Gen Y SMEs – aged between 25 and 39 – are most positive about the year ahead with 53% expecting more profit in the next 12 months. They are the group most likely to be digitally enabled, with 84% having either a website, social media presence or both for their business, according to the latest MYOB Business Monitor

The biannual report, which surveys the views of more than 1,000 Australian small and medium sized enterprise owners, found Generation Y SMEs achieved more profitability in the past 12 months (40%) compared to the national average (26%).

Overall, more than one-third (35%) of all respondents moved more of their business online after Covid-19 hit, with 83% saying it helped their business stay afloat during the pandemic. One in 4 SMEs surveyed intend to double-down on digital, by providing more products and services for sale online in the year ahead.

The adoption of digital tools is no longer a ‘nice to have’ but a critical business decision for SMEs, according to MYOB CEO, Greg Ellis.

“Digital enablement is essential for the current and future success of SMEs. Many businesses would not have survived 2020 without digital tools as they became the only way to connect with customers, colleagues, and communities at large,” he said.

“2020 proved that we have to stop treating digitisation as a future state. Yet MYOB’s Business Monitor survey has shown us that 34% of respondents still don’t have any online presence. This needs to change, and it’s why we’re calling for digital incentives, such as rebates, for SaaS adoption to be introduced for businesses to encourage them to get online.”

The Business Monitor, which measures SME confidence, pressures and priorities found confidence among SMEs is showing signs of uplift, with 48% believing the Australian economy will improve in the next 12 months, more than double the 21% who held this view in June 2020.

While confidence in the economy is growing, many businesses are still feeling the effects of Covid-19, with 44% of SMEs indicating revenue is down compared to this time last year and 21% anticipating it will be down in another 12 months.

However, businesses were feeling less pressure than June last year, though the economic downturn remains the top concern, with 37% of respondents saying it would cause ‘extreme’ or ‘quite a lot’ of pressure. This was followed by attracting new customers and utility costs (both at 30%) and cashflow at 29%.

Customer retention is a top priority for SMEs this year, with 27% expecting to increase their investment in this area. Other investments set to increase are prices and margins on products and services sold, and the sales of products and services online (both at 25%).

“The latest Business Monitor findings show it’s more important than ever for business owners to be digitally enabled, and online businesses have the best chance at success. Many of the pressures felt by Australian small businesses – such as attracting new customers or managing utilities or profitability – can be eased through technology-driven solutions,” Ellis added.