Sensis® Women's Business Index May 2007

Table of contents

Introduction 

The primary objectives of the Sensis® Business Index are to track small and medium business activity over the past three months; expectations over both the next three and 12 months; and to measure overall confidence within the small business community.  A second purpose is to provide an independent, objective channel for reporting proprietors' experience and attitudes on key issues. 

The Women's Business Index analyses the Sensis® Business Index results by gender, and compares results for SMEs predominantly operated by females with SMEs in general.

The Sensis® Business Index is an initiative of Sensis as part of its commitment to this vital business sector. Surveying was conducted by Sweeney Research over the period 24 April to 31 May 2007.

This report was completed for the Australian Government Office for Women.

About the Survey

Since its inception in 1993, the Sensis® Business Index has been one of the most extensive and regular surveys of small businesses in Australia. Historically, the Sensis® Business Index has focused specifically on businesses employing 19 people or fewer. In November 2000 it was expanded to cover the medium business sector, while the regional and industrial sectors were also enhanced.

The May 2007 Sensis® Business Index results are based on telephone interviews conducted with 1,800 small and medium business proprietors. The sample size is divided between 1,400 small businesses and 400 medium businesses (the latter defined as businesses employing between 20 and 199 people).

Businesses interviewed for the May 2007 Sensis® Business Index were drawn from all metropolitan and major non-metropolitan regions within Australia. Quotas were set on geographical location and type of business in order to produce the standard sample structure shown below. Where replacement businesses are recruited, this sample structure is maintained.

At the analysis stage, results were weighted by selected Australian New Zealand Standard Industrial Classification (ANZSIC) divisions within the metropolitan and non-metropolitan region of each state and territory. This ensured the sample reflected the actual small and medium business population distribution. The Australian Bureau of Statistics (ABS) Business Register, as at June 1998, was used to weight the sample to be representative of the total business population.

The Sensis® Business Index asks whether there is more than one predominant decision-maker in the business.  Where there is only one predominant decision-maker, the survey records the gender of that decision-maker.  Where there is more than one predominant decision-maker in the business, the survey records whether the predominant gender is female, male or an equal mix of female and male operators.  These results are then used for the Women's Business Index.  In the May 2007 Sensis® Business Index, 14 per cent of the SMEs in the weighted sample were predominantly operated by females, with 71 per cent predominantly operated by males, and 15 per cent being equally operated by both males and females as joint decision makers.

All results in the Women's Business Index are based on the responses of those businesses surveyed.  Results are reported as a net balance, which represents the total number of positive responses minus the total number of negative responses.

Interviewing for this latest survey was conducted over the period 24 April to 31 may 2007

Location of business
  Total Metro Non-metro
New South Wales 300 240 60
Victoria 300 240 60
Queensland 300 165 135
South Australia 225 195 30
Western Australia 225 195 30
Tasmania 150 90 60
Northern Territory 150 90 60
Australian Capital Territory 150 150 -

Total

1800 1365 435

 

Division
Manufacturing 200
Building/Construction 250
Wholesale Trade 150
Retail Trade 250
Accommodation, Cafes and Restaurants 100
Transport/Storage 150
Finance and Insurance 100
Communication, Property and Business Services 300
Health and Community Services 150
Cultural, Recreational and Personal Services 150
Total 1800

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Confidence in own business prospects over the next twelve months 

May 2007 Sensis® Business Index found levels of confidence amongst small and medium enterprises (SMEs) that were predominantly operated by women increasing strongly to record their highest level since August 2005.

The increase recorded in the past quarter for female-operated SMEs brought confidence up to a level of 65 per cent net, an increase of 12 percentage points in the past quarter.  This resulted in the level of confidence for female-operated SMEs being some 14 percentage points higher than at the same time in the previous year.

Overall confidence - May 2007
  Female Male Mixed Total
Extremely confident 9% 16% 17% 15%
Fairly confident 65% 54% 55% 56%
Neutral 17% 17% 14% 17%
Fairly worried 7% 9% 12% 9%
Extremely worried 2% 3% 2% 3%
Total confident 74% 70% 72% 71%
Total worried 9% 12% 14% 12%

*Net Balance

*65% *58% *58% *59%
Q: Thinking about the next twelve months, how confident do you feel about your business prospects?

Predominantly female-operated SMEs recorded increasing business confidence with a net balance result of 65 per cent.  This was comprised of 74 per cent of female-operated SMEs that were confident about their business prospects for the year ahead and nine per cent that were worried.  These figures compare with net confidence of 59 per cent for SMEs overall, 58 per cent in SMEs that were predominantly operated by males and in those SMEs where the key decision making was equally split between males and females, and resulted in female-operated SMEs being the most confident of any gender-based group.
 

Changes in SME net confidence by gender
Net confidence May
2006
Aug
2006
Nov
2006
Feb
2007
May
2007
Predominantly female operated SMEs 51% 51% 43% 53% 65%
Predominantly male operated SMEs 50% 45% 49% 56% 58%
SMEs operated by both female and male operators 41% 41% 62% 60% 58%
All SMEs 48% 45% 50% 56% 59%
* Net Balance defined as the proportion who are positive less the proportion who are negative

The increase in confidence recorded by female SME operators was in line with increases in confidence reported by all SMEs on average.  However, the increase of 12 percentage points recorded by female SME operators was considerably larger than the average increase in confidence of three percentage points recorded by SMEs.

Female SME operators were more likely to say that their confidence was based on having business experience or an established business than other gender-based groups. Other key reasons for confidence amongst female SME operators included  having plenty of work coming up, not expecting conditions to change, having good customer relations and being in a growth industry.

Five top reasons for confidence - May 2007

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Concerns of female business operators 

The top issue facing female-operated SMEs in May 2007 was a lack of work or sales, which was reported as a problem by 18 per cent of predominantly female-operated SMEs.  The extent of this problem for female SME operators rose by a further three percentage points over the past quarter, following a rise of four percentage points in the preceding quarter, and was again higher than for any other gender-based group.  On average, 10 per cent of SMEs reported problems with a lack of work or sales.

The next most pressing issue for female SME operators was finding and keeping staff, which was reported by 12 per cent of female SME operators.

While finding staff was one of the key problems facing female SME operators, it was reported at a slightly lower level than for other gender-based groups.  Overall, some 14 per cent of SME operators reported having a problem finding or keeping staff in May 2007, with male‑operated SMEs most likely to report problems in this area (14 per cent).  Although still at a very high level when viewed from an historical perspective, the proportion of SMEs reporting problems in this area declined from last quarter’s high, with consistent falls across each gender-based group.

Cash flow was reported as a problem by 10 per cent of female SME operators, an increase of one percentage point since last quarter.  This was higher than the eight per cent of SME operators on average that reported problems with cash flow, and was the highest result for any gender-based group.

Overall, 31 per cent of predominantly female‑operated SMEs reported currently having no significant problems affecting their businesses.  This has risen from 20 per cent last quarter; however it was marginally lower than the 32 per cent of SMEs on average that reported having no concerns in the past quarter.

Prime concerns - female operated SMEs

Prime concerns - all SMEs

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Sales, Employment and Wages 

Sales

Female-operated SMEs reported the lowest sales performance over the past quarter of any gender-based group. A negative net balance of four per cent of female-operated SMEs reported having increased their sales over the past quarter, a fall of 26 percentage points from the previous quarter's result.   This means that four per cent more female-operated SMEs actually recorded lower sales than higher sales, bucking the strong result recorded for SMEs on average.

However, in the coming quarter female-operated SMEs were more likely to be expecting to increase their sales than other gender groups.  A net 40 per cent of female-operated SMEs were expecting to increase their sales, down by five percentage points in the past quarter.

Value of Sales
  Female Male Mixed Total
Last Quarter        
Experienced increase 31% 47% 33% 43%
No change 33% 30% 35% 31%
Experienced decrease 35% 23% 31% 26%
*Net Balance -4% +24% +2% +17%
Current Quarter        
Expect increase 47% 46% 40% 45%
No change 46% 38% 49% 41%
Expect decrease 7% 15% 11% 13%
*Net Balance +40% +31% +29% +32%


Employment

Female-operated SMEs net growth in employment rose over the past quarter; however it remained the lowest of any gender-based group.  A net balance of two per cent was an increase of two percentage points from last quarter's result of net zero per cent.  Overall, a net positive five per cent of SMEs reported having increased their employment. 

Looking ahead, female-operated SMEs reported improved expectations in employment for the current quarter.  A net eight per cent of female-operated SMEs were expecting to increase their employment levels, a rise of four percentage points from last quarter's expectation.

Size of workforce
  Female Male Mixed Total
Last Quarter        
Experienced increase 12% 14% 21% 15%
No change 78% 76% 68% 75%
Experienced decrease 10% 10% 10% 10%
*Net Balance +2% +4% +11% +5%
Current Quarter        
Expect increase 11% 15% 8% 13%
No change 85% 82% 89% 83%
Expect decrease 3% 2% 3% 2%
*Net Balance +8% +13% +5% +11%


Wages

Fewer SMEs operated by females reported increases in their wages bills over the last quarter, with 11 per cent of female-operated SMEs reporting a net increase in wages compared to 15 per cent in the previous quarter.  This result was marginally lower than the average result for SMEs.

Looking ahead, female-operated SMEs had the lowest expectations in the level of wages increases in the current quarter of any gender-based group.  SMEs that were equally operated by female and male decision makers were expecting the highest level of wages increases in the current quarter.



Wages bill
  Female Male Mixed Total
Last Quarter        
Experienced increase 21% 26% 24% 25%
No change 64% 58% 54% 58%
Experienced decrease 10% 12% 19% 13%
*Net Balance +11% +14% +5% +12%
Current Quarter        
Expect increase 21% 26% 24% 25%
No change 69% 63% 72% 65%
Expect decrease 6% 7% 3% 6%
*Net Balance +15% +19% +21% +19%

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Capital expenditure performance and trends 

Performance

Female-operated SMEs reported the lowest net increase in capital expenditure in the last quarter.

SMEs operated by females reported a significant decrease in capital expenditure over the last quarter, with a net balance result of negative 27 per cent for female-operated SMEs compared to net negative 12 per cent last quarter. This result primarily represents a decrease of 15;percentage points in the proportion of female-operated SMEs that reported having increased their capital expenditure.

However, looking ahead, female-operated SMEs were expecting above average levels of net capital expenditure increases in the current quarter. 

Capital expenditure
  Female Male Mixed Total
Last Quarter        
Experienced increase 18% 28% 20% 25%
No change 34% 48% 45% 46%
Experienced decrease 45% 22% 29% 27%
*Net Balance -27% +6% -9% -2%
Current Quarter        
Expect increase 27% 26% 27% 26%
No change 45% 45% 45% 45%
Expect decrease 25% 26% 23% 25%
*Net Balance +2% 0% +4% +1%


Trends

Capital expenditure for SMEs has an annual cyclical pattern.This cycle generally peaks in the August quarter, as these results include the end of financial year spending, with the low point generally in May.The pattern for female-operated SMEs is more enhanced than for SMEs in general, and over the timeframe of the Women's Business Index, female-operated SMEs have tended to have higher peaks in August than other gender-based groups, and also lower troughs in May quarters. The other key trend to note is that the 2006-07 capital expenditure cycle for female-operated SMEs was at lower levels overall than was the case for the 2005-06 cycle. 

Capital expenditure trends - past five quarters
Predominantly female-operated SMEs
  May
2006
Aug
2006
Nov
2006
Feb
2007
May
2007
Last Quarter
Experienced increase 18% 26% 19% 19% 18%
No change 41% 43% 47% 47% 34%
Experienced decrease 33% 26% 31% 31% 45%
*Net Balance -15% 05 -12% -12% -2.7%
Current Quarter
Expected increase 27% 21% 23% 21% 27%
No change 41% 48% 47% 51% 45%
Expected decrease 27% 30% 30% 28% 26%
*Net Balance 0% -9% -7% -7% +2%

In August 2006, the capital expenditure indicator for female-operated SMEs was recorded at zero per cent, which was actually the highest result for any gender-based group. Traditionally, August is the highest quarter for all SMEs, and this was the case for female-operated SMEs, however the August 2006 result for SMEs overall was actually the lowest result on record, bucking the traditional end of financial year spend. This was mainly caused by a slump in capital expenditure by male-operated SMEs, with female-operated SMEs still recording very strong performance.

From the August 2006 high, capital expenditure performance for female-operated SMEs has fallen in line with the annual pattern, with the May 2007 result for female-operated SMEs being the lowest of any gender-based group.

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Profitability performance and trends 

Performance

Female-operated SMEs reported below average profitability performance in May 2007. With a net balance of positive three per cent, this was a decrease from the net 12 per cent of female-operated SMEs that reported increased profitability last quarter.

For the current quarter, a net balance of 36 per cent of female-operated businesses were expecting an increase in profitability, down marginally from 37 per cent last quarter, and the highest expectation of any gender-based group.

Profitability
  Female Male Mixed Total
Last Quarter        
Experienced increase 33% 42% 26% 39%
No change 35% 32% 41% 34%
Experienced decrease 30% 25% 37% 27%
*Net Balance +3% +17% -7% +12%
Current Quarter        
Expect increase 44% 43% 34% 41%
No change 48% 42% 47% 43%
Expect decrease 8% 15% 18% 14%
*Net Balance +36% +28% +16% +27%


Trends

The latest decrease in the net proportion of female-operated SMEs reporting increases in profitability reflected a fall from the high results recorded for the previous four quarters.

In contrast, profitability performance rose over the past quarter for SMEs on average, in line with increases in sales. It is interesting to look at how the profitability performance for female-operated SMEs varies compared to other gender groupings. The result for female-operated SMEs have been, historically, more volatile than the results for SMEs in general. However, over the last year this pattern has changed, and, with the exception of this latest quarter, female-operated SMEs have been more likely to record increased profitability than other gender groups. In fact, for four of the last five quarters, female-operated SMEs have recorded the highest net profitability results.

Looking over the thirteen quarters of the Women's Business Index, female-operated businesses have now recorded the highest results in profitability of seven of those quarters, over half of the time period in question. For four quarters of the thirteen, the results for female-operated SMEs have been the lowest for any gender-based group, reflecting the significant volatility that has been apparent up to a year ago.

The profitability expectations of female-operated SMEs are generally optimistic, with the resultant performance, although strong over the past year, generally falling short of expectations. This has occurred in all but one quarter over the last 13 quarters. This is not an unusual occurrence, as expectations for profitability for SMEs are, in general, higher than the resultant performance.

Profitability trends - past five quarters
Predominantly female-operated SMEs
  May-2006 Aug-2006 Nov-2006 Feb-2007 May-2007
Last Quarter
Experienced increase 33% 31% 38% 34% 33%
No change 35% 42% 35% 43% 35%
Experienced decrease 30% 26% 24% 22% 30%
*Net Balance +3% +5% +14% +12% +3%
Current Quarter
Expected increase 40% 47% 36% 50% 44%
No change 40% 44% 47% 35% 48%
Expected decrease 18% 9% 16% 13% 8%
*Net Balance +22% -+38% +20% +37% +36%

Trends in capital expenditure by gender

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Prices 

In May 2007 female-operated SMEs reported a level of net increase in prices that was the lowest of any gender-based group, at net 12 per cent. In addition, there was a significant fall from the previous quarter's result of net 22 per cent. Overall, prices growth amongst all SMEs continued to soften in May 2007. Female-operated SMEs have reported the lowest level of price increases of any gender group for every quarter bar one since November 2005.

Looking forward, female-operated SMEs are again the least likely of any gender-based group to be expecting to increase their prices in the current quarter, with their net expectation dropping from 28 per cent to 22 per cent.

Prices charged
  Female Male Mixed Total
Last Quarter        
Experienced increase 15% 23% 22% 21%
No change 83% 74% 76% 75%
Experienced decrease 3% 4% 2% 3%
*Net Balance +12% +19% +20% +18%
Current Quarter        
Expect increase 22% 28% 28% 27%
No change 78% 69% 71% 72%
Expect decrease 0% 3% 1% 3%
*Net Balance +22% +25% +27% +22%

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Perceptions of the economy 

Perceptions of the economy amongst female-operated SMEs continued to improve strongly over the past quarter, with a net balance of 41 per cent of female-operated SMEs reporting that they felt the economy was currently in a growth phase.This was the highest result for female-operated SMEs since the inception of the Women's Business Index three years ago in May 2004, with the next highest result being 37 per cent in November 2004.
This latest result represents an increase of 14 percentage points over the past quarter, and an increase of 32 percentage points over the past year.  Whilst the result for female-operated SMEs was still below the average result, the last two quarters have seen all gender-based groups recording strong rises in net perceptions of the economy.

The expectations for the economy for the coming year were also strong for female-operated SMEs, as they were for SMEs overall. Only seven per cent of female SME operators felt that the Australian economy would be worse in 12 months time.

Perception of economy - female operated SMEs

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Technology and gender 

Whilst technology usage amongst female‑operated SMEs has traditionally lagged their male counterparts, usage levels have significantly improved over the past twelve months. Overall, the proportion of female-operated SMEs with a computer of any type was marginally lower than for male-operated SMEs (95 per cent compared to 97 per cent), however the proportion of female‑operated SMEs with a notebook computer was actually higher than for male‑operated SMEs. There was strong growth in notebook computer ownership amongst female‑operated SMEs, up 15 percentage points over the past year.

Internet penetration amongst female-operated SMEs lagged that of their male-operated counterparts. Overall, some 87 per cent of female‑operated SMEs had an internet connection, compared to 93 per cent of male-operated SMEs. Overall, female-operated SMEs were less likely to have a broadband connection (79 per cent compared to 86 per cent for male-operated SMEs).The take-up of broadband in female-operated SMEs was mainly lower due to their slightly lower propensities to have a computer or an internet connection. Of those SMEs that had an internet connection, the proportion of female-operated SMEs with a broadband connection was the same as for male-operated SMEs (92 per cent).

Over the past year, one of the most exciting areas for technology uptake in female-operated SMEs was in the use of e-commerce. Whilst traditionally female-operated SMEs have lagged male-operated SMEs, the last twelve months has seen significant growth for female-operated SMEs in using technology to sell online. An additional five per cent of female‑operated SMEs reported selling online. The increase from 43 per cent to 48 per cent this year means that now close to half of all female-operated SMEs sell online, with this proportion now behind male-operated SMEs by only one percentage point.

Indeed, this is again influenced by the lower proportion of female‑operated SMEs that are online, and it is interesting to examine the data looking at those SMEs that had an internet connection.Of female-operated SMEs that had an internet connection, some 56 per cent were selling online, compared to only 52 per cent of male‑operated SMEs.  

SME technology usagee by gender

Female operated SMEs selling online - trends

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