The latest MYOB Business Monitor also reveals that 57% of SMEs believe the economy will decline in the coming year.

The survey of 1,000 SME owners and operators, released bi-annually by MYOB, found businesses are taking action to deal with the rising cost of doing business. The most common ways they’re doing so are by making less (or no) profit (31%), passing on cost increases to customers (30%), and dipping into savings (24%).

Preparing for uncertainties ahead won’t necessarily make it easier for the nation’s 2.4 million SMEs, who have already faced a challenging few years, according to Emma Fawcett, general manager of SME at MYOB.

“For the first time since the onset of COVID-19, the pandemic didn’t make the top five pressures facing SMEs. Instead, the main concerns are fuel prices, cost of utilities, interest rates, price margins and profitability, and cash flow. These are all indicative of the current economic environment and provide an insight into what businesses will be thinking about in the year ahead.

“Tellingly, these pressures centre on immediate business operations concerns, rather than looking at investment for future scaling or growth. It suggests that businesses are focused on the most pressing and current challenges, rather than making bold, confident decisions about the future.”

Even without the heightened unease around COVID-19, SMEs have had other external factors to contend with throughout the past 12 months. As well as an increase in cost-of-living, 24% of respondents have been impacted by natural disasters. That percentage rises to 30% for SMEs based in New South Wales. 

Other survey findings included:

  • almost two-thirds of respondents (65%) said the pandemic made them more conservative or cautious in their planning
  • 24% expected their revenue would be down this time next year, compared to 13% this time last year, and 
  • 39% plan to increase prices and margins on products and goods sold; the most common investment increase for next year.

Ms Fawcett said a report last year on SME resilience found small businesses were holding onto higher cash reserves to protect themselves following significant upheaval.

"These latest findings indicate we may see similar behaviour in 2023 and beyond, "she said.

“Some industries, such as finance and insurance, have fared better than others. Those working in industries such as hospitality and retail, which rely on consumers having more disposable income, will be hit harder with a cost-of-living crunch.

“Business owners will need to draw on all the lessons learned over the past few years and ensure they’re making smart decisions and maximising their productivity as they prepare for the coming year."