TRANSCRIPT
Australian Small Business and Family Enterprise Ombudsman Bruce Billson interview with Leon Delaney.
Radio 2CC Canberra
Subject: ASBFEO Small Business Pulse
Leon Delaney
Australian Small Business and Family Enterprise Ombudsman Bruce Billson has released his latest Small Business Pulse report. Bruce, is the patient still alive?
Bruce Billson
Yes, the patient still is alive, Leon, and interestingly I suppose I would be saying a real focus on self-care. I put that to carry your patient analogy along. You know, the small business community's reflecting on a flat and stable economic environment, one that has been a bit challenging for some time with margin squeeze and customers really looking for value at a time when input costs are going up.
But what we have picked up is small businesses are trying to make their own luck. They are working hard to find new ways to generate customer interest, new products and services and particularly looking at whether technology can help to really streamline the heavy burden they are feeling around the business of running the business, those compliance reporting obligations. I think you and I have spoken before – rarely do small businesspeople get into running a business for the back of house, back-room tasks. That is not their jam. But you know, getting that right can be an important foundation for a successful business.
Leon Delaney
Indeed. I did not get into commercial radio to do all the bloody paperwork that you have to send off to ACMA and APRA and all the other people.
Bruce Billson
Small businesses know that being tidy with those sorts of obligations of itself will not make your business succeed. But being untidy about your tax obligations, about you paying your staff on time, superannuation contributions, filing BAS,’ making sure all your licencing is up to date. Look, get that wrong and life is tough as a business owner. So, it is one of those things where good hygiene around the business of running the business means that there can be a greater focus on creating value and wealth and delighting customers. But if we can streamline that, then that is more time to think and develop and work on that customer side of the business rather than the in-house stuff.
Leon Delaney
Now your small business pulse is replete with fascinating looking graphs. But I am just peering, I am just peering at this one here that appears things have been stable since about this time two years ago.
Bruce Billson
Yes, that is right. I mean, what's happened, you know, it's odd to describe it in this way, but in that post Covid era where there was a lot of government support both at a federal, state and frankly also at a local government level, the tax office were cutting people a bit of slack – they even had as their operating motto support and assist. And financiers were saying let us negotiate a way of meeting those obligations. It was a lot of support, and in some cases, more support than they had ever hoped was possible.
That was the time post Covid but as those things came off, so did the conditions that small businesses were operating in. And the graph captures quite a significant fall off.
But you are right, things have stabilised over the last year and a half. That has been quite encouraging. An interest rate cut here and there has put a spring in the step of small businesspeople as their customers are coming back to spending money and their wallets are not as tight as they have been.
But also, they are feeling like cost pressures, Leon, you, and I have spoken before about cost-of-living pressures being business input cost pressures, though, flattened out a little bit as well. So, it is far more stable picture now in terms of the external operating environment and a far greater focus on small businesses that are breathing saying, we have got through that, let us look ahead. We have survived, now what do we need to do to make the business durable and then to make it prosper and flourish into the future.
Leon Delaney
Now, I do not want to rain on anybody's parade, but we have just seen a higher-than-expected inflation figure the other day. We have seen a lower-than-expected economic growth figure today. And the prospect now that the next move in interest rates might well be up, not down. Surely that is a gloomy outlook, isn't it?
Bruce Billson
Look, I do not think anyone in the business community, and frankly any of your listeners with a mortgage, wants to see interest rates go up. But it is important that when they do go up to recognise it has a multiple number of impacts on small business. Small businesses are borrowers as well, you know, half of all small business lending secured by a private home. So, they do not want to miss those payments because that is a roof over their head. And businesses also know that when there is that sort of pressure on the household budget or with their business customers really trying to make sure they stay afloat, you can see a reduction in demand.
So, they were hopeful of another interest rate cut, but what the pulse picks up is, they are not looking externally for things to improve. Small businesspeople are renowned for their resilience and their perpetual optimism. They are looking within and saying, what can we do? Are there new ways to expand our offering? Can we delight customers in new ways? How can technology help? And even for those that are thinking about succession planning for family businesses. There is an acknowledgement that sometimes the new generation of family members might bring new skills and talents that can really revitalise that enterprise.
Leon Delaney
Indeed. Well, I could go on at length about business succession because I have seen recent examples of that where it was not necessarily as smoothly run as people might have hoped. But we might have to talk about that on another occasion because we are running out of time. But Bruce, thanks very much for chatting today.
Bruce Billson
Great to be with you, Leon. And please do not let me miss the opportunity – if you are wanting to help your small business, think about getting an experience or a gift from a small business. That is a great way of sharing the joys of this festive season.
Leon Delaney
Absolutely. Shop local, shop small for your Christmas giving this year. Bruce, thanks again for your time.
Bruce Billson
Take care. Bye, Leon.
Leon Delaney
Bruce Billson, the Australian Small Business and Family Enterprise Ombudsman. And of course, the Small Business Pulse report is released on a quarterly basis.