and services coming out on top at 28%.
Customer retention was nominated by 27% of survey respondents, while 26% said they will increase their focus on and investment in the number or variety of products and services they offer.
A quarter of survey respondents said they will increase their focus on customer acquisition and another quarter said they will focus more on how much they pay their employees.
Close to half of survey respondents (45%) said they expect the Australian economy to decline over the next 12 months, while 23% said they expect the economy to improve.