Part 1: Moments That Matter – Understanding Australian SMEs
Australian SMEs are confident of the future, with two thirds of millennial SMEs in particular set to expand their business over the next three years, according to a new NAB white paper released today.
- 57% of Australia’s GDP is contributed by SMEs.
- 23% of Millennial SMEs are online-only businesses.
- 66% of Millennial SMEs intend to expand their business over the next three years.
- 23% cite ‘competitive pressures’ as a trigger for expansion.
The state of play in Australian SMEs in 2017: the new NAB white paper Moments That Matter: Understanding Australian Small to Medium Businesses details the growth, challenges and opportunities encountered by Australian business owners today.
Measures of success
When asked to rank the measures of a successful business, research participants painted a surprising picture. One in 3 (32%) rated high profits as an important measure but this was well behind other things such as financial management (58%), positive word of mouth (56%), productive staff (49%) and happy staff (45%). Only 11% ranked large turnover as a measure of success.
A bright future
Our SMEs feel successful – and they’re optimistic about the future of their businesses. Australian SMEs are hugely confident and optimistic about the future of their businesses and their prospects of running a business in Australia.
The majority (73%) also feel they’ve been successful in business, which appears to be strongly correlated to their broader outlook on life – 86% of those who feel successful in business also feel successful in life in general (compared to 75% of the total).
Customers at the centre
Seeing the customer smile is the no.1 priority.
The moments that matter for SMEs are a mix of the ‘big’ things that happen in a business, like winning a big customer, and the ‘small’ but significant moments, like seeing a smile on the face of the customer. They’re also much more likely to be about important ‘firsts’ for the business – the first big order, the first big customer, hiring the first staff member.
They’re often about the pivotal moment when the business transitioned from an ‘experiment’ to a ‘real’ and viable enterprise.
SMEs are focused on expansion and growth
Our research reveals that a significant proportion of SMEs are prioritising growth and expansion – particularly larger businesses.
One in 10 (12%) SMEs are in a constant state of expansion. And investment made by businesses over the last 12 months also demonstrates a focus on growth – with winning new customers, investing in new machinery, hiring new staff and increasing marketing, sitting in the top five areas of investment.
A class apart – Millennial SMEs
The SME sector in Australia is dynamic: small and medium businesses are distinctly agile and focused on innovation and growth.
Millennial SMEs are all of these things too – but dialled up.
On so many levels, Millennial SMEs stood well apart from their counterparts. This is most striking in the gender balance of owners, where there’s an even split between men and women, unlike the general SME population which is still heavily skewed male (64% are male).
They also stood out with their attitudes to technology. Unlike Gen Xs and Baby Boomers, who’ve had to transition from the ‘old’ world into a completely new one, much of the Millennial cohort has little recollection of life pre-24/7 connection, before instant access to everyone you know and where much of the world’s knowledge was something you carried in your pocket. And it shows when it comes to their approach to business.
For full analysis, download report:
About the Moments That Matter whitepaper
The findings are based on a quantitative online survey conducted by IPSOS on behalf of NAB, surveying a representative sample of 808 Australian SMEs (defined as business with an annual turnover between $100,000 and $50 million) owners and decision-makers. The survey was conducted between February 23 and March 7, 2017. In this research, Small Businesses are defined as having a turnover of $100,000 – $5 million, while Medium Businesses are defined as having a turnover between $5 million – $50 million. The data has been weighted to the Australian business population by turnover and industry according to The Australian Bureau of Statistics data.