MIXED PROSPECTS FOR LOCAL CHINESE BUSINESSES
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February 2017 – The economic outlook for local Chinese businesses is mixed, according to a survey by accounting software provider MYOB.
The latest MYOB Business Monitor survey reveals that one-third of Chinese business owners say their business’s revenue is up on a year ago, 26 percent say revenue has declined, while 41 percent say it is about the same.
When asked how they think revenue will track during the Year of the Rooster, 32 percent believe revenue will go up, 30 percent say revenue will go down and 38 percent say it will stay about the same.
Local operators are just as divided when asked about the wider economy. Thirty percent believe general conditions will improve, 25 percent say conditions will decline, 39 percent say remain the same and 6 percent do not know.
‘Chinese small business operators are taking a wait-and-see approach to the overall economy,’ says MYOB New Zealand General Manager Carolyn Luey.
‘It’s good to see several businesses enjoying strong revenue growth and good prospects for the year ahead. However, for those businesses who are predicting a decline, there are several steps they can take to mitigate any downturn.
‘Upgrading to the latest MYOB cloud-accounting software can help business owners keep a close watch on key performance metrics like cash flow, age of debtors and sales.
‘If business owners need any help, their accountant or financial advisor is always the best source of advice for helping manage any kind of trading environment.’
‘MYOB has worked alongside New Zealand Chinese businesses for more than 25 years. Many business owners in the community tell us they like the control that modern accounting software gives them over their operations.
‘Our accounting software products are used by more New Zealand businesses than any other provider and we’d be happy to talk to any Chinese business owners who would like to trial it for free.’
Ms Luey says operators need to be aware of key pressures building, especially with a more constrained forecast for the year ahead.
‘Particularly concerning are things such as competitive activity, which 27 percent of businesses earmarked as a source of pressure,’ she says.
‘Several operators are also concerned about price margins and cashflow which points to a need for a greater focus on solid, reliable accounting systems.’
Top three pressures for Chinese business operators in 2016:
- Competitive activity – 27 percent
- Price margins – 25 percent
- Cashflow – 24 percent
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Improving the skills of staff was particularly important to Chinese owned small businesses over the last year.
Twenty-three percent reported they invested in further training for their employees over the last 12 months. This is likely due to the fact Chinese owned businesses also reported a shortage of skilled workers, with 20 percent saying it’s an issue.
Other investments in the previous 12 months included computer hardware or software (22 percent), conducting an organisational restructure (17 percent) and market research (14 percent).
‘It’s very positive to see Chinese business operators embracing the opportunity to upskill their employees,’ says Ms Luey.
‘We know from other surveys that the lack of skilled workers is a big issue for the whole economy, so the investment in training being made by the Chinese business community will go some way to improving this in the coming year.
‘Another positive is how many Chinese operators are satisfied with their work/life balance. Sixty-four percent are satisfied with the balance they have achieved.
‘It can of course be difficult to find time for life outside business when you’re working hard, but it’s very important to make time for yourself – not just to relax but also to recoup energy and inspiration for the year ahead.
‘Chinese New Year is a particularly appropriate time to get together with friends and family. MYOB wishes everyone in the Chinese community a prosperous Year of the Rooster,’ says Ms Luey.
The MYOB Business Monitor is a national survey of 1,000+ New Zealand small and medium business owners and managers, from sole traders to mid-sized companies, representing the major industry sectors. This most recent survey ran in July/August 2016.
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