Liberal leader Tony Abbott picked up a Geelong Advertiser at Highton Newsagency and then Tweeted about it. Welcome to another election stunt designed to promote a local candidate and show a small business connection.
As I found out when John Howard visited my Forest Hill newsagency in the 1998 election campaign, they want the photo in a small business but ignore you once they are in office.
The newsagency channel faces disruption of a similar scale to the TV networks yet we’re not getting hundreds of millions of dollars to help us navigate this. The Australian newsagency channel faces similar competition to the car industry in some respects yet we’re not getting hundreds of millions of dollars of handouts.
No, I’m not actually asking for handouts. Rather, I am suggesting that instead of opportunistic photos, politicians should meaningfully engage with newsagents and other small business people.
Can I change the subject to a subject that we will all face one day and that is the “selling of our newsagency”
At present I have my newsagency on the market after 21 years being a tenant of a “neighbourhood centre. Got a sale contract ;last week only to have it fall over within two days as the purchaser got frightenmed by his advisors.
Broker last week told me that 6 newsagencies in S/E Qld closed last week… I think/hope he meant last month or even more hopeful “in recent times” he talks about shopping centre agents closing their doors as well as the small strip shops we all know that!.
Also he says that the multiple is now a max of2 times with many only receiving a multiple of 1.
Any thouights or expereinces in this regard seeing that I purchased this business many years on a multiple of 3.25?
Thanks
Michael Caffery
Albany Creek News Brisbane.
Hi Michael,
i understand that businesses generally are selling for 1-2 years earnings at the moment.
I am not sure about retail newsagents, but distribution newsagents are selling for 6 months earnings if they are lucky. A few years ago it was 3 years earnings.
Michael I believe that goodwill these days is only what a buyer is prepared to pay for your business, no more formulas, just what the buyer is willing to pay.
People aren’t lining up to buy newsagencies like they were over 20 years ago.
We’ve chosen to keep ours after a couple of years on the market as we believe it is more valuable to us to stay than to sell.
Met John Howard and Ken Wyatt (WA) today. They were more than happy to talk, although the crowd became too big and customers were trying to get served.
Michael, the days of a multiple of 3.25 are long gone as are the days of selling based on a profit loaded with dubious add-backs.
The most common multiple I am seeing in newsagencies and other independent small retail businesses is 2 times genuine net profit.
This makes it more important than ever to drive net profit.
On the issue of advisors / accountants / bankers – they are a blight as they are talking the channel down out of ignorance. There are newsagencies that are growing. These are businesses being run by retailers focused on GP and Net Profit.
surely there are a whole heap of other factors as well eg shop fits ,lotto fits etc . i am always looking at newsagents for sale on the net and there are a whole heap out there needing shop fits ,some have not been touched for 20 odd years .
Sick of handouts to get votes! Small business employs many more people than a car manufacturer or a television network. However just like the newsagency shingle, small business is not sexy, it’s fragmented, and it doesn’t make for a great news grab.
Just cut red tape, reduce compliance costs and stop putting up wages. & we’ll employ more people, we’ll pay more taxes and we’ll drive this economy!
Easier said than done Ben. Small business is fragmented and each one wants different things. The failure of the “Too Big to Ignore” campaign is a reflection of this reality.
What red tape? There is red tape everywhere, some of it is efficient and purposeful – some of it is not. Identifying what is good and what is bad red tape is the problem. Small business will never agree on this.
Wages won’t stop going up. Our high wages, in part, give Australians some of the highest living standards in the world. It’s part of the economic fabric of Australia that business simply has to deal with.
In fairness to the automotive sector, car manufacturers are highly likely to pull out of Australia without handouts. The trickle down effect from that is substantial. I’m not saying that handouts to the car industry are the best way of keeping those people in work. There are other avenues that could be taken but all of them will involve spending significant amounts of money. It’s how efficient that spending is and what outcomes it produces that are important.
From a macro economic and employment POV small business is possibly the most important force in our economy. It’s role in the economy and the challenges it faces are not something that can be addressed during an election. Small business policy isn’t pretty and can’t be packaged into sound bites for the electorate.
The kind of changes that will help small business, but at the same time not disproportionately disadvantage other groups, are unlikely to come in the form of major reform. A more realistic and arguable better outcome will stem from small and medium changes to the systems in which small business operates, properly constructed by experts, and not moulded be the politics of elections. This is what small business should be aiming for – long lasting, less politicised involvement in the governmental processes of the country.
Small Business does not donate to Political Parties, Big Business does. He who pays the piper calls the tune.