1 00:00:04,080 --> 00:00:06,479 Sean Aylmer: Welcome to the Fear and Greed business interview. I'm Sean 2 00:00:06,750 --> 00:00:10,289 Sean Aylmer: Aylmer. We already know small business owners are resilient, but 3 00:00:10,289 --> 00:00:13,620 Sean Aylmer: new data reveals the lengths SMEs are going to to 4 00:00:13,620 --> 00:00:17,219 Sean Aylmer: get through the cost of living crisis. The MYOB Business 5 00:00:17,219 --> 00:00:21,030 Sean Aylmer: Monitor shows that rising costs and less spending have forced 6 00:00:21,030 --> 00:00:23,820 Sean Aylmer: one in five small business owners to reduce their income, 7 00:00:24,000 --> 00:00:27,780 Sean Aylmer: in some cases to nothing. But there's still optimism out 8 00:00:27,780 --> 00:00:31,500 Sean Aylmer: there, particularly in newer businesses, and there are always strategies 9 00:00:31,500 --> 00:00:34,799 Sean Aylmer: and resources available to help. Paul Robson is the Chief 10 00:00:34,799 --> 00:00:37,470 Sean Aylmer: Executive Officer of MYOB, which is a great supporter of 11 00:00:37,470 --> 00:00:39,810 Sean Aylmer: this podcast. Paul, welcome to Fear and Greed. 12 00:00:40,380 --> 00:00:41,850 Paul Robson: Sean, thank you so much for having me. 13 00:00:42,840 --> 00:00:45,989 Sean Aylmer: MYOB releases the Business Monitor twice a year, giving a 14 00:00:45,990 --> 00:00:49,410 Sean Aylmer: pretty good read on the changing mood of Australian SMEs. 15 00:00:50,280 --> 00:00:53,790 Sean Aylmer: Firstly, just how significant is the cost of living crisis? 16 00:00:54,359 --> 00:00:56,160 Paul Robson: Yeah. I mean, so again, Sean, thanks for having us. 17 00:00:56,160 --> 00:00:58,080 Paul Robson: And we do this report a couple of times a 18 00:00:58,080 --> 00:01:01,680 Paul Robson: year. And it's a really important report I think because we're in 19 00:01:02,070 --> 00:01:05,819 Paul Robson: a very unique position at MYOB, in that the large breadth 20 00:01:05,819 --> 00:01:10,289 Paul Robson: of our customers allow us to see movement of finances 21 00:01:10,289 --> 00:01:13,319 Paul Robson: and money and employment and payroll and employees that are 22 00:01:13,319 --> 00:01:16,860 Paul Robson: onboarding through a very significant part of the Australian New Zealand 23 00:01:16,860 --> 00:01:20,370 Paul Robson: economy, which is a small and medium business environment. And what 24 00:01:20,370 --> 00:01:23,879 Paul Robson: we're seeing really is super interesting. The last report has 25 00:01:23,880 --> 00:01:26,639 Paul Robson: showed that there are a lot of pressures, increasing pressures, 26 00:01:26,639 --> 00:01:30,479 Paul Robson: on small and medium businesses across those two countries. And 27 00:01:30,779 --> 00:01:32,910 Paul Robson: we're seeing that obviously in things that you would expect. 28 00:01:32,910 --> 00:01:37,050 Paul Robson: So we're seeing organizations call out interest rate payments increasing 29 00:01:37,050 --> 00:01:39,090 Paul Robson: as being a concern, but we're also seeing a lot 30 00:01:39,090 --> 00:01:42,809 Paul Robson: of the input costs also increase, things like fuel and 31 00:01:42,809 --> 00:01:46,109 Paul Robson: utilities such as electricity, really starting to have an impact 32 00:01:46,109 --> 00:01:47,670 Paul Robson: on just the cost of the day- to- day running 33 00:01:47,670 --> 00:01:49,380 Paul Robson: and operational running of those businesses. 34 00:01:50,400 --> 00:01:53,340 Sean Aylmer: Okay. Is it much different to 12 months ago? 35 00:01:54,300 --> 00:01:58,110 Paul Robson: Yeah. The top three that we're seeing is 33% are saying that the 36 00:01:58,110 --> 00:02:01,440 Paul Robson: cost of fuel is increasing and impacting them. We're seeing 37 00:02:01,440 --> 00:02:04,350 Paul Robson: 32% saying that the cost of utilities is increasing and 38 00:02:04,350 --> 00:02:08,190 Paul Robson: impacting them. We're seeing 27% increasing year- on- year saying 39 00:02:08,400 --> 00:02:10,919 Paul Robson: the cost of interest rates What the impact of that 40 00:02:10,919 --> 00:02:13,740 Paul Robson: though is in terms of the statistics, we're seeing that 41 00:02:13,770 --> 00:02:17,639 Paul Robson: 34% of the surveyed small and medium businesses are saying that 42 00:02:17,639 --> 00:02:22,230 Paul Robson: revenue is down year- on- year, and 38% of those 43 00:02:22,230 --> 00:02:24,510 Paul Robson: are saying it's because of those economic conditions that they're 44 00:02:24,510 --> 00:02:27,000 Paul Robson: experiencing in the market right now. So it's having a 45 00:02:27,000 --> 00:02:28,320 Paul Robson: pretty significant impact. 46 00:02:29,100 --> 00:02:32,760 Sean Aylmer: Okay. What about demand? You're saying revenue's down, customers are 47 00:02:32,760 --> 00:02:34,260 Sean Aylmer: feeling it too, I presume then? 48 00:02:34,919 --> 00:02:37,679 Paul Robson: Yeah. What's interesting is what then happens to those small 49 00:02:37,679 --> 00:02:41,160 Paul Robson: businesses. If you think about small businesses got increased costs, 50 00:02:41,219 --> 00:02:44,670 Paul Robson: what's the pressure and how do they deal with that? 51 00:02:44,880 --> 00:02:46,230 Paul Robson: One of the things that we're seeing is that those 52 00:02:46,230 --> 00:02:48,900 Paul Robson: small businesses is now, they're doing one of two or 53 00:02:48,900 --> 00:02:52,320 Paul Robson: three things. They're either passing on that cost to their 54 00:02:52,320 --> 00:02:55,739 Paul Robson: customers through increased price, but they're also in many cases 55 00:02:55,740 --> 00:02:58,410 Paul Robson: deciding to not pay themselves, which is obviously a significant 56 00:02:58,410 --> 00:03:01,858 Paul Robson: impact. Many small businesses start up a business, they've got a dream, 57 00:03:02,010 --> 00:03:05,070 Paul Robson: a passion, a vision. They leave a job that they 58 00:03:05,070 --> 00:03:07,560 Paul Robson: may have had and they start up their dream and 59 00:03:07,560 --> 00:03:10,230 Paul Robson: they invest their own money in their own business. Not 60 00:03:10,230 --> 00:03:14,159 Paul Robson: paying themselves an income can have dramatic impacts. And somewhat 61 00:03:14,460 --> 00:03:17,909 Paul Robson: counterintuitively, what's interesting about that is that the underlying business 62 00:03:17,910 --> 00:03:20,820 Paul Robson: could have been very successful and would've been a great 63 00:03:20,820 --> 00:03:22,680 Paul Robson: business, but the impact of not being able to pay 64 00:03:22,680 --> 00:03:25,739 Paul Robson: themselves means that in some cases they're closing those businesses 65 00:03:25,740 --> 00:03:27,839 Paul Robson: to go back to find employment and income elsewhere. 66 00:03:28,139 --> 00:03:29,910 Sean Aylmer: Yeah, I mean, the point is it's not sustainable. You 67 00:03:29,910 --> 00:03:33,239 Sean Aylmer: can take a haircut on your pay, but only for 68 00:03:33,240 --> 00:03:35,669 Sean Aylmer: a while. And then the same, if I read the 69 00:03:35,670 --> 00:03:38,910 Sean Aylmer: report rightly, there are also profit margins are being squeezed 70 00:03:38,910 --> 00:03:41,010 Sean Aylmer: there, and so people are taking in lower profits. All 71 00:03:41,010 --> 00:03:43,470 Sean Aylmer: that sounds sensible, but that can only last a certain 72 00:03:43,470 --> 00:03:44,130 Sean Aylmer: amount of time. 73 00:03:44,790 --> 00:03:47,010 Paul Robson: Exactly. And so what has to happen is that those 74 00:03:47,010 --> 00:03:49,859 Paul Robson: businesses need to drive themselves to be more efficient. They 75 00:03:49,860 --> 00:03:52,289 Paul Robson: need to drive increased demand, they need to increase their 76 00:03:52,289 --> 00:03:55,770 Paul Robson: revenues, or they need to decrease their costs. And that's 77 00:03:55,770 --> 00:03:58,650 Paul Robson: what effectively this report is saying is that the businesses that have 78 00:03:58,650 --> 00:04:01,890 Paul Robson: invested in things like digital technology to help them become 79 00:04:01,890 --> 00:04:05,280 Paul Robson: more efficient, we know for a fact that organizations that 80 00:04:05,280 --> 00:04:09,179 Paul Robson: implement technology such as MYOB, using a business management platform, 81 00:04:09,420 --> 00:04:13,860 Paul Robson: that ultimately removes repetitive tasks and admin and burden. We 82 00:04:13,860 --> 00:04:17,460 Paul Robson: use this great example of a dance teacher. Dance teachers 83 00:04:17,790 --> 00:04:20,790 Paul Robson: love to teach dance, it's what they do. What they 84 00:04:20,790 --> 00:04:23,700 Paul Robson: don't like doing is the Friday night invoicing run of 85 00:04:23,700 --> 00:04:26,700 Paul Robson: emailing all the parents and sending out invoices and then 86 00:04:26,700 --> 00:04:28,439 Paul Robson: chasing the money to get it back in the bank 87 00:04:28,440 --> 00:04:31,680 Paul Robson: account, and the difficulties of managing that cash flow. What 88 00:04:31,680 --> 00:04:33,690 Paul Robson: they want to do is teach dance, it's what they 89 00:04:33,690 --> 00:04:37,469 Paul Robson: love doing. If you think about that as an example, they 90 00:04:37,470 --> 00:04:40,139 Paul Robson: have to make themselves more efficient. So anything that they 91 00:04:40,139 --> 00:04:43,289 Paul Robson: can pull into their business around, in this case, the 92 00:04:43,290 --> 00:04:46,349 Paul Robson: example that we're giving is technology, that can help automate 93 00:04:46,350 --> 00:04:49,349 Paul Robson: the invoice flow, that can help automate the chasing of 94 00:04:49,379 --> 00:04:52,140 Paul Robson: those payments, that can help automate the ability for them 95 00:04:52,140 --> 00:04:56,099 Paul Robson: to add or remove those repetitive tasks from their business, 96 00:04:56,370 --> 00:04:58,529 Paul Robson: frees them up to do more of what they want 97 00:04:58,529 --> 00:05:00,389 Paul Robson: to do, which is get out there and teach or 98 00:05:00,389 --> 00:05:02,549 Paul Robson: get out there and find more customers. And so we're 99 00:05:02,549 --> 00:05:05,789 Paul Robson: seeing as an example that organizations that have implemented those 100 00:05:05,789 --> 00:05:09,810 Paul Robson: kinds of technologies see on average a saving of two 101 00:05:09,810 --> 00:05:13,169 Paul Robson: to four hours a week of administrative burden. That adds 102 00:05:13,170 --> 00:05:15,059 Paul Robson: up to two working days a month. And if you 103 00:05:15,059 --> 00:05:18,059 Paul Robson: think about small businesses having two more days a month 104 00:05:18,059 --> 00:05:21,569 Paul Robson: to focus on demand generation or reducing cost in other 105 00:05:21,570 --> 00:05:23,729 Paul Robson: areas, that's a pretty significant impact. 106 00:05:24,150 --> 00:05:25,890 Sean Aylmer: Stay with me, Paul. We'll be back in a minute. 107 00:05:32,130 --> 00:05:35,550 Sean Aylmer: My guest this morning is Paul Robson, CEO of MYOB. 108 00:05:36,660 --> 00:05:39,149 Sean Aylmer: Is it just that people kind of get into a 109 00:05:39,150 --> 00:05:41,400 Sean Aylmer: bit of a trend of running their business in a 110 00:05:41,400 --> 00:05:44,580 Sean Aylmer: certain way and it's too busy to look beyond what 111 00:05:44,580 --> 00:05:47,130 Sean Aylmer: they're doing? Maybe if they step back for a bit 112 00:05:47,279 --> 00:05:50,488 Sean Aylmer: and give themselves time to think about technology, to think 113 00:05:50,490 --> 00:05:53,669 Sean Aylmer: about efficiencies, you can make a big difference in the future. 114 00:05:54,480 --> 00:05:56,520 Paul Robson: Yeah. I mean, Sean, we're definitely seeing that. One of 115 00:05:56,520 --> 00:05:59,010 Paul Robson: the things that it's interesting to see is that small businesses that have started 116 00:05:59,520 --> 00:06:01,890 Paul Robson: up in the last 12 months are more optimistic, so 117 00:06:01,890 --> 00:06:05,160 Paul Robson: that's really promising. Now you would say that small businesses 118 00:06:05,160 --> 00:06:07,860 Paul Robson: that have started up recently should be more optimistic because 119 00:06:07,860 --> 00:06:10,200 Paul Robson: they're driving into a new startup, they're super excited and 120 00:06:10,200 --> 00:06:13,380 Paul Robson: they're engaged. But what we are seeing is that startups in 121 00:06:13,380 --> 00:06:15,329 Paul Robson: more recent times, so in the last year or two, 122 00:06:15,630 --> 00:06:18,990 Paul Robson: are implementing digital technology to help them. So we're seeing 123 00:06:18,990 --> 00:06:22,440 Paul Robson: that. To directly answer your question, it's probably best to 124 00:06:22,440 --> 00:06:25,710 Paul Robson: look at the number of organizations that exist in this 125 00:06:25,920 --> 00:06:28,830 Paul Robson: environment, so small and medium businesses, that are not using 126 00:06:28,830 --> 00:06:33,000 Paul Robson: technology to help remove those administrative burdens and are impacting 127 00:06:33,000 --> 00:06:37,890 Paul Robson: their business. One in three Australian businesses are currently making 128 00:06:37,890 --> 00:06:41,850 Paul Robson: important decisions without the full visibility or a clear picture 129 00:06:41,850 --> 00:06:46,529 Paul Robson: of their business. 50% are wasting their time on manual tasks. 130 00:06:46,620 --> 00:06:48,960 Paul Robson: Just to give you some example. At the moment the 131 00:06:48,960 --> 00:06:52,378 Paul Robson: report says that about 50% are not using a digital accounting 132 00:06:52,379 --> 00:06:56,940 Paul Robson: solution. 63% are not using technology to help manage finances. 133 00:06:57,150 --> 00:07:00,359 Paul Robson: And we know that cash flow is king when it 134 00:07:00,360 --> 00:07:02,428 Paul Robson: comes to success or failure of a small business. In 135 00:07:02,428 --> 00:07:05,849 Paul Robson: particular, in the first two to three years, 74% are not 136 00:07:05,849 --> 00:07:10,470 Paul Robson: using any technology for project management, 75% for employee management, 137 00:07:10,799 --> 00:07:14,340 Paul Robson: and 79% are not using any technology for their sales 138 00:07:14,340 --> 00:07:18,120 Paul Robson: and marketing activities, the very factors that drive demand and help 139 00:07:18,330 --> 00:07:21,660 Paul Robson: you increase your revenue. So we are seeing the businesses 140 00:07:21,660 --> 00:07:25,079 Paul Robson: right now that are not implementing technology are being impacted. 141 00:07:25,290 --> 00:07:29,489 Paul Robson: The newer ones that are, are significantly more optimistic about the future. 142 00:07:30,389 --> 00:07:32,490 Sean Aylmer: There's some low- hanging fruit in what you just said, 143 00:07:32,490 --> 00:07:36,120 Sean Aylmer: just astounding, I mean, in terms of people management. Basically 144 00:07:36,120 --> 00:07:39,990 Sean Aylmer: you're saying four in five. Don't use a technology system. 145 00:07:40,349 --> 00:07:44,099 Sean Aylmer: Just keeping control of costs and things like that, surely 146 00:07:44,099 --> 00:07:45,149 Sean Aylmer: everyone should be using one. 147 00:07:46,020 --> 00:07:49,530 Paul Robson: Well, certainly that's our view. We believe that digital technology 148 00:07:49,530 --> 00:07:52,560 Paul Robson: is an enabler. But it's true. I mean, if you 149 00:07:52,560 --> 00:07:56,099 Paul Robson: think, Sean, that in many cases a small business startup 150 00:07:56,099 --> 00:07:59,370 Paul Robson: may start using a product like Excel, but very quickly 151 00:07:59,370 --> 00:08:01,199 Paul Robson: the business may run away from them and they start 152 00:08:01,200 --> 00:08:05,250 Paul Robson: to focus on just dealing with the administrative burden. I 153 00:08:05,250 --> 00:08:08,369 Paul Robson: spend countless, countless hours out talking to our customers, and 154 00:08:08,370 --> 00:08:11,550 Paul Robson: it's just really great experiences talking to everything from someone 155 00:08:11,550 --> 00:08:14,190 Paul Robson: who started up a services business, maybe as an architect 156 00:08:14,190 --> 00:08:16,170 Paul Robson: or a lawyer, through to someone who started up a 157 00:08:16,170 --> 00:08:19,200 Paul Robson: lawn mowing business or a dog grooming business. And it's 158 00:08:19,259 --> 00:08:23,580 Paul Robson: amazing, there's a recurring theme that is they have a vision, a 159 00:08:23,580 --> 00:08:26,820 Paul Robson: passion, they execute on the vision and passion, but they 160 00:08:26,820 --> 00:08:30,030 Paul Robson: get caught up in this administrative burden. And the number 161 00:08:30,030 --> 00:08:32,670 Paul Robson: one thing that I hear is, " I spend my nights 162 00:08:32,670 --> 00:08:35,578 Paul Robson: and weekends just dealing with the administrational running of my 163 00:08:35,580 --> 00:08:39,059 Paul Robson: company, of my business and my dream." And you add 164 00:08:39,059 --> 00:08:41,249 Paul Robson: onto that the macro piece that we're seeing now, which 165 00:08:41,250 --> 00:08:45,510 Paul Robson: is rising interest rates, cost of doing business, utilities increasing, 166 00:08:45,570 --> 00:08:48,420 Paul Robson: it's putting a lot of pressure. And certainly from the 167 00:08:48,420 --> 00:08:50,429 Paul Robson: view that we have, we look at that and say, " There's 168 00:08:50,429 --> 00:08:53,429 Paul Robson: one really easy way to remove that pressure. You can 169 00:08:53,429 --> 00:08:57,090 Paul Robson: invest in digital technology that give you back that time, 170 00:08:57,270 --> 00:08:59,969 Paul Robson: that can take away those administrative burdens." So certainly our 171 00:08:59,969 --> 00:09:03,030 Paul Robson: belief is that digital technology and investment in that makes 172 00:09:03,030 --> 00:09:06,600 Paul Robson: a material difference to the success of small and medium businesses. 173 00:09:07,170 --> 00:09:10,590 Sean Aylmer: Paul Robson, you've been CEO of MYOB since May last 174 00:09:10,590 --> 00:09:13,500 Sean Aylmer: year, I think. Have you been impressed by what you've 175 00:09:13,500 --> 00:09:16,170 Sean Aylmer: seen with the Australian SME market? 176 00:09:16,830 --> 00:09:18,870 Paul Robson: I tell you one thing that is just amazing, Sean, 177 00:09:18,870 --> 00:09:22,650 Paul Robson: is just how much entrepreneurial spirit exists in this country 178 00:09:22,650 --> 00:09:24,990 Paul Robson: and it's just awesome. Again, I just mentioned some of 179 00:09:24,990 --> 00:09:27,719 Paul Robson: those examples. But getting out there and just speaking to 180 00:09:27,719 --> 00:09:31,950 Paul Robson: people, you're talking to individuals that are taking a huge 181 00:09:31,950 --> 00:09:34,888 Paul Robson: risk. In many cases, they're leaving a job that they 182 00:09:34,889 --> 00:09:37,230 Paul Robson: had that had somewhat of consistent income to it. They 183 00:09:37,230 --> 00:09:39,870 Paul Robson: may be working for a larger business or what have 184 00:09:39,870 --> 00:09:43,200 Paul Robson: you. But now what they're doing is they're jumping in 185 00:09:43,200 --> 00:09:46,950 Paul Robson: with this passion into this dream. And so hearing about 186 00:09:46,950 --> 00:09:49,800 Paul Robson: those stories is amazing. On the flip side of it, 187 00:09:49,889 --> 00:09:52,260 Paul Robson: we also spend a lot of time talking to customers 188 00:09:52,260 --> 00:09:54,120 Paul Robson: that are having a hard time right now, that are 189 00:09:54,330 --> 00:09:57,000 Paul Robson: struggling with demand, struggling with the pressures in the environment. 190 00:09:57,000 --> 00:09:58,858 Paul Robson: And so what I would say is we're seeing a 191 00:09:58,860 --> 00:10:01,228 Paul Robson: lot of resiliency. We're seeing a lot of organizations asking 192 00:10:01,230 --> 00:10:03,870 Paul Robson: for help. " How do I get more engaged?" We're seeing 193 00:10:03,870 --> 00:10:09,210 Paul Robson: a lot of organizations engaging on training, on digitization. I'm 194 00:10:09,210 --> 00:10:12,270 Paul Robson: super excited, as a son of a small business owner, 195 00:10:12,299 --> 00:10:14,910 Paul Robson: a grandson of a small business owner, my wife has 196 00:10:14,910 --> 00:10:17,730 Paul Robson: run a number of small businesses, I get the challenges, 197 00:10:17,730 --> 00:10:21,239 Paul Robson: I've worked in small business myself. It's a lifestyle. It's 198 00:10:21,240 --> 00:10:23,789 Paul Robson: what you do day in, day out. And that's why 199 00:10:23,790 --> 00:10:26,670 Paul Robson: I love MYOB. From what we do, our mission has 200 00:10:26,670 --> 00:10:29,730 Paul Robson: always been to help small and medium businesses start, survive, 201 00:10:29,760 --> 00:10:32,670 Paul Robson: and ultimately succeed. That's a mission and a purpose that 202 00:10:32,670 --> 00:10:36,240 Paul Robson: really resonates to me and it resonates with our team. 203 00:10:36,600 --> 00:10:39,480 Paul Robson: And so being able to just be part of that 204 00:10:39,480 --> 00:10:42,510 Paul Robson: journey and being someone that can help small businesses succeed, 205 00:10:43,440 --> 00:10:45,810 Paul Robson: it's really valuable. Very much enjoying the role. 206 00:10:46,170 --> 00:10:48,478 Sean Aylmer: Fantastic. Paul, thank you for talking to Fear and Greed. 207 00:10:48,779 --> 00:10:50,218 Paul Robson: Sean, thank you so much for having us. 208 00:10:50,970 --> 00:10:54,240 Sean Aylmer: That was Paul Robson, CEO of MYOB, which is a 209 00:10:54,240 --> 00:10:56,729 Sean Aylmer: great supporter of this podcast. This is The Fear and 210 00:10:56,730 --> 00:10:59,458 Sean Aylmer: Greed daily interview. Join us every morning for the full 211 00:10:59,460 --> 00:11:02,610 Sean Aylmer: episode of Fear and Greed, Australia's most popular business podcast. 212 00:11:02,670 --> 00:11:04,319 Sean Aylmer: I'm Sean Aylmer, enjoy your day.