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MYOB Enterprise Insights Report 2018

TRANSFORMING THE MID MARKET
In this report, MYOB measured the performance of the Australian mid-market, highlighting the challenges they face and identifying the barriers to their growth. With the aim, to bring the significance of mid-market into greater focus and ultimately support their success.

About the Report:

In this report, MYOB measured the performance of the Australian mid-market, highlighting the challenges they face and identifying the barriers to their growth. With the aim, to bring the significance of mid-market into greater focus and ultimately support their success.

Participants:

MYOB interviewed 276 mid-market businesses from across Australia. The businesses range in size from under 20 employees to large-scale enterprises. 30% of the respondents employ more than 50 people and 3% have a staff of over 1000. They represent a wide range of sectors, from manufacturing (23%) and construction (8%) to professional services (8%), healthcare (7%) and agribusiness (3%). Over a third of the respondents report an annual turnover of less than $10 million, while 6% reported earnings of over $100 million. While a third are based in NSW, reflecting the majority of bigger businesses in the country’s most populous state, they are spread across the country – from Northern Territory to Western Australia and Tasmania.

Key Findings:

 

Economy:

3% of mid-market business operators say that the economy would improve by the end of 2018, 16% say it would decline in 2018, 47% believed it would remain the same, and 7% were uncertain about how the economy would perform this year.

 

 

 

Top five mid-market pressures:

The MYOB Enterprise Report survey shows that the ability to find qualified staff is the sector’s most significant business pressure (38%), followed by a competitive activity (34%) and attracting new customers (32%).

 

Employment:

Australian enterprises are expecting to take on more staff over the next 12 months, as well as pay their current staff higher salaries and wages. The graph shows the percentage of enterprises expecting to pay their staff more in 2018.

 

 

Export trends:

Just under a sixth of Australian mid-market businesses now sell off-shore. Looking at the top Australian Exporters, mid-sized businesses, earning between $5 million and $10 million, are among the most likely to export their products and services overseas (23%).

 

Business management capability:

While enterprise owners decide the overall direction of their businesses, CEOs (or equivalent) are the most likely to decide when, where and how the business invests in I.T and related services. As Australian enterprises increase in size (staff count or revenue), the more likely they are to use a board of directors to set and implement business strategy

 

Growth:

Majority of the businesses in the sector are not currently targeting growth. Many prefer to maintain their share of the market or focus on other priorities, such as providing profitable returns for their owners.

 

Others:

  • Innovation: R&D isn’t a priority for Australia’s mid-sized enterprises, with close to a quarter (22%) spending less than 1% of revenue on R&D, and almost a third (31%) not budgeting for it at all. 
  • Technology: Internet connectivity believed to have the highest impact on their industry(35%) over the next decade, followed by cloud computing(31%), robotics (31%), IoT(23%) and Bid data (13%), with AI, machine to machine learning and GPS directed automated machinery amongst low impact technologies.
  • Government Support: Enterprise operators believe the Government isn’t doing enough to support their businesses. Just 14% of respondents agreed Canberra was working to support businesses, while almost a third (29%) disagreed. 7% strongly disagreed, while only 1% strongly agreed.

Conclusion

MYOB found that the Australian mid-market sector has extraordinary potential to transform the future of the Australian economy by stimulating job growth, introducing new technologies and reinvesting their profits within Australia. Being more dynamic and highly flexible, the mid-market businesses are able to respond to changing markets while identifying and exploiting new opportunities. 

However, despite the enormous possibilities, the Australian mid-market hasn't been able to offer much to the economy because of reasons such as lack of willingness to take additional risk and stress associated with growth, lack of an expert management team, lack of preparedness for disruption through new technologies, lack of willingness to invest in the research and development to transform their business in the face of rising pressures and a growing skills crisis.

Fostering the development of the Australian mid-market will mean stimulating greater investment in research and development, mitigating the shortage of skilled staff by investing in training appropriate to the needs of industry and attracting skilled migrants.

Ultimately, it will require the nation to recognise the importance of the mid-market and develop the framework of support in terms of resources and investment.

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