Compared to more established SMEs, start-ups worked less hours for better financial reward last year and are more confident about this year’s revenue performance, according to Australia’s largest accounting software provider.
This came from the MYOB Business Monitor report, based on the recent survey conducted by Colmar Brunton, compares the attitude, results, intentions and expectations of Australian businesses less than two years old with that of their peers.
In the year to February 2013, start-up businesses reported stronger revenue performance than SMEs on the whole. More than one third (36%) saw revenue gains in this time, compared to 18% of all SMEs. Perhaps unsurprisingly given their length of time in business, start-ups were significantly less likely to report a fall in revenue, with 27% seeing this compared to 39% of SMEs overall. 28% reported steady revenue, compared to 40%, and 8% were unsure.
The research found start-up business owners and managers had far more confident expectations around financial performance for 2013 than their more established counterparts. 42% expected revenue to increase, compared to 30% of SMEs on average. They were also less likely to predict a fall, with just 17% forecasting this, while an average of 19% of SMEs expected this. 37% expected steady revenue, compared to 42% of all SMEs. The remainder were unsure.
Start-up business operators believe their biggest challenge over the year is attracting new customers. 73% reported this as a pressure for their operation, with 38% expecting this pressure to be ‘quite a lot’ (29%) or ‘extreme’ (9%).
Cash flow is also a major challenge, with 71% reporting this as a pressure and 34% expecting it to place quite a lot of (25%) or extreme (9%) pressure on them. Fuel prices ranked third, with 70% of start-ups saying they anticipate pain at the pump throughout 2013.
Polly Green, co-founder of successful start-up Green Ant Toys Online Toys Store says, “Starting our own business has been both extremely challenging and incredibly satisfying. The initial challenge was the hardest – creating a business from just an idea. There are daily challenges in designing and implementing a concrete business model, plan, and operating systems. The establishment phase involves so many decisions, including website design and implementation, selection and fitting out of business premises, sourcing of stock, warehouse setup, as well as inventory, accounting and business systems implementation.
“One of the most challenging aspects of starting a new business has been creating consumer awareness and establishing a customer base. As a new online business, gaining a presence, consumer trust and customers is both expensive and time consuming. We have trialled a variety of online and offline marketing methods as well as cultivating social media networks to gain new customers and retain them”.
Start-ups reported working fewer hours than their peers – their mean working week was 39.7 hours, compared to 40.6 hours for SMEs overall. 50% work more than 40 hours a week in their business, 37% work between 40 and 60 hours per week, and 13% work more than 60 hours per week.