Our Founders and Directors, Ian Macpherson and Craig Ball discuss what the small business landscape looks like currently & what options are available from the government.
CRAIG: IAN 2020 HAS BEEN A VERY TESTING TIME FOR ALL INDUSTRIES SO FAR WITH COVID19 - WHAT ARE THE STATISTICS TELLING US ABOUT SMALL BUSINESS?
IAN: Yes Craig, it has been an exceptional year so far and as we have touched on in previous webinars, we are seeing some extraordinary responses in the sector. I think if you look at small business in this country as a contributor to the economy you see some interesting numbers.
I was watching a presentation from Prospa last week and they quoted government figures suggesting there are over 2.4m businesses in Australia and over 90% of them are SME's.
They employ nearly 45% of Australia's private sector workforce.
The Eastern seaboard alone accounts for 1.75m businesses.
Any wonder the government stimulus is so targeted at this sector.
But if you look for a moment at the Australian Bureau of statistics "business Impacts of Covid-19 Survey and this is dated July 2020 -
- 47% of all businesses including large corporations - reported that revenue had decreased in the previous month
- For the next month 27% expected revenue to decrease - further
- Whereas 49% expected it to stay the same.
- 80% of businesses reported no change in the number of employees in the previous month
- 85% expected no change next month
Whilst this month to month data - unexpectedly - does not show any significant changes - the people surveyed also stated minor changes - however there are SIGNIFICANT changes year-on-year.
Multiple businesses reported that their operating expenses had increased due to requirements around cleaning and hygiene - PPE and hand sanitising. However, in contrast some businesses that indicated increased working from home arrangements reported decreased operating costs.
Many businesses commented that their expected revenue and operating expenses were heavily dependent on whether government regulations would be changing again or staying the same, specifically those regarding social distancing and travel.
AND JUST SOME BULLETS FROM ABS
- When support measures are no longer available 10% expect to close
- 54% received government support via the Boosting Cash Flow for Employers measure
- 11% of employing businesses reported difficulties in finding staff
CRAIG: YOU MENTIONED 10% OF BUSINESSES ARE LIKELY GOING TO CLOSE AFTER THE SUPPORT MEASURES ARE NO LONGER AVAILABLE, WHAT FINANICIAL ASSISTANCE HAS BEEN PUT IN PLACE TO SUPPORT SME'S
IAN: Before we get into this - just a reminder this presentation is not financial or tax advice, you need to consult your specialists in these areas to see if any of it applies or is of benefit to your clients or business.
Let’s start with the most obvious.
So much of the response to Covid-19 - quite rightly - has come from the federal government. In times like this we know that an economy so heavily dependent on the small business sector will simply not survive with lock downs, shut borders, social distancing forcing the majority of Businesses to either do a swift pivot or shut their doors.
Some interesting Pivots if I may use that term have already been seen. A good example is the boutique distillers converting their waste product into Hand Sanitiser. Smart thinking and meeting the market one could say.
The federal government stimulus packages are designed to support families and businesses impacted by the downturn.
- Homebuilder - $25,000 to build a new home / or substantially renovate a house / including first homeowners
- Jobkeeper - if you haven't heard of this you must be living in a cave. Revenue drops 30 % or more year on year and you can claim $3,000 per employee or small business owner. Jobkeeper extension the government announced the extension of this on July 21 out to 28 march 2021.
- Individuals and households - eligible seniors / pensioners / carers student payments everyone gets $750
- Businesses and employers - range of activities covered here including jobkeeper, cash flow to pay bills, apprentices and trainees, safety net and so on
- Flow of Credit - DIRECTLY SUPPORTING SME'S
Watch the full video of Ian and Craig discussing SME's
With 30 years of global expertise across several financial market disciplines in Sydney, London & Tokyo, Ian brings a unique mix of industry experience and competency to scale business by driving employee engagement and securing client advocacy.
“The values I respect and demonstrate in my business life are Integrity, Honesty and keeping an open mind to learn new things. Respect for the people you are dealing with.”
Our MC and Host is CRAIG BALL
After working with large teams for many years, Craig decided that he ‘no longer wanted to conquer the world’. Said in jest obviously, he now wants to keep things simple, concentrating on helping his clients with their needs & continuing to provide valuable education & assistance to the financial services industry on Estate Planning.
He also wants to connect his financial services colleagues and provide them with a third option over "Get a degree or get out."
We provide an opportunity for those Advisers who are sick & tired of all of the crap & simply want to help their clients;
But more importantly, we are people who care who simply want to work with other people who also care.