The Summit on the Global Financial Crisis was hosted by the Council of Small Business and the Chamber of Commerce, with Prime Minister Kevin Rudd and other Federal Ministers in attendance.
Prime Minister Rudd told us that there are two million small businesses in Australia and they employ four million people and contribute to one third of our nation’s gross domestic product.
Mathematics tell us that the average number of people working in a small business is two. However we were told that a business of that size, an average sized small business, was in fact a micro business. The average sized small business was not referred to as a small business at all – instead it was referred to as a MICRO business.
The small business arena has changed and evolved and there are many very successful home based and small businesses who appear to fall under the radar of the “Small Business Leaders”.
Prime Minister Rudd said that his Government was committed to paying invoices up to $1M within 30 days, and after that you are welcome to charge interest on them. He went on to tell us they would standardise the procurement documents and encouraged businesses to sign up to their tendering websites and for Queensland businesses https://tenders.nsw.gov.au/queensland/.
While neither of them has provided my micro business with an opportunity that I have capacity to serve, I read them with interest, and they provide focus and direction for growing my business.
Prime Minister Rudd went on to tell us about a $4M cash injection into existing Business Enterprise Centres. Unfortunately, there are none of these centres in Brisbane.
The summit turned its attention to banks, and some of the bank managers gave polished speeches about issues relating to business credit. As far as credit goes, many of my clients who are defined as micro business are in a similar situation as I; they have very restricted credit, mainly in the form of a credit card and no plans to take loans out.
Prime Minister Rudd made one comment that I have to disagree with. He suggested (I am not quoting him verbatim) that the micro businesses of today are the small businesses of tomorrow and the large business of our future.
I disagree with this.
Yes of course some entrepreneurs have dreams of a large business. But many solo and micro businesses are extremely happy in the niche they have carved for themselves, as demonstrated by the many followers of the Flying Solo community.
Lack of growth should not be seen as a failure. Solo or micro business does not translate to small profits, it translates to less hassles, less politics, more flexibility and better work/life balance. Also, small businesses tend to be greener, use less fuel, less infrastructure plus they utilise virtual services.
The question and answers session provided for some interesting comments. Someone complained about fines on late payment for GST. Minister Craig Emerson told the audience about BAS Easy, a policy that I as a Chartered Accountant am completely opposed too. Relying on BAS Easy will send your financial reports and your ability to financially manage your business spiralling out of control.
My comment to the micro business owner complaining about GST late fees is the GST was never yours in the first place. Using suitable accounting software and skilled staff, preparation of the BAS should literally take two minutes. Every other task that you undertake, that you may label as BAS preparation, you should and you need to be doing on a regular basis anyway. If you are paying your GST late it suggests that you may be using the cash flow from GST to finance your business. This is not a good habit to get into. Though I should add you are encouraged to talk to the Tax Office if you are having problems.
As a micro business owner, I am concerned that the global credit crisis will mean people will take longer to pay outstanding invoices and they may result in bad debts. Though I do see opportunities coming out of this crisis, I am marketing the cost effectiveness of job specific training to help businesses retain staff and increase profits.
What would you like to see the Government do for your micro business?
“ Solo or micro business does not translate to small profits, it translates to less hassles, less politics, more flexibility and better work/life balance. ”
Heather Smith an MYOB Certified Consultant and Specialist Trainer, provides business management software solutions which generate accurate and timely financial information that the business owner can use and understand.