Transforming the Mid Market

Australia’s bigger businesses make a significant impact on the economy

The mid-market is often overlooked in business analysis, reporting and policy. Sitting between Australia’s small businesses and the largest local corporations Australia’s mid-market makes up 2.3% of all businesses – around 51,000 of them. They represent a wide range of sectors, from manufacturing (23%) and construction (8%) to professional services (8%), healthcare (7%) and agribusiness (3%).

Bringing focus to the Australia’s mid-market businesses

Believing it’s time this sector received greater focus, MYOB surveyed 276 mid-market businesses from across the country to measure the performance of the Australian mid-market. The aim of the research was to highlight the challenges these businesses face and identify the barriers to their success.

MYOB Enterprise Insights Report

The report tables a number of key findings about the pressures confronting these businesses, the likelihood for growth, their decision-making processes, and measurements of success. The key findings include:

Mid-market is performing well and confident of future growth

Australia’s bigger businesses have confidence in the Australian economy, underpinned by the solid growth most achieved in 2017. 44% of bigger business operators said their revenues had grown in 2017, while just 16% said their revenue decreased.

Australia’s bigger businesses struggle to find skilled employees

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

Enterprise owners have greatest influence on their businesses

For the majority of the mid-market, the business owner is still the key decision-maker – particularly regarding operational structure and strategic planning. However, CEOs (or equivalent) are the most likely group to make decisions regarding IT investment.

Profitability equals success – more than growth or customer satisfaction

Making a profit is the most significant indicator of success according to the Mid-market sector. Far fewer businesses target growth and customer satisfaction as a measure of their performance in the market.

Asia focus in trade development

While New Zealand remains the bigger business sector’s largest export market, when asked which countries the Government would be best to further trade ties with, 54% of respondents said Asia, with 35% wanting the Government to specifically target China.

Fewer businesses targeting growth

While Australia’s bigger businesses are a significant source of development for the local economy, the majority of the businesses in the sector are not currently targeting growth. Just 12% of respondents indicated that they’re looking to grow in 2018. Many prefer to maintain their share of the market or focus on other priorities, such as providing profitable returns for their owners.

R&D and innovation is not a priority for most

Research and development doesn’t appear to be a priority for Australia’s mid-sized enterprises, with over half (53%) spending less than 1% of revenue on R&D.

The average amount a business invests in innovation is just 1.5% of their revenue. Just 3% said they spend the recommended average of 3% on R&D, and just 7% said they spend over 5% of their revenue on developing their business.

Almost a third (29%) of Australia’s enterprises said a lack of skilled staff was their main barrier to innovation, followed by a lack of time (30%) and the cost to develop (20%).

Are enterprises ready for digital transformation?

Internet-connectivity (35%) and cloud-computing (31%) were identified as impacting their industry in the next ten years, while just under a quarter (23%) expect emerging technologies such as robotics and the internet-of-things to do the same.

In conclusion

MYOB found that the mid-market has the potential to transform the future of the Australian economy. It is vital that this importance is recognised and a greater focus brought to bear on fostering its development.


Download MYOB Transforming the Mid-Market Report

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