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Small Business

Federal government downgrades small business focus

The cabinet reshuffle announced by Prime Minister Turnbull today downgraded Small Business focus out of cabinet as reported in The Age today:

Kelly O’Dwyer, the assistant treasurer before the reshuffle, will be renamed the minister for revenue and financial services. She has been axed as small business minister, with that portfolio now downgraded out of cabinet and handed to Nationals MP Michael McCormack.

This is not a good look for the government given their statements about small business leading up to the election.

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Small Business

State and federal politicians should be required to undertake a week of genuine paid work experience in a small business every year

I first wrote here in 2013 that State and federal politicians should be required to undertake a week of genuine paid work experience in a small business every year. I believe it today more than ever. Indeed, right now in Australia, during this small business focussed election campaign, this idea ought to be out to every politician from all parties. They visit small businesses, have their photo taken, shake some hands and move on to the next photo op. Each visit is stage managed to show them engaged with small business.

Politicians who really want to engage with small business will seriously consider my proposal. Sadly, that means none will, from any side will. here is my proposal from three years ago:

Despite small businesses employing more Australians than any other business block we receive less attention from our politicians. This is in part our own fault driven by disconnected representation and a lack of unity on issues.

One way to redress the disconnect between small business and politicians would be to require every politician, federal and state, to spend a week a year working in a  small business in their electorate – paid real work.

The business should be chosen by random ballot – to remove the opportunity for mates looking after mates.

Besides the practical work experience, the politicians would gain a better understanding of the life and challenges of everyday Australians.

I am confident that after a couple of years we would see this small business work experience program drive a more practical narrative from politicians of all sides- and not just a small business focused narrative but one also more connected with real life.

We can’t compete with the lobbyists who are paid a fortune to guide our politicians to outcomes they want. Hence my call for a legislated week of small business work every year for every politician.

Imagine what discussions about paid parental leave, GST changes, assistance for the car industry or workplace relations changes would be like in the cabinet room if everyone at the table had done a week of real work in a small business beforehand. They would have reference points relevant not only to our small businesses but also to our employee colleagues, their constituents.

Thinking about this further today, I am confident enforcing a week a year working in a small business in their electorate chosen at random would result in better government not only for small business owners but for all these small businesses serve for it would add to the experiences of the politicians and change their conversations.

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Newsagency management

Telstra outage hurting small business retail including newsagents

Newsagents across Australia have been hit again by faults with the Telstra network. Retailers are affected where they run the business through a server located outside the business. They are also affected when EFTPOS terminals do not have phone line access.

I know of one business that had no EFTPOS for five days. They spent countless hours on the phone to Telstra only to receive different advice each time, none of it satisfactory.

The experience is a reminder of the importance of having appropriate contingencies in place so the business can continue to trade should the primary network be down.

Telstra ought to be on the front foot regarding compensation. Free data is not the answer here as many small business retailers I have spoken with have lost money through the register, money many will not get back unless Telstra pays compensation.

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Ethics

Mark Latham doesn’t get it: size doesn’t matter to small business owners

Mark Latham loves to goad people into debate. This is what Fairfax pays him for from his op-ed pieces in the Australian Financial Review.

Latham was wrong in his column on the weekend when he wrote:

Self-evidently, if small businesses were any good they would’t be small. They would be big monstrous things with massive levels of profit, employment and economic grunt.

A good business owner, large or small, spreads risk. The best way to do this is across many revenue points (customers or products). Businesses relying on one big revenue generator carry a huge risk as do economies – look at the doom and gloom forecasts for Australia flowing from the mining downturn.

Our economy will be stronger from 10,000 small businesses with combined revenue equal to one large national business.

While I am no economist, I suspect and economy will benefit more from many small businesses than one big business generating the same revenue. Here’s why:

  1. Small businesses have been essential to cost-effectively delivering the newspaper in which Latham writes since it was first published.
  2. Small businesses are less likely to shift revenue off shore.
  3. Small businesses are more likely to pay their full tax obligation. No double Irish with a Dutch sandwich here.
  4. Small businesses have fewer tax concessions.
  5. Small businesses are safer economically in that one can collapse and the community is okay. A big business in town collapsing can cause real hardship.
  6. Small business owners are less greedy than large business CEOs and senior management.
  7. Small businesses boost personal and economic optimism.
  8. Small business start ups are vital for economic activity.
  9. Small businesses employ fewer lobbyists and therefore get less time with politicians.
  10. Small businesses more actively support local communities as they are local.
  11. Small businesses are more likely to source products locally.
  12. Small businesses do more to spread local narratives.

Latham goads further with:

Small businesses, in effect, are the garden gnomes of the modern economy – purely ornamental and totally dispensable.

I don’t think Mark Latham actually believes this. If he does he is an ignorant small business bigot, he ought to work in some small businesses and see the world from here. He should see first hand local community engagement that is unique to small business. he ought to spend time in the office and see first-hand the economic value from wages paid, suppliers paid, rent paid, profits made. Sure, most small businesses make only slim profits – but does that matter? I know many small business owners who are not in business to get financially rich – their businesses make them personally rich.

I’ve owned my software company for 34 years and my retail newsagency business for 19 years. Both businesses have been and continue to be considerably more than ornamental for me, all who have worked in them and all who have done business with them.

The best business success in large and small businesses is that which comes from many small steps as it is this success which will be more sustainable. The same is true for an economy. Australia will benefit from more small businesses not fewer. They do not need massive handouts, only the occasional reaffirming encouragement like the instant asset write off in the latest federal budget.

While I appreciate Fairfax runs Latham’s pieces to encourage debate, in this piece on small business he offended a business community that is vital to Australia.

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Ethics

Worth revisiting the Greens small business policy

Prior to the last federal election I commented about the small business policy of the Greens compared to the major parties. I felt the policy of the Greens was better. I still do.

I reconsidered this recently following the federal budget small business initiatives. It is interesting to see what the Greens proposed and what the government has subsequently announced.

For all their attacking of the Greens, the federal government has borrowed heavily from the policy work done by the Greens. I would have like to see the government acknowledge this.

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Small Business

Ignorant commentators come out against the small business instant asset write off in the 2015 federal budget

I write this as the owner of an Australian software company serving several specialist retail channels, as a newsagent and as the owner os a couple of other businesses serving small businesses in Australia.

I am disappointed at some of the commentary about the instant asset write off announced in the federal budget this week. I have heard media commentators call it a tax break, a gift, a hand out, a return to the age of entitlement and a more. I have also heard commentators question whether small business owners will do the right thing and spend the money honestly.

These comments are ignorant, they do not reflect the thinking of small business owners. Small business owners are a passionate breed, usually putting the needs of our businesses ahead of much else in our lives. We don’t engage in tax schemes to avoid paying Australian taxes, we don’t domicile in tax havens to avoid tax, we don’t use visa programs to import workers ahead of Australians.

Most small business owners are too busy in their businesses to even dream of the schemes we read others use.

Small business owners work long hours, usually for below award rate wages – because they love the independence of working for themselves and, yes, the feeling of making a genuine contribution. I happily work a minimum of 80 hour s a week and have done for decades.

Let’s look at what the instant asset write off actually is. Check out this from the federal government’s budget website:

ACCELERATED DEPRECIATION
All small businesses will get an immediate tax deduction for any individual assets they buy costing less than $20,000. (Currently, the threshold sits at $1,000).

This $20,000 limit applies to each individual item. Small businesses can apply this $20,000 rule to as many individual items as they wish. These arrangements start from Budget night and continue until the end of June 2017.

There is no extra money, no grant or gift. All that is being done is speeding up the writing off of the expense. The budget measure improves cash flow.

A small business owner wanting to buy a new TV, to take one comment I heard several times, will still have to fund the TV – meaning they will want a business purpose for the TV.

I own a few businesses and while none is eligible for the instant asset write off, they serve small businesses which will be eligible for the instant asset write off.

Based on comments from small business owners to me since the budget, I am confident the instant asset write off is a valuable step needed to get many small business owners thinking about their businesses, considering what investments they could make knowing they get a deduction in the year of purchase and not spread over time.

Yes, I am conflicted as I stand to benefit. I mention this in case it has not been clear up to now. The economy benefits too. Take my POS software company:

  1. More small business owners like newsagents will purchase our newsagency software.
  2. Used how we train them, the newsagency software will help the businesses cut costs, increase sales, reduce theft and make better quality business decisions. In short, their businesses will be worth more. I have seen newsagents do this and hire more staff. Others have paid off loans sooner – making more funds available to banks for more lending.
  3. My software company benefits from more revenue and more customers. More customers = more staff. We benefit, the new staff benefit and the economy benefits.
  4. The software we sell is Australian. Any support for this is good for the country.
  5. The tax we pay is higher as a percentage of sales than the big companies in the news recently. Boos us and you boost the economy. You boost us by supporting our customers. You support our customers by encouraging them to invest in their businesses.

To the commentators making noise about a possible surge in TV and car sales, take a moment to think that there are ethical Aussie companies with productivity tools servicing small Aussie businesses – and that together we can deliver measurable economic benefits.

Stop talking us down.

Now, to my politics. I voted Greens at the last election as I thought their small business policy was better than the major parties. I have not voted Liberal for many elections. While this is none of your business, I felt it important to say to show I am not writing this as an ideologue.

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Ethics

Available at all good newsagents…

Screen Shot 2015-02-28 at 12.10.42 pmIt frustrates me when I see a magazine publisher promote that their latest magazine is available at all good newsagents. They control where their magazine goes – or their representative distribution company does.

My message to suppliers: don’t shift judgement of which are good newsagencies and which are not on the basis of where you choose to place your title.

Okay, I accept they are using a cliche without thought. Shame on them and for the judgement they impose in our small business channel.

I caught up with this tweet from the Australian Grand Prix Corporation and responded to them just now:  FFS! you choose which newsagents get the magazine so you decide which ones are good? Your words could use some work.

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Ethics

Sunday newsagency management tip: fail well

It’s natural to fear failure in personal and business life. Online and offline gossip about friends, colleagues, competitors and others is often about failure, intensifying our own fear of failure. Today, news of failure is amplified more than ever because of the ready access to the megaphones of social media.

My uneducated theory is that volume of gossip and talk by some about the failure of others reflects more about them than those of whom they speak. But that’s not what I want to write about this morning.

We need to embrace failure. Indeed, if we are to fail, we need to fail well.

By failing well, I mean we need to leverage value from the failure. This could be getting it right the next time, helping others from our experience, having fun with the failure or in some other practical and life lesson type way.

Every failure, large and small, presents the opportunity to fail well. Whether we do fail well is up to us. It is up what we do as a result of the failure. We can choose to fail or fail well. My management advice today is for us to fail well. This starts with us owning the failure. Next we have to think about how to leverage it. Finally, we need to talk about the experience with others, to share positives from the experience.

It could be that you have a dud product that you have brought into the business. Call it out. Have fun with it on the shop floor. I now of situations where this has been done in a fun way and the dud product has become a success. Think of some dreadful movie failures that have become cult classics and commercial successes.

If the failure is on a bigger scale, like a whole of business failure, own it, walk through it, learn from it and confront every challenge head on. The best advice I can give is to look ahead and take a small step at a time … oh, and don’t listen to those talking about you.

Running and hiding from failure denies you the opportunity to grow and others the opportunity to learn from your experience.

As for those who enjoy talking about the failure of others, ignore them for they live in a sad world.

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Ethics

The smoke and mirrors of Victorian Government’s Small Business Day

smallbusdayvicThis Saturday, October 4, is Small Business Day in Victoria. Yipee – I can hear you cheering from here. We Victorians are being hounded with TV ads telling us to shop in and support small businesses.

I am sure there are some in the current government who will point to this as support for small business. Such a claim would be disappointing and not the full story.

The best way any government helps any constituency is through policy as reflected in actions of the state legislature through to the actions of government departments as directed by their ministers.

The current Victorian government, like its predecessor, has presided over a period of almost no useful support for small business.

Take Myki, the public transport ticketing system. The current and last government saw small businesses sidelined in the sale of Myki tickets. Whereas previously newsagents were the key retail outlets offering these tickets for low but reasonable margin, since the launch of Myki 7-Eleven is the prime partner. This is small business policy in action.

Next time a Victorian politician claims they support small business, ask them how in legislation and department actions, ask them for evidence. I struggle to think of any.

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Newsagency challenges

Health checks from Woolworths?

The announcement today that Woolworths intends to offer free heath checks is another example of why we need legislation to stop the growth of the supermarket duopoly in Australia. Indeed, politicians need to legislate to force a reduction of their market share.

Bob Katter was on TV tonight listing the businesses closed brown by the supermarkets. He included newsagents in his list. While I Tweeted Bob () to say we’re not dead yet, newsagents and every other small business owner in Australia needs to lobby their local politicians to call for legislation reining in Coles and Woolworths.

Enough is enough. We have to fight for our businesses, our families, our employees and ur communities.

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Ethics

Sell locally-sourced products and prove your pitch to the local community

theatre showIf we are to promote a shop local pitch to our local communities we need to source locally made and locally connected products. This week I will draw attention to several local suppliers newsagents could consider. Stocking products from these and similarly local suppliers adds credibility to our shop local pitch. To me, local products are products made and / or designed in Australia. If my newsagency was in a country area my focus would be more on products sourced even closer to home.

Just Kiddin is a Melbourne based company run by a talented designer who sells her own designs in the form of tents and other products for kids. Their tents are terrific: easy to display (hang them from the ceiling), well packaged and of high quality. While major retailers have cheaper products, the Just Kiddin tents are seen by shoppers as far superior. In one of my newsagencies we have sold more than 60 tents in the last year – that’s close to $6,000 worth. They are a good fit with newsagents who sell toys, cards for kids and kids magazines – yep, just about anyone.

I first found the products at the Home and Giving Fair in Melbourne. The business owner and product designer was on the stand offering excellent insights into the products.

Just Kiddin has been a newsXpress preferred supplier for quite some time. They will sell to others.

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Ethics

Great to see a small business fight the supermarket duopoly

10502467_810489645635731_8037353110881261883_nCheck out the photo of a sign in front of a local butcher a friend posted on Facebook yesterday. I love the direct and feisty words of this butcher who is making a plea for locals to support their small business and not the big supermarket.

With tougher competition from the supermarket dopily newsagents could engage in a campaign like this – educating shoppers about how Coles and Woolworths are taking business from us and highlighting what shoppers could miss if they ultimately win and see more small business newsagents and other local businesses closed.

We can’t stand by and do nothing. Like this butcher, we need to educate our customers with passion.

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Newsagency challenges

Newsagency management tip: What’s your song?

What’s the song you play when things really get to you and you’re just about ready to give up? You know, the song that takes you to a better place – maybe some nostalgic or somewhere you dream to be. The song that helps you process, deal with and or forget what appears to be a road block in front of you. The song that helps you creatively. The song that makes you smile.

In theatre they often have a song for the production that blares through the empty theatre prior to opening the doors to the public. I have seen it used is to ‘cleanse’ the theatre, reset the cast and backstage crew and focus everyone on the production.

This song of yours can help in business – if you’re not using it already. Use it to inspire you and to help you look at challenges differently.

I was talking with someone about this recently and they said they didn’t have a song. They actually did and didn’t realise that it was the song.

I have a few songs including: Orinoco Flow from Enya and Hungry Town from Big Pig’s Bonk album to help with creativity; Dirty Boulevard from Lou Reed, Things Can Only Get better from D:Ream and Eve of Destruction by Barry McGuire when working on business plans.

I have the songs I really like on my phone, laptop and iPad. If I need to shut out the world they are nearby for comfort and inspiration. If I don’t answer your call it could be because I have the ear plugs in.

What are your songs?

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Management tip

Minister for Small Business speaks up on business funding

The federal minister for Small Business Bruce Billson on Thursday spoke at a G20 meeting on the need for easier access to funding for small business. Click here for the SBS report. Here’s what the Franchise Council of Australia reports the minister as saying:

“This inability to obtain start-up finance is a strong disincentive to those looking to start a business,” he said.

Minister Billson went on to question the practice of lenders often requiring the family home as collateral for business loans.

“ The Government wants this to change. A lending environment where families do not have to put their home on the line to obtain finance would lead to more entrepreneurship in Australia,” Billson said.

Small business owners will be pleased to hear these comments from a government minister and will hope that they are quickly followed with action. For decades we have had successive small business ministers speak up about our constituency. Rarely have their words been followed with action.

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Small Business

Small Business stories aren’t sexy or emotional enough to make the front page

Even in their demise big business trumps small business when it comes to the news. I guess it gains more clicks and sells more newspapers to report on 1,000+ job losses at a big business than job losses of 1,000+ at 300 or so small businesses.

While the news in Australia is currently dominated with reports of the planned closure of various car plants and, now, the closure of the Alcoa plant, these are just part of the story of the economic restructuring occurring within Australia.

In several small business sectors we are seeing restructuring resulting in business closures and layoffs.

But let’s not dwell on the doom and gloom. In small business sectors we are seeing new business start and existing businesses expand. Even in the newsagency channel I am seeing new businesses open as well as existing newsagency businesses alter direction of their model in pursuit of new opportunities.

Yet media outlets are not chasing these turnaround stories, especially small business success stories. It is as of only bad news sells clicks and newspaper purchases. This is frustrating because there is plenty of good news in small business circles and in newsagency circles. Reporting these stories could show others opportunities they are missing today.

In the newsagency channel, one of the most compelling stories is newsagents who are transitioning their businesses from the average gross profit model of 28% to 32% to a model of 40%+. This is hard work. The results are exciting. It’s a story to report – the reinvention of the quintessential small business in Australia.

What makes the unreported small business success stories better is that most are achieved without the government handouts that successive federal governments have given to big businesses for decades.

The media and politician obsession with big business is frustrating.

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Small Business
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