Money.com.au commissioned a survey of an independent panel of 258 Australian business owners. It sought to understand the profits Australian businesses made this year, compared with last year, and whether they tried to increase it. The survey also revealed what business expenses were cut this year – if any.
Money.com.au surveyed business owners across a range of organisational sizes: micro-businesses (1-10 employees), SMEs (11-50 employees), medium (51-200 employees) and large (more than 200 employees). Respondents also represented various lengths of time their businesses have been operational: young businesses (less than five years in operation) and established (more than five years).
Fifty (50) per cent of Australian businesses experienced a decline in profit, when compared to the same time last year. Thirty-five (35) per cent of business owners made about the same profit as in 2019, while 15 per cent made more profit.
Across the States, a higher proportion of businesses based in WA experienced a decline in profits, at 67 per cent, followed by 62 per cent of those in Victoria. In comparison, 40 per cent of Queensland businesses made less profit.
The survey reveals that 55 per cent of Australian business owners made cuts to expenses this year.
A higher proportion of businesses based in NSW made cuts to expenses, at 65 per cent, compared with 59 per cent of Victorian businesses and 33 per cent of those based in WA.
Among the 55 per cent of business owners who made cuts to expenses, 45 per cent made cuts across travel. A high proportion of business owners also made cuts to employees and contractors, at 44 per cent, and 34 per cent cut lunches and entertainment.
Across the States, 52 per cent of business owners in NSW made cuts to employees and contractors, compared with 43 per cent of those based in Victoria and 17 per cent in South Australia.
An equal 24 per cent of business owners overall also made cuts to their own salary and froze pay increases and bonuses. Twenty (20) per cent cut back on marketing expenses, 17 per cent cut rent and work vehicle expenses, while 15 per cent made cuts on business gifts, external consultants and switched to cheaper suppliers, technologies, and subscriptions. Thirteen (13) per cent cut back on charitable donations and 11 per cent on workplace amenities.
Across organisation sizes, owners of micro-businesses were more likely to pay themselves less this year, with 32 per cent of respondents citing this, followed by 31 per cent of small business owners. In comparison, 25 per cent of medium-sized business owners and 3 per cent of large business owners paid themselves less.
Fifty-seven (57) per cent of business owners did not try to increase their business income this year.
Across the States, 77 per cent of South Australian businesses did not try to increase income, compared with 61 per cent of Queensland businesses and 52 per cent of those based in NSW.
Younger businesses were less likely to try to increase income this year, with 56 per cent of those in operation less than five years citing this, compared with 45 per cent of established businesses (those that have operated more than five years).
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