The small business and family enterprise landscape Dr Craig Latham Deputy Commissioner IPA Victoria Congress 3 March 2016 RACV Resort, Torquay
Small Business Commissioners • Only in Australia (soon in UK) • Started in Victoria in 2003 • Distinct characteristics – Access to information and education – Advocate to Government on behalf of small business – Investigation of complaints and behaviour – Facilitating resolution of disputes Influencing behaviours • Poor contracting practices and management skills o ASIO building report • Government as a Model Business o All Government agencies act as a business at various times. It is reasonable to expect that they should set the standard for others to follow • Commonwealth Contracting Suite: Simplified procurement contracts o Colour-coding to clearly highlight the rights and obligations of each party • Dispute Support o Easy step-by-step low cost access to dispute resolution
Future direction Transformation of the Australian Small Business Commissioner into a strengthened Australian Small Business and Family Enterprise Ombudsman that will: • Advocate for small business and family enterprises • Assist small business as a concierge helping them to find the best avenue for dispute resolution The newly appointed Ombudsman, Ms Kate Carnell , was announced by Minister O’Dwyer on 1 February 2016. The new ASBFEO will open for business on 11 March 2016 . Scope of the ASBFEO A business is a small business at a particular time in a financial year if: a) It has fewer than 100 employees at that time; or b) Its revenue for the previous financial year is $5 million or less A small business operated as a family enterprise is a family enterprise
Advocacy • Research and inquiries into legislation, policies and practices affecting small business and family enterprises • Commenting on proposals affecting small business and family enterprises • Advice to the Minister • Contribution to other inquiries • Promote best practice in dealing with small business and family enterprises • Information-gathering power Assistance • Respond to requests for assistance from small businesses and family enterprises • Refer disputes to the Commonwealth, state or territory agency that can best deal with it • Work cooperatively with existing services (No duplication) • May recommend alternative dispute resolution • May publish failure to use dispute resolution process • Information gathering powers
Minister Kelly O’Dwyer “ Each and every small business, family business or start-up is at the heart of the great Australian story of enterprise. ” Minister O’Dwyer’s address to the Australian Chamber of Commerce and Industry, 8 October 2015 Business numbers Output Large Medium 0.3% 3.7% Small 34% Small Large 96.0% 43% Employment Medium 23% Large 31% Small 43% Medium 26%
What is a Family Enterprise? Family enterprise is usually characterised by: • Involvement of multiple family members • Intergenerational transfer of ownership or control • Control by family members • Significant ownership by family members • Family members involved in management Understanding family enterprises Recognising yourself as a family enterprise – Eg. f armers seeing their business as a ‘farm’ or ‘family farm’ – a not a small or family business Lenses include – – Business (business plan / management structure & meetings) – Family (family charter / family council) – Ownership (board and shareholder meetings)
Family enterprise challenges • 80% of family enterprises experienced conflict between family members in the last year • Conflict between family members can affect both the business and family relationships • 37% view family issues as equal or greater to “business - only” issues • Governance, employment and succession are big issues Helping family enterprises • Assistance is available from several sources • Australian Small Business & Family Enterprise Ombudsman • business.gov.au • State/territory Small Business Commissioners and business web pages • Family Business Australia & industry organisations • Professional advisers o Encourage family enterprises to professionalise and plan o Provide advice and support
Red-Tape • Governments and business both Business compliance costs impose rules and requirements. in Australia: $249b/year • Australians work for 8 weeks/year $94b just to pay for compliance costs. government $155b rules self-imposed • rules 16% of resources go to complying with rules and regulations. 2014 report by Deloitte • 1 in 11 employed Australians now works in the compliance sector. Reducing Red-Tape • $2.45b in annual red-tape compliance cost savings – Needs real improvements… – It’s about genuine and timely consultation – Regulators implementing with common sense, empathy & respect (adopting a risk-based approach) • Some ways that work – Federal Regulatory Agency Group improves regulatory coordination & collaboration on small business matters (ASBC, ASIC, ACCC, ATO, FWO) – Fix-it squads deal with practical issues for small business – Focus on smarter regulation
Tips for Prepare – Get advice to understand your rights & obligations small Plan – Use a business plan and keep it alive business Professionalise – You get the customers you deserve Pay and get paid – set payment terms & conditions at the outset Patch up – Settle disputes quickly and use alternative dispute resolution before legal avenues Participate – Join an industry association or business chamber Position – Get connected, network, mentor… Slash energy costs Energy is a major expense for small business It’s key to know its cost and act to reduce – • Every degree of heating above 20 degrees adds up to 10% to energy bills • Laptops can save 80-90% of the energy cost of a desktop • Switching off equipment on standby can reduce your electricity bill by up to 10% • Lighting can account for up to 25% (or more) of electricity bills & there are significant savings in moving to efficient globes in terms of cost / life Free guide @ http://EnergyCut.info/SME-book
Influencing the Quality of the Business Environment Every participant has scope to ‘lift their game’ • Small businesses • Big businesses Industry & professional associations • Media • Academics • Regulators • • Government agencies
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