Westpac local business sentiment survey. December 2011 by AMR

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1 Westpac local business sentiment survey. December 2011 by AMR Region Report Wide Bay/ Burnett/

2 Executive Summary Overall business sentiment index Mackey & Northern Queensland 57/100 Wide Bay/Burnett/ 56/100 Sunshine Coast 52/100 Brisbane South East & Southern Queensland 58/100 Brisbane City & South West 54/100 Gold Coast 54/100 Overall business sentiment index is a score out of 100 that shows how local businesses are feeling. The score is a combination of their perceptions on current and future business performance, difficulty of running a business and general happiness. Brisbane North 57/100 Business performance in Wide Bay, Burnett, and has declined compared to results 6 months ago. Despite poorer performance and lower optimism, business owners in the local region remain happy. The Westpac business sentiment index is the measure of small and medium business sentiment in, who comprise 97% of all private sector businesses and employ 3.6 million people. In September 2011, 2,000 small and medium business owners participated in the second Local Business Sentiment Survey commissioned by Westpac, to provide an insight into business owners sentiment based on their perceptions of current and future business performance. In Septembe er 2011, over half (5) of businesses in Wide Bay, Burnett, and report good or very good performance a decline from March 2011, where 69% reported positive performance. e. Business owners in Wide Bay, Burnett and Central Coast are less positive about future business performance e compared with 6 months ago (4 compared to 5 in March), but is similar to the overall optimism across (46%). Score card 57% 37% 41% 46% 61% 56/100 Wide Bay/Burnett/ Business performance is good / indicates significant difference to Mar 11. Business performance is better than last 6 mths Despite the decline in performance and a less optimistic outlook, the majority of the region s business owners have a similar happiness to 6 months ago (5 to 52% in March), which is lower than the rest of Queensland (56%) and (61%). The key positive influences on happiness include their relationships with customers and other businesses as well as achieving personal goals. The greatest difficulties faced by businesses in Wide Bay, Burnett, and the are driving sales (), managing business costs () and managing employees (). As experienced by other business owners across, the most difficult financial factor is managing cash flow (52%). The latter is not surprising when a third (3) of businesses in this region report not having a cash flow budget. Despite these challenges, the majority of businesses in this region anticipate their profits for the next 6 months will increase (3) or at least remain the same (45%). Running a business is more difficult than last 6 mths Predict better performance in next 6 mths Are happy as business owners Westpac Local Business Sentiment Survey Overall business sentiment index 52% 4 43% 47% 56% 55/ % /100 01

3 Business performance: influencing factors Top 3 positive and negative local influences on business Top 3 positive and negative national influences on business Positive Local weather conditions Local consumer confidence Local competitive landscape Negative Negative Local consumer confidence Local government Local transport and roads -5-53% -4 2 Positive n dollar Interest rates Consumer confidence Negative Negative Consumer confidence Government regulations/legislation n dollar % Positive influences on business "We have been able to employ additional professionals with local knowledge." "We have been getting more local contract work from farmers, due to some heavy PR work." "Council are now starting to listen to developers and that should bring more development to Hervey Bay." Negative influences on business "Prospective tenants do not want to pay a reasonable price to rent a facility." "Availability of skilled workers is minimal." "People aren't spending money." Construction Transport & Storage Construction Property & Business Finance & Insurance Personal & Other Services Services Westpac Local Business Sentiment Survey 02

4 Running a business Difficult overall factors in running a business Managing employees Driving sales/revenue Managing business costs Adhering to regulations Managing finances Marketing & Promotional activities Determining prices Customer service Executing strategy Planning strategy Other 5% 3% 3% 15% Difficult financial factors in running a business* Managing cash flow Management of GST & business tax provisions Managing debtors Access to finance Managing creditor repayments 23% 22% 22% 31% 52% Main sources of business advice General business advice Financial advice ONE TWO THREE My own experience/ research Accountant Colleagues My own experience/ research Accountant Business banker Managing employee entitlements 16% Budgeting 13% Determining prices 12% Other 2% None 7% 25% 5 75% * Base size for Wide Bay/Burnett/ is too low to report so above chart shows data. Westpac Local Business Sentiment Survey 03

5 Financial management Future profit outlook How often do business owners compare their cash flow budget to actuals? Increase Decrease Stay the same Unsure Main reasons for change in profit* Increase Reduced costs Increased revenue Both Decrease Increased costs Reduced revenue Both -37% -43% 45% -2 2% 31% 3 63% -5-25% 25% 5 75% Main reasons for not having a cash flow budget * 75% 5 25% Monthly Quarterly Annually Never I don't have a cash flow budget 1 Don't have the time to create one 15% Don't know how to create one 3 15% 5 Don't need one 47% 4% Other * Base size for Wide Bay/Burnett/ is too low to report so above chart shows data. * Base size for Wide Bay/Burnett/ is too low to report so above chart shows data. Westpac Local Business Sentiment Survey 04

6 Social media within business How are businesses using social media? Benefits of social media* Take every opportunity to use social media tools Use social media where they can, but would like to know more Not currently utilising social media, but would like to in the future Have considered using social media, but it is not for them Not utilising any social media as they don t know much about it Unsure 25% 35% 3% 5% 15% Marketing/promoting products and services Raising profile of business Building customer relationships Connecting with wider audience Customer feedback on products & services 46% 45% 43% 73% 71% Top 3 reasons organisations are not currently making full use of social media Reducing business costs Improving service delivery Finding/attracting staff 19% 16% 75% 5 25% 65% 39% 22% Lack of expertise Lack of time Lack of perceived value Other None 1% * Base size for Wide Bay/Burnett/ is too low to report so above chart shows data. Westpac Local Business Sentiment Survey 05

7 Happiness level of business owners Sadder Wide Bay/ Burnett/Central Coast Sep '11, 50 Mar '11, 53 Sep '11, 56 Sep '11, 61 Happier Wide Bay/ Burnett/Central Coast Mar '11, 52 Mar '11, 60 Top 3 aspects that have influenced those who are happy and sad Why so sad Costs/ Overheads Economic outlook Paperwork "Have noticed a delay in our debtors, it is taking longer for clients to pay, causing a minor cash flow issue." Finance & Insurance Reasons to be happy Customer relationships Business relationships Personal goals "We ask our clients regularly about our performance and ways to improve what we are currently offering. It's also good to hear the great feedback we get from our testimonials." Property & Business Services Westpac Local Business Sentiment Survey 06

8 Strategic business advice "Keep our prices reasonable, to attract customers who would normally have more disposable income to spend on holidays, to consider to choose what we offer." Accommodation, Cafés & Restaurants "Always take time to work ON your business as well IN your business." Manufacturing "Regional areas need to utilise their local resources. Source local staff that can complement your business and give you the edge over your competitors." Construction "Provide the service you promise your customers." "Encouraging staff to do that little bit extra, show initiative. Improved staff training & product knowlege e. Genuine customer servicee ethic. Committment to listening to customers and quality merchandise/services. Create an atmosphere where both staff and customers want to be." "We are not in the business to make 'millions' so we find a suitable midpoint at which there is a win win for all." Transport & Storage Retail Trade Property & Business Services Westpac Local Business Sentiment Survey 07

9 Business sentiment trends Overall business sentiment index Business performance is good Business performance is better than last 6 mths Wide Bay/Burnett/ 4 67% 57% 69% 63% 5 52% % Wide Bay/Burnett/ 4 44% 37% 39% 4 42% 33% Wide Bay/Burnett/ Running a business is more difficult than last 6 mths Predict better performance in next 6 mths Are happy as business owners % 41% 43% 43% 42% % 56% 46% 47% % % 53% 56% 52% 5 Wide Bay/Burnett/ Wide Bay/Burnett/ Wide Bay/Burnett/ Fieldwork was conducted by AMR, an independent research company, between 16th September 2011 and 10th October 2011, where a total of n=2000 online surveys were completed. Sample was supplied by Westpac of customers and non-customers qualifying as Small Medium Enterprises. Westpac Local Business Sentiment Survey 08

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