Weekly Pulse - November 7
Dynamic Business
Dynamic Business provides small businesses, startups and entrepreneurs with business news, inspiration and expertise.
Best business stories from last week:
1. Let’s Talk: What are some innovative and low-cost marketing strategies?
2. Founder Friday with Tushar Menon: the secrets to building a $200m health food empire
3. Tech Tuesday: The top 13 accounting tools for your business needs
Small businesses need to keep a tight rein on their finances to succeed and continue to run profitable businesses. And one of the more difficult tasks for small business owners is keeping track of their finances.
Online accounting services for SMEs are not a magic cure, but they can help you feel more in control of your finances and give you the power to make better business decisions.?
We have compiled a list of accounting software options for small businesses and what makes them unique in this week’s edition of Tech Tuesday.
Koinly
Koinly is a?crypto tax calculator?that caters to accountants, investors and traders at all levels. Whether it’s crypto, DeFi or NFTs, users can quickly generate a tax report built to comply with ATO guidance.
Koinly’s?Accountant Platform?lets accountants invite clients to view, track and categorise their crypto transactions all from one dashboard, with integrations across over 700 wallets, exchanges and blockchains. Koinly’s Australian General Manager, Adam Saville-Brown, says, “Koinly’s platform is built to comply with Australian tax standards, and now with an Australian local-time customer support line.”
In Australia, the 2021-2022 tax deadline is 31 October, so if accountants have clients’ crypto taxes to complete, Koinly can help to navigate the complexities of crypto tax – getting them done quickly and easily.?
Find out more?here.
Zoho Books
Zoho Books?is an?online?accounting?software that helps businesses manage their finances, stay GST-ready, automate workflows and work collectively across departments. A decade since its launch, Zoho Books has?evolved from serving solely small businesses to solving the complex financial challenges of enterprises.?
From deal negotiation to raising sales orders and invoicing, Zoho Books handles mundane?accounting?tasks so businesses can focus on the bigger picture. And with role-based access, team members can add colleagues and accountants to the organisation so they can log time, view reports, or manage accounts.?
Crucially, Zoho Books ensures GST compliance. When creating a new invoice or transaction, Zoho Books automatically determines the correct GST rate and tax treatment, helps businesses generate BAS reports that account for GST liabilities, and access tax reports that are ready to be exported and filed during tax season.?Zoho Books integrates seamlessly with Zoho’s extensive suite of over 50 business applications – from CRM and marketing to analytics and collaborative tools – as well as multiple third-party?accounting, finance and payments platforms.?
For more, visit:?Zoho Books.
KeyPay
Online payroll software,?KeyPay, is designed to make accountants’ life easier by integrating with accounting platforms and automating the entire payroll process from start to finish. KeyPay streamlines several processes, such as importing timesheet data, gross-to-net reporting, leave accruals for all scenarios, as well as payroll and super calculations and ATO reporting.?
Since launching in 2013, more than 139 million timesheets have been approved in KeyPay. As one of the only Australian payroll software to automate annual award reconciliations and employee calculations in line with Fair Work, KeyPay simplifies legislation compliance. Its intuitive self-service portal also allows staff to manage their own timesheets, payslips, leave and more, saving time on employee management.
More?here.
Thryv
Thryv?is a software platform designed to help small businesses accelerate their growth by automating time-consuming but essential admin-related tasks.
Regardless of the industry in which they operate, Thryv helps to solve the?accounting?challenges of SMBs via digitisation and automation. The key benefits include (but aren’t limited to) ensuring payments are tracked from start to end, aligning customer purchases to invoices and automating payment follow-ups.
More?here.
Ignition
Ignition?is the world’s first client engagement and commerce platform for professional services to transform how they do business with their clients. The platform replaces the many manual processes?accounting?firms use to engage, bill and get paid by clients. Ignition enables accountants to easily send digital proposals and engagement letters and automate billing and payments all in one platform.
Ignition integrates with leading business apps such as QuickBooks, Xero and Zapier to streamline service-based commerce. The platform is used by nearly 6,000 accounting, bookkeeping and professional services businesses, with over one million client engagements and over AUD $3 billion in client payments.?
Ignition recently launched a new proposal and engagement letter template gallery?with over 80 templates globally, created by industry experts and partner associations, including Chartered Accountants ANZ. Proposal templates range from monthly accounting, bookkeeping and payroll services to tax and people advisory services and are presented in three option packages, with suggested pricing, services and billing schedules.?
Learn more about Ignition?here.?
Kofax
Automating end-to-end accounts payable processing is a big win. Whether enterprises are dealing with high volumes of invoices, gaps in the ERPs coverage or compliance issues, like meeting new mandates for e-invoicing, streamlining the AP processes can have a huge impact. Automation can provide significant cost savings by simply eliminating manual tasks. Kofax AP Agility is an automated accounts payable and invoice processing solution that enables organisations to capture early payment discounts and avoid late payments.
Data capture capabilities across various financial documents from any source allow the organisation to save time and optimise workflow. Accelerate your digital workflow transformation journey with out-of-the-box approval processes to realise intelligent automation.
More?here.
Class Trust
We estimate there are over 500,000 trusts in Australia that hold investment assets, and the majority of those have their Financial Statements and Tax Returns prepared manually, entering numbers into Excel and creating time-consuming journal entries on non-investment ledger systems. The process is manual, disjointed, highly prone to error and just not scalable.
Class Trust empowers users to simplify and automate their?accounting?and administration for investments held within a unit or discretionary trusts in an industry-first cloud solution.?It’s powered by more than 220 direct connected data feeds from banks, brokers and platforms, which are enriched by the Class engine.?This also supports Class Super, Australia’s first cloud-based SMSF administration solution, with an automated general ledger for capital gains and income, including tax statements, direct property, forex and corporate actions.?
In addition, Class Trust is now end-to-end with the addition of a powerful new feature, electronic lodgement of the trust tax return through automated pre-fill directly from your general ledger.
For further information, please visit?Class Trust?
Payapps?
Payapps is a cloud-based collaboration tool that connects builders and subcontractors to standardise and streamline the submission and approval of payment claims on construction projects. Originating in Australia, Payapps was launched in the UK in 2016,?and is trusted globally by thousands of customers for the construction progress payment process.?
The construction industry is notoriously fraught with risk, so Payapps is trying to disrupt the industry by creating a software that digitises payment processes to reduce the risk of human error or delayed submission of claims.?It replaces an inefficient and error-prone manual process with an innovative, accessible online process that is simpler, faster, fairer, and more transparent.?
More?here.
Weel
Weel (Previously DiviPay) is a smart corporate card and finance automation platform built to streamline company-wide spending. Businesses use its platform to create bespoke spend management solutions, so they can control who can spend money, on what, where and who finally approves it.
Instead of finance teams having to chase employees for missing receipts and irresponsible purchases, Weel helps distribute the responsibility of budgeting and expense reporting across the entire organisation. Businesses can instantly issue employees with their own virtual card and set custom rules and budget limits to control spending proactively. The platform also enables finance teams to automate aspects of their month-end reporting process with powerful, out-of-the-box accounting integrations.
More?here.
?Intuit QuickBooks’
Intuit QuickBooks’ Cash Flow Planner?is an essential tool for SMBs to stay on top of their?accounting?and control their finances.?
It uses historical financial data to forecast future money-in and money-out events. You can add and adjust future events to see how certain changes affect your cash flow. You can even include tax liabilities like GST to make preparing and paying your BAS a breeze.
Intuit QuickBooks Cash Flow lets you see how your business is doing in real time because every transaction syncs right to your dashboard so that you can monitor all of your business balances all in one place. Its smart predictions estimate when your invoices will be paid and factor in regularly late-paying customers.?
It helps you make informed decisions about when to save, spend, borrow and transfer money so you can feel empowered with knowledge for every business decision.
More?here.
Xero
Xero is a cloud-based accounting software that is available as a service (aaS). This means that the Xero business model is centred on assisting small and medium-sized enterprises (SMEs) in managing their finances through a variety of services aimed at analysing, integrating, and supporting their various financial processes.?Xero connects small businesses with trusted advisors and provides owners with real-time visibility into their financial position.
More?here.
MYOB
Businesses can track finances, manage payroll, and keep an eye on cash flow with the help of MYOB. Multi-currency, time billing, inventory management, and job tracking are all included in the robust accounting and business management software MYOB AccountRight helps businesses track finances, manage payroll, and keep an eye on cash flow.
More?here.
Reckon One
Reckon One is an online accounting software for small businesses. It includes features such as invoicing, payroll and cash flow management, which helps users manage finances easily.?
With an intuitive interface and a customizable dashboard, you can view financial performance in real-time.?
It is an ATO-approved and single-touch payroll-ready solution which helps you stay compliant and in control of your finances.
More?here.
4. How convergence will become a digital superpower
According to Matt Calkins, Founder and CEO of Appian, COVID-19 catalysed organisations around the globe to rapidly adapt to exogenous change.
While the pandemic provided the impetus for businesses to fast-track their digital transformation, Calkins believes that companies now need to combine convergence with agility to create successful digital outcomes.
Dynamic Business?spoke to Calkins when he recently visited Sydney for Appian’s 2022 Annual Conference for the Asia Pacific region, the first to be held in person in three years.?
The pandemic created a new landscape that businesses had to master and keep up with to survive. We asked Calkins about the challenges businesses faced during that time.
“They were forced to adapt to all sorts of changes,” explains Calkins.?“Not just customer buying patterns being different, but supply chains being different, employee work patterns being different, regulations being different, competitive situations being different, and government being involved in ways they hadn’t expected.
“So, speed of change became very important. And in the past, when businesses adapted to change, they made a new silo. And when you have more urgent problems, you just hit them with more individual solutions.?
“If we survived the pandemic as an organisation, we survived it by creating more silos, and we enhanced our ability to create them because we became more agile. It’s like the theme of the last few years. You have to be agile. And what agile has meant is as soon as you have a problem, hit it with a silo.”
The danger of silos
Calkins says that, unfortunately, this resulted in an accelerated sense of disunity across many enterprises.?
“Applications are not unified because they were made in haste to rescue us from a problem,” he says. “And data is even less unified because it tends to exist within the boundary of its own silo. And there was certainly no time to connect data from here to an application over there. We didn’t do much of that. Instead, we collected and utilised contained silos of data.
“I think we’re going to move naturally, evolve from a focus on agility, which is now table stakes. You simply must have agility. That’s digital transformation. We’re going to go beyond that. And now we need convergence.
“We need to behave intelligently and in a co-coordinated fashion across all of our technologies, applications, and data repositories, and we need to make them into one big brain instead of many little brains.”
Don’t blame the innovators
Calkins is quick to defend the IT departments that enabled business survival during the pandemic.
“IT should be recognised as heroic for how it helped the worldwide business survive the pandemic,” he says. “In fact, not enough has been written about this. I don’t understand why we haven’t all said IT should be at the top table. What they’ve done is so essential.
“Innovation always involves one misstep for every two proper steps. So, it isn’t the fault of innovative organisations that some things go wrong.
“I say all that partly to defend the innovators and say, ‘Hey, we really didn’t have a choice. They simply had to keep up.’”?
The power of a unified data model
Calkins backs companies that combine the convergence of technologies in low code and the convergence of data with what’s known as a data fabric to win the digital race. Data fabric is a relatively new term that means connecting data that exists in a dispersed fashion across your enterprise so that it can be treated as if it were local data, even though it is remote.
“So, you connect to your data fabric as if it is your local database, but it happens to reach out to all the other local databases and bring that data into your awareness so that you can tap into it, use it, even write to it from your local operation,” he says. “So, it’s a way, first of all, of admitting that data is not going to be in the same place anytime soon.
“It’s going to be dispersed, your data, but you’re going to have a unified data model. Dispersed data, unified model, and that unified model is going to make it so that your data appears remote and works like it’s remote even though it’s not remote to any given application.”
Calkins explains that a unified data model results in improved customer outcomes as well as productivity gains.
“Customer experience is about treating the customer the way a human would have treated them in the old days of a corner store. You greet them when they come in and provide what they want. And that’s the kind of experience people prefer; where the corporation seems intelligent instead of robotic, sympathetic instead of optimising.?
“To do that, we need to know something about the customer when we encounter them, or we are nothing but a machine. And so, the way you do that is to take the information from wherever you may have stored it pertinent to that customer and know it when you meet the customer.”
Transforming through innovation
Calkins is unashamedly enthusiastic about Australia’s vibrancy.?
When asked about the Australian market, he reflects, “It’s one of the fastest growing operations in the world for us. Our community has exploded over the past year. It’s up 422 per cent. Our ACV, which is at annualised contract value, is up by more than 150 per cent.”
He mentions two Australian companies that have partnered with Appian.
“We work with Pepper Money, and they’ll tell you pretty quickly if you can get a loan against an asset. You just enter some information, and a third of the time, they’ll tell you whether you can have a loan within a single minute.
“It’s all digital. And because they’ve automated their processes behind the scenes, you type a few things into the web, and while you’re still on the line, they can tell you.
“They’re doing that with our technology. So, that’s a cool example of somebody doing it right with digital transformation. Dealing with a lender is typically a frustrating and extended experience. Even worse the fact that you generally need the money. So, it’s great that they’re able to move at the speed that people would like to move.”
Australian internet and mobile service provider, Belong, is another Appian client. Calkins says Belong worked with Appian to track down fraud in their system, a project that saved the company a million dollars.
Leading Australian corporations, including Minter Ellison, AGL, Bendigo Bank, NBN and Westpac, shared how they use Appian’s unified low-code platform at the APJ 2022 conference.
Calkins says that Appian is a pioneer in this process automation market. “We were the first to go public in this market. We’ve been at it for five and a half years as a public firm, 23 years overall. We are committed to being the best, and what I mean by that is top customer outcomes.”?
What lies ahead
Calkins predicts tough times ahead for the global economy. While he says that Australia will experience some inflationary pressures, he is hopeful the country will fare better in the coming downturn than Europe or the United States, which he believes will experience a sharp recession.
Calkins identifies several issues Australian businesses should consider when implementing their digital strategy.
“Cost savings are especially important in a moment of economic turbulence. It’s going to be essential for businesses to spend the money they spend well. There will be a lot of focus on ROI.”
He predicts that over the next year, there will be some careful retrenchment around which programs are successful and which are not worth the investment.
“I don’t think you’ll see things thrown out because, ironically, it takes an investment to throw away a system. And in a recession, people are reluctant to make that investment. So, if even getting rid of an old system will save you money, it costs you first.”?
Calkins predicts that more conservative decision makers will dominate in the short term.?
“They’re going to be looking for proof that money will be saved, and they’ll be disinclined to do speculative things.”
Creating a corporate culture that encourages innovation is another consideration for forward-thinking leaders.?
“I think digital transformation is becoming so essential to an organisation that every organisation must do it. So, I ask, does this mean that some leaders are incapable of leading in the modern age? Are there some personality types that simply can’t cope with a world in which digital transformation is necessary? My guess is that if there are any, there won’t be any for long.?
“In a few years, things go from speculative and risky to simply necessary, and anyone who wants to run an organisation is just going to have to get their arms around it.”?
Calkins envisages significant changes to the digital landscape in the next five to 10 years.?
“I think technology like this will empower more regular people to be developers and collaborators with computers. So, this is an exciting trend for elevating people.”
“And more organisations will use technology like the data fabric and the unification of behaviour and information, so it responds in a more human way. Organisations will be more human, and humans will be more powerful.”
5. Managing your mental well-being as an Aussie business owner
Every business owner understands by now that mental health requires a marathon, not a sprint, especially in the aftermath of the COVID-19 pandemic.
Even though both business owners and employees have shown remarkable resilience, their mental health may suffer due to these adversities.
Working alone can be difficult to balance long workdays, manage cash flow, maintain personal relationships, and deal with isolation. Your health and well-being, as well as the well-being of those around you, are the most valuable assets of your company, so prioritising them will put you in a good position to focus on them.?
Even though the government predicted that worker pay would likely decline until 2024–2025, new research from LifeWorks today reveals that inflation is also having an adverse effect on Australians’ mental well-being, outpacing COVID and job loss. According to LifeWorks’ Mental Health Index, one in four Australians attribute the majority of their stress to inflation (26 per cent), followed by the COVID-19 pandemic’s persistence (13 per cent) and job loss (10 per cent). According to the research, more than half of Australians (53 per cent) believe stress is the primary cause of their declining mental health.
The Small Business Development Corporation (SBDC) compiled this list of resources with small business owners in mind to assist you.
NewAccess for Small Business Owners
NewAccess for Small Business Owners?is a confidential and free mental health coaching and support programme. Throughout the programme, you’ll collaborate with a coach to identify and discuss the challenges you’re facing and develop a personalised plan tailored to your specific needs. In addition, you will receive up to five follow-up sessions to work through your plan, learn practical skills, and assess your progress.
Visit the website?here.
My Business Health
My Business Health is a resource designed to provide small and family-owned business owners with tools, templates, and advice to help them manage stress and actively participate in the management of their operations. The website, developed by the Australian Small Business and Family Ombudsman (ASBFEO) and funded by Beyond Blue, contains detailed information on COVID-19 and cash flow, both of which can be stressful for business owners.
Visit the website?here.
Ahead for Business
Ahead for Business?has a range of free tools to help you take action when it comes to managing your health and well-being. It includes tools to help you assess your situation and create a well-being program for your business.
The Federally-funded Ahead for Business free Business Wellbeing online training aims to assist small business owners and their employees in developing their knowledge, skills and practices around mental health and well-being in the workplace. The training encourages users to reflect on and learn strategies to support their own mental health and well-being and support others in the workplace.
The training, expanded in October 2022, includes a training pathway tailored for small business employees, along with new content for small business owners, to support in creating a mentally healthy workplace. It consists of four short online modules that can be completed at times suited to small business owners and their employees.
Visit the website?here.
Beyond Blue small business support guide
When small business owners experience mental health challenges, their business support network members might be the first to notice. Beyond Blue’s ‘Supporting small business owners’ resource offers practical tips for close contacts helping a small business owner in distress. Beyond Blue has also launched a website dedicated to supporting anyone affected or concerned by the?pandemic.
R U OK? Day
The resources on the?R U OK? Day’s website?offers guidance on how to start a life-changing conversation and help build a more connected world – at work, home and in the community.
Free business advice from the SBDC
We provide a range of services to the small business sector, including?free business advice?and a dedicated?dispute resolution service. If you would like to talk to a business adviser about your situation, call us on?133 140?to speak to a member of our team.
Source:?SBDC
6. Australians consider this to be the best investment option amid economic uncertainty
Crashing cryptocurrency prices, volatile stock markets, declining real estate values, rising interest rates, and skyrocketing inflation have upended many financial portfolios and called into question traditional concepts of safe-haven investments.?
According to a recent poll by Send Money Australia, Australians now view superannuation and high-interest savings accounts to be the ideal places to put their money if interest rates and inflation continue to rise rapidly.
Here are the results of the poll:?
The majority of respondents (25 per cent) chose the high-interest savings account, which came in the first place. The outcome highlights the appeal of liquid financial assets and suggests that many Australians may be delaying making investment decisions in the current climate. This year, when interest rates increased, a number of institutions started luring savers in with high-yield accounts.
These banks include Macquarie Bank, Rabobank, AMP, Ubank, ANZ, and Commonwealth Bank. Macquarie Bank and Rabobank each give an introductory rate of 4 per cent, while AMP offers a rate of 3.6 per cent. With 22 per cent of respondents preferring this option, superannuation came in second place, probably due to the 15 per cent tax rate that this investment vehicle gives.
Is property investment a good idea?
Even though investment property is among Australia’s safest and highest-yielding investments, only 18 per cent of respondents said it was the greatest location to put their money. This year, housing prices have fallen at the highest rate since the global financial crisis of 2008, in stark contrast to the real estate boom of 2020–21. In September, property values declined by 1.1 per cent in Melbourne, 1.7 per cent in Brisbane, and 1.8 per cent in Sydney.
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With more time to see an unstable property market recover, a higher proportion (31 per cent) of younger respondents (18-34 years) were confident that putting money into investment property would provide the best return on investment. This compares with just 19 per cent of 35-54-year-olds and just 13 per cent of over-55s.
Should I invest in stocks now or wait?
The Australian stock market has had extremely volatile periods over the past two years, with total returns declining by 7.5 per cent in FY2022 after rising by 30.25 per cent in FY21. As a result, only 11 per cent of respondents thought investing in stocks was the best option. Overseas markets suffered even greater losses in FY22, with the Dow Jones losing 10.8 per cent and the Nasdaq losing 24 per cent, undermining investor trust in the safety of international assets.
Only 1.6 per cent of poll participants felt investing abroad was the best place to put their money.
Precious metals or Crypto?
Seven per cent of respondents said they thought gold, silver, and other precious metals offered the best investment return. Historically, while having a track record of stability, gold has seen marginal value growth compared to real estate and stocks.
Cryptocurrency continued to live up to its reputation for high-risk precariousness in 2022, shedding $1 trillion in value just in May and June of this year, while during the same time frame, well-known coins like Luna fell from highs of $116 to $0, wiping away $60 billion from the crypto market.
Australians have not yet forgotten this turbulent time; according to a survey, only 3 per cent of respondents think cryptocurrencies are the best investments. Despite the younger generation’s preference for cryptocurrencies.
The full results, with age and State breakdowns, can be found?here.
7. Harnessing the power of data can grow business revenue by up to 9.5%, research shows
Businesses in Australia and New Zealand that use data effectively can, on average, increase their annual revenue by 9.5%.
This translates to an additional $38 million in annual revenue for large organisations in Australia with more than 200 employees.
According to a new AWS report prepared by Deloitte Access Economics, organisations with more than 100 employees improved their data capabilities in the previous year, with 34 per cent achieving Advanced or Master levels of data maturity, compared to 16 per cent in 2021.?
Almost half of the organisations polled (48 per cent ) stated that effectively capturing and analysing data can lead to increased productivity, followed by improved customer experience (45 per cent ) and lower operating costs (42 per cent).
Finance and insurance companies scored the highest on the data maturity scale, with 50 per cent achieving Advanced or Master status, followed by manufacturing (45 per cent ) and information, media, and telecommunications (33 per cent ).
On the other hand, construction, healthcare and social assistance, and retail trade organisations have the lowest data maturity levels, with less than 20 per cent of surveyed organisations in these industries achieving Advanced or Master levels of data maturity.
Unusual challenges
While improving data maturity benefits businesses, large organisations in Australia and New Zealand continue to face challenges in climbing the data maturity ladder, with 42% of organisations achieving Basic and Beginner data maturity.
The main barrier cited by organisations to use data and analytics was a lack of funding (44 per cent ), which has been exacerbated by COVID-19, with 49 per cent of respondents reporting that competing priorities have resulted in fewer resources for data and analytics since the pandemic’s onset. Furthermore, 37 per cent of organisations cited poor data quality as a barrier to businesses adopting more advanced data analytics.
“We are excited to see that more organisations have advanced their data capabilities, which will help them to drive productivity, and create a positive impact on the economy while delivering significant financial returns for their business,” said John O’Mahony, partner at Deloitte Access Economics.
“Investing in cloud solutions will help businesses further their data capabilities and leverage advanced analytics tools such as artificial intelligence, machine learning, and the Internet of Things to achieve data-driven insights.
In fact, businesses that already use the cloud are 71 per cent more likely to have invested in artificial intelligence and machine learning capabilities versus organisations using on-premises data storage. To increase productivity and innovation, organisations should have a clear and practical roadmap for advancing on the data maturity ladder, invest in attracting and retaining talent, and leverage the right technology to reap the full benefits.”
?According to the report, one-third of Australian and New Zealand organisations (35 per cent ) cited a lack of skilled resources as a barrier to developing their data and analytics capabilities. To improve data maturity, 33 per cent of surveyed organisations prefer to upskill their current employees, followed by outsourcing to other organisations (24 per cent ), and hiring skilled staff (24 per cent ).
“Data can be an invaluable source of growth for organisations in Australia and New Zealand. The key is recognising its inherent value, analysing it effectively, and building a data-driven culture.
“No matter what stage organisations are in their data journey, AWS is committed to helping customers leverage the scalability, cost efficiency, and security of the cloud to scale their data projects and unify their data to drive productivity and innovate on behalf of their customers,” said Rada Stanic, chief technologist at AWS in Australia and New Zealand.
“Organisations will also benefit from building data skills within their teams, which may involve upskilling current staff through on-the-job training and training courses or collaborating with organisations such as our extensive network of AWS Partners.
“As organisations increase their data maturity, it will transform how they solve problems and build customer experiences, leading to breakthroughs in all industries, including healthcare, finance, retail trade, and manufacturing operations.”
8. Cash flow uncertainty among top stress factors for small business owners
Managing cash flow remains one of the most stressful parts of running a business in today’s challenging market conditions, according to Australian small business owners. It’s putting a strain on their personal relationships, affecting their physical wellbeing, and causing them to lose sleep.
New research by American Express has looked into the various factors contributing to rising stress levels among Australian business owners. Apart from cash flow woes, inflation, cost of living pressures, and customers not paying on time continue to plague small business.?
“Running a small business can be incredibly rewarding, but the day-to-day stress of paying suppliers and staff, and finding new opportunities to grow, can take a huge toll on mental health, especially when the unexpected happens,” explained Emily Roberts, Vice President and General Manager of Commercial Sales and Account Development, American Express.
Over 50 per cent of respondents said they rely on prompt payments, otherwise they struggle to pay their own bills and suppliers. 49 per cent said they even use personal funds to pay for outgoing expenses.?
A quarter of Australian business owners admitted not knowing where to start when it comes to managing their working capital cycle. Because of the stress arising from such situations, 17 per cent of business owners have considered ceasing operations.?
Alexi Boyd, CEO of the Council of Small Business Organisations Australia (COSBOA), notes that Australian business owner are “some of the most resilient people” in the country who are badly affected by current market conditions.
“Economic headwinds have created an environment where they are exhausted, mentally and financially,” Ms Boyd said.?
“One of the most underutilised and least understood aspects of running a resilient business is managing working capital. This latest research makes one thing clear: small business owners are acutely aware of the challenges they face and are calling out for support to take back control of their business today and into the future.
“There is such an important role for the wider business community and government to play in providing small businesses with the tools they need to excel.”?
Arising from this research, some of the advice for small business owners doing it tough includes seeking financial advice from experts, investing in cash flow tools that can assist with flexibility and breathing room, and if possible, taking a short break from the business to gain fresh perspective.
However, this is much easier said than done. For many small business owners, much of the stress arises from living and breathing the business every day. Leanne Faulkner, Founder of Fortitude at Work and small business mental health advocate, explains the importance of understanding these nuances.
“We know lots about creating a healthy workplace in large organisations, but it’s a mistake to think small business is simply a smaller version of a big company,” Ms Faulkner said.
“Through these findings, [small business owners] say we do not work in a bubble, we rely on others in our business ecosystem to help support our ability to work well every day. Any support from big businestses to help empower our daily operations and potentially relieve some working capital stress is welcome, so we can be at our best and focus on growth.”
For additional mental health support and small business resources, check out?Beyond Blue New Access For Small Business Owners,?Lifeline, or?Ahead For Business.
9. Brick and mortar stores have surged in popularity post-pandemic
When it comes to shopping for apparel, household goods, and personal care, it seems Australian shoppers increasingly prefer the in-store experience.?
The annual Retail Monitor survey from the Australian Consumer and Retail Studies (ACRS) unit at Monash Business School has found Australians are back to shopping at brick and mortar stores at pre-pandemic levels.?
However, they still rate the online shopping experience better.
“Prior to the pandemic, there was a clear divide amongst shoppers over physical versus online shopping experiences, with the majority of Australian shoppers preferring to use physical stores as their main channel for non-grocery retail purchases,” explained Dr Eloise Zoppos, Principal Research Consultant at the ACRS.
“During COVID-19, online became the main non-grocery retail channel out of necessity and the majority of Australian shoppers turned to online methods, a trend which was accelerated by the pandemic. We’re now seeing the return of a preference for physical stores and shoppers are moving between the offline and online worlds more seamlessly than ever before.”
For Australian shoppers, online shopping rates more favourably in terms of sales and promotions, product ranges, and product availability. They’re also less likely to return items bought online (42 per cent) compared to items bought in-store (66 per cent.)
The most returned product category has been clothing, footwear, and accessories. Dr Zoppos attributes this to high shopping expectations.?
“Research shows that the ability to see, touch and trial goods is the most influential factor of purchase decisions, and when it comes to tactile products such as apparel and household goods, factors such as size, fit and quality are paramount, but difficult to judge online,” she said.
The annual Retail Monitor survey also found that return options remain one of the most crucial factors when making a purchase for almost 60 per cent of respondents, only coming in behind price-related factors, quality, and customer service.
“With consumers using online channels more than ever before, it is now increasingly important that retailers provide shoppers with seamless returns experiences to meet their increasing expectations,” Dr Zoppos added.
“Rather than see returns as a problem, retailers should look at returns as an important stage of the customer journey; one that when done right, can result in customer loyalty, advocacy, and a cycle back to the purchasing stage of the customer retail journey.”?
10. Australia’s population is anticipated to grow by three million by 2030
Australia’s population is expected to grow by more than 10 per cent by 2030, adding another three million people to the country, according to property buyers agency BuyersBuyers.
Businesses react to their surroundings. Products are sold based on the strength of the customer’s needs rather than the company’s designs. As a result, it is critical for small businesses to adapt to changes in demographics and populations. Changes in population and migration impact the makeup of the workforce and the products available to the customers.
BuyersBuyers co-founder Peter Wargent noted that the Budget papers assume future net overseas migration of 235,000 per year with the permanent migration cap raised to 195,000 annually.
“Now, for the first time in a decade, we have full employment and a genuine skills shortage, and after a hiatus, we should expect a strong rebound in net overseas migration. And history suggests that we tend to underestimate population growth in Australia.
Mr Wargent added, “after a lengthy period of closed international borders, population growth hasn’t been much in the news of late. The Australian population clock ticked past 26 million, but we didn’t read too much about it in the media.
“It’s often overlooked that with Australia’s strong population pyramid and life expectancy generally increasing, the population grows naturally by around ? per cent per annum, with births comfortably exceeding deaths.”
Even after accounting for natural population growth, the Australian population is expected to grow by 365,000 per year, resulting in an additional 2.9 million people by the end of 2030.
In the absence of a deep recession, Australia can expect a strong rebound in population growth. At first glance, the drop in borrowing capacity since 2021 could imply a 20 to 30 per cent drop in housing prices. In reality, professional earnings are now rising rapidly in nominal terms, asking rents are increasing by 20 per cent per year, and stamp duty tax reform is on the table in New South Wales.?
The 30 million milestone
Furthermore, Australia’s population is expected to reach 30 million between 2029 and 2033, based on the most recent figures?released?by the Australian Bureau of Statistics (ABS).?
Population projections are based on current population trends and assumptions about future fertility, life expectancy, and migration. The ABS’s Director of Demography, Anthony Grubb, stated: “On current projections, the time it will take for the country to grow by 5 million people will be similar, if not slightly shorter, than the 14 years it took to grow from 20 million to 25 million.?
“Based on the medium of our three main projection assumption series, Australia could add another 10 million people to its current population. “However, under our higher range of fertility, mortality and migration assumptions, the population would reach 35 million 5 years earlier in 2038. Conversely, under lower assumptions, the population would only reach 35 million a decade later in 2053.”
11. Rules against unfair contract terms proposed to be tougher
Companies that violate consumer and competition laws may now be subject to new, more severe penalties, thanks to legislative changes approved by Parliament last week.?
Consumer-facing companies should review their standard form agreements and procedures for submitting or claiming to rely on them immediately.
The modifications come in two parts: the addition of fines and other modifications about unfair contract terms, as well as significant increases in the maximum fines for violations of specific provisions of the Competition and Consumer Act, including the Australian Consumer Law.
Penalties for unfair contract terms will take effect a year after the bill receives royal assent. The increased CCA penalties will go into effect the day after Royal Assent is granted.?The Treasury Laws Amendment Bill 2022 was approved by both Houses of Parliament on October 27, 2022. Violations committed after it goes into effect will face harsher penalties under the Competition and Consumer Act. The new maximum financial penalties for businesses are the greatest of the:
Previously, the maximum fine was $10 million, equal to either 10 per cent of the relevant annual turnover or three times the benefit. The top fine for a single offender will rise from $500,000 to $2.5 million.?These maximum punishments apply to a variety of offences and civil penalty provisions under the Australian Consumer Law, such as unconscionable behaviour, false or misleading representations, harassment and coercion, supplying products that don’t meet safety or information standards or that are subject to safety ban, and more.
They also apply to most civil and criminal offences under competition law, including cartel offences, the news media & digital platforms’ mandatory bargaining code provisions, the international liner cargo shipping provisions, and the prohibited conduct in the energy market provisions.
Additionally, more small business contracts will be covered by the modifications. Contracts with small businesses that employ fewer than 100 people or have an annual revenue of less than $10 million will be covered by the protections, regardless of the contract’s value. The amendments also clarify other legal provisions, such as the definition of “standard form contracts.”
Maximum penalties increased five-fold
The maximum penalties for companies that violate these provisions have been increased under the new laws to the greater of $50 million, three times the value derived from the violation, or, if the value derived from the violation cannot be determined, 30% of the company’s revenue during the time it engaged in the violation.
“The increase in penalties should serve as a strong deterrent message to companies that they must comply with their obligations to compete and not mislead or act unconscionably towards consumers,” ACCC Chair Gina Cass-Gottlieb said.
“These maximum penalty changes will allow the Courts to ensure that the penalties imposed for competition and consumer law breaches are not seen as a cost of doing business, but rather as a significant impost and something likely to raise the serious attention of owners or shareholders.”
The changes also include the introduction of penalties for businesses that include unfair contract terms in their standard form contracts with consumers and small businesses.
“We have long highlighted the adverse consequences of unfair contract terms on consumers and small business, including franchisees, and suggested that they be outlawed and penalties are required to provide a stronger incentive for businesses to comply,” Ms Cass-Gottlieb said.
Previously, the Courts could declare specific terms of a contract unfair and therefore void, but they were not prohibited, and the Court could not impose any penalties on businesses that included them in standard-form contracts.
“Businesses have 12 months to review and update their standard form contracts before these penalties apply. These changes will improve small business and consumer confidence that they will not be taken advantage of when entering into or renewing standard form contracts in the future,” Ms Cass-Gottlieb said.
“Many small business complaints about big business are about unfair contract terms, and it will be an enormous boost to small businesses that there will be a far stronger deterrent against using such terms.”
“Standard form contracts provide a cost-effective way for many businesses to contract with significant volumes of customers. However, these contracts are largely imposed on a ‘take it or leave it’ basis. The unfair contract terms laws are vital to protect consumers and small businesses against terms in these contracts that take advantage of this imbalance in bargaining power. We are pleased that these laws have been strengthened,” Ms Cass-Gottlieb said.
12. Record number of backpayments recovered by Fair Work Ombudsman in 2021-22
More than $532 million in back-paid wages and entitlements has been recovered by Australia’s workplace tribunal in the last financial year, three times higher than 2020-21 and more than quadruple that achieved in 2019-2020.
More than half of the Fair Work Ombudsman’s recoveries came from large corporate employers.?
“The Fair Work Ombudsman has created an environment that expects large corporates to prioritise compliance,” said Fair Work Ombudsman Sandra Parker.?“Combined with stronger, targeted compliance and enforcement action across all our work, the result has been another record amount of wages back in workers’ pockets.”
She added, “All employers must prioritise putting in place systems and getting the advice they need to ensure they are paying workers their lawful entitlements. Those who are doing the wrong thing, including large corporates, are being found out – and we don’t hesitate to take enforcement action where appropriate.”
Outlined in the FWO’s Annual Report, large corporate employers back-paid nearly $279 million to more than 267,000 employees, six times the amount returned in the previous financial year.?
Notably, almost $2 million was secured in concluded cases that involved exploited migrant workers. Often, they are “unaware of their workplace rights or can be reluctant to speak up,” the FWO noted.
The financial year 2021-22 also marked a record number of litigations for the FWO (137 new litigations) and the first time it has filed 100 litigations in a year. Employment matters involving two of Australia’s largest employers, Coles Supermarkets and the Commonwealth Bank of Australia (CBA), are currently before the Federal Court.
Ms Parker went on to outline the FWO’s plan for the next financial year.
“Our priorities for 2022-23, in addition to ongoing pandemic recovery support, are fast food, restaurants and cafés, large corporates, the university sector, agriculture, sham contracting and contract cleaning,” she elaborated.
For free advice and assistance on workplace rights and obligations, you can visit the Fair Work Ombudsman website?here or call the infoline on 13 13 94.
13. ASIC issues its first fine for greenwashing
Australia’s corporate regulator has issued its first fine for ‘greenwashing’, the practice of making unsubstantiated claims about sustainability or being environmentally friendly, against a listed energy company.
The Australian Securities and Investments Commission (ASIC) has fined Tlou Energy Limited a total of $53,280 over alleged misleading sustainability-related statements made in October last year.
As per its website, Tlou Energy develops “cleaner power solutions for Botswana through gas-fired power, solar power and hydrogen.” It is listed on the Australian Securities Exchange (ASX), London’s AIM market (AIM) and the Botswana Stock Exchange (BSE).
Four infringement notices were issued to Tlou by ASIC for claims that their gas-to-power project would be low emission; that they produce clean energy through renewable sources; that they had both approval and the capability to generate certain quantities of electricity from solar power; and that the electricity produced would be carbon neutral.
There were concerns that “Tlou either did not have a reasonable basis to make the representations, or that the representations were factually incorrect,” read the statement by ASIC.
The infringement notices were paid by Tlou on 25 October, though ASIC highlights that payment of such notices is not an admission of guilt or liability.
ASIC Deputy Chair Sarah Court added that greenwashing and sustainable finance remains a key priority for the corporate regulator.
“As entities promote sustainability and green practices as part of their value proposition, they must ensure they can support those statements and have a reasonable basis for doing so,” Ms Court said.
“ASIC is currently investigating a number of listed entities, super funds and managed funds in relation to their green credentials claims. Companies are on notice that ASIC is actively monitoring the market for potential greenwashing and will take enforcement action, including Court action, for serious breaches.”
The Australian Competition and Consumer Commission (ACCC) has also voiced its concerns about corporate greenwashing amid “growing concerns that some businesses are falsely promoting environmental or green credentials to capitalise on changing consumer preferences”, according to ACCC Deputy Chair Delia Rickard.
14. How small businesses can square up against the big guys in the staff poaching game
Covid-19 lockdowns pushed many to the brink, but the newest challenge of severe staff shortages and poaching has many at their most desperate point.?
From offering salary increases of upwards of $30k to creating roles with more money and less work, big organisations are leaving small business employees with the obvious decision to jump ship to a more cashed-up role at a time when the cost of living spikes.?
The impact of losing staff on a small business is much bigger than that of a large organisation – these businesses can lose lifeline revenue projects down to lack of staff or struggling to get new junior staff up-to-speed.
One small Australian business owner recently said that he feels as though, in the past, the big guys understood the importance of smaller businesses – but it now seemed that this had been lost somewhere down the line.?
Another said that one of their allied health team had gone from 10 staff members to three, and recruiting was near impossible – meaning her small business couldn’t grow, and the big guys were only getting bigger.
A survey conducted by Di Tapp from World Class Teams a few months ago posed the question to hundreds,?“How to retain & attract staff when you don’t have endless money?”.?
Surprisingly, the survey found only 12 per cent of people actually change jobs because of their salary, and there was a lot more at play than money alone.
We all know small business owners are some of the most resilient and adaptable people, and The CEO Institute of Australia’s top SME business owners have shared their best-kept secrets in retaining key staff when it feels impossible.?
Genuine care for your staff goes a long way
Everyone has a different purpose for getting up each morning and going to work. As a manager, understanding your staff’s why is everything.?
Find out their personal and professional ambitions and the reason they come to work in the first place. In order to retain staff, you have to look at them like a whole person – having a 1 to 1 relationship with them is fundamental and fosters honest discussions around their employment path.
People don’t want to leave a good job with great colleagues and a manager that knows and understands them.?
Naturally, reward and recognition are important, but managers who are proactive to staff needs as opposed to reactive retain their people. The narrative is important, and staff communication cannot be underestimated.
Tied to this is flexibility – staff members deal with their life hurdles and celebrations. One of your staff member’s partners could be sick, or another may want to watch their child’s first school graduation – if you appreciate and support this, people remember these things, and it links greatly to loyalty.?
In the above-mentioned survey, 70 per cent of respondents said flexibility was key to staying at a workplace, and 75 per cent said the main reason they left an organisation was down to a bad boss.
These are important things to remember. All staff are human, and you have to treat them as exactly that.?
Enough of the one-size-fits-all progression plans
One thing that small business does have over big business is the ability to have less rigid employment plans. They can offer multi-faceted roles with major development opportunities for staff well before they would be offered at a big organisation.?
Employment plans are individually-based, not a one-size-fits-all approach. Look at your staff’s strengths and weaknesses and tailor their employment journey to suit you both.?
Everyone must have a real sense of what their role is and the impact they have on the business. Both personal and team achievement is critical.
It’s very difficult to sway people from sizable increases in salary. The best bet is to get them in a position they wouldn’t get otherwise and strengthen the team and cultural environment.
When the going gets tough, go international?
Tech giant Atlassian recently announced a recruitment drive in hiring 1,000 R&D employees in Australia – posing a major threat to smaller tech companies that poaching or staff choosing to jump at the opportunity was imminent.?
During recruitment booms, large organisations can suck the skills and people from the smaller end of town who cannot compete with the salary packages of the big firms.??
To circumvent this, some tech companies have looked to overseas recruitment with offices set up accordingly. They manage teams overseas as they would locally and instil virtual work cultural norms to stay viable.?
In other cases, businesses are taking risks with skilled migrant workers looking for permanent residency in Australia. Both pay off with loyalty and flexibility in other ways.
These are great ways to give overseas workers a chance they may have never gotten while also landing a loyal and keen employee.?
Throw out Gen-Z bias and get that intern
A final tactic that small businesses are finding useful throughout this difficult patch is creating new internship pathways.
Business owners have never been keener to train people from the ground up, making graduate interns a hugely attractive option.?
From 3-month intern stints rolling into full-time employment, many find this pathway creates loyalty and long-term employees.?
With Australia’s unemployment rate particularly low, it fails to capture those university students almost ready to hit the job market and who, in previous years, may have been discriminated against for their lack of experience.?
Small business owners should make connections with their local TAFE or university and start graduate programmes to give keen local talent their first shot in the job market and get an extra bunch of hands on deck for their business.
Final thoughts
These tips can take small business owners’ a long way, but in some cases, you will still lose that staff member to the big organisations and really feel it.?
The key to ensuring you don’t lose any more winks is acceptance.
As one of our members once said: ‘It’s like a smaller football club that knows it ain’t going to retain quality players – the biggies will come and snatch.?
‘Accept it, plan for it and use all the tricks at your disposal to ensure you have a business that is not centric to running foul when people leave.
‘If you see it as a positive, you can attract the right staff early on and impress upon them that you are a gateway for their career progression.