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Small Business

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 SMEs need support for privacy overhaul 

by Bailey Amber
written by Bailey Amber

Although many of the proposed changes to upcoming data privacy laws are supported by experts, there are some that could have serious ramifications for small-to-medium business owners.

The Australian government is currently seeking feedback from businesses on proposed reforms to the Privacy Act. 

The aim of these reforms is to modernise the Act, which was enacted in 1988, and address growing concerns around data privacy and security. 

Businesses have just over a week left to submit their feedback before the consultation period ends. This feedback will inform the development of new legislation, which is expected to be introduced to Parliament later this year.

The Privacy Act Review Report, released by the Attorney General’s Department in February, was a comprehensive review of the Privacy Act 1988.

The review aimed to identify areas where the Act could be strengthened and modernised to protect individuals’ privacy better and ensure that the regulatory framework remains fit for purpose in light of technological advancements and the changing business environment. 

The report made a range of recommendations for reform, including changes to the definition of personal information, the introduction of new privacy rights, and the establishment of a new privacy regulator. The report also highlighted the need to provide more support for small and medium-sized businesses to comply with the new requirements under the Privacy Act.

The proposed overhaul includes measures to strengthen the protection of personal information and give individuals greater control over their data. These measures include a mandatory data breach notification scheme, enhanced privacy consent requirements, and increased penalties for non-compliance with the Act.

However, there are concerns that the proposed changes may significantly burden SMBs, particularly those with limited resources or expertise in data protection.

Many industry groups and business associations are calling for more support and guidance to be provided to SMBs to ensure they can comply with the new requirements without facing undue hardship. 

Overall, the proposed reforms are expected to benefit individuals by strengthening their privacy protection, but it remains to be seen how they will impact businesses, especially SMBs.

According to Daniel Stoten, the Executive Chairman of Localsearch, the industry requires additional consultation and support structures, especially for small and medium-sized businesses (SMBs). 

He believes that the proposed compliance requirements could pose a significant burden to SMBs, which are already struggling due to the ongoing pandemic. Therefore, he recommends providing more support streams and structures to help SMBs meet the new requirements without facing undue hardship.

Stoten explains: “Localsearch supports consumer protections and responsible marketing, and we understand the reasoning behind the proposal given widespread concerns about cybersecurity following last year’s major cyber breaches with Optus and Medibank.

“However, we believe further consultation, additional support streams and structures for SMBs are needed to support the industry, as the compliance requirements, in particular, could be a serious burden to already struggling businesses,” says Stoten

Removal of exemption

The Privacy Act has previously exempted small businesses with an annual turnover of $3 million or less. However, this exemption is set to be removed under the proposed changes.

Stoten says: “We urge the government to explain clearly to small business owners what is happening so they don’t run the risk of accidentally doing something they shouldn’t. There needs to be adequate training and even a compliance grace period to make the transition as easy as possible, with minimal costs.

“Small business owners are already struggling post-pandemic with inflation, supply chain issues and a tight labour market. Our 2022 Australian Small Business Report found that 78% of SMBs are fearful of a recession this year.

“This is a complex 300 page proposal – your average Mum-and-Dad business simply isn’t going to have the time or resources to understand it, let alone abide by the proposed changes.”

Digital advertising changes proposed

The Review also proposes changes around direct marketing, targeting and trading which could have a profound impact on how the digital advertising industry operates. 

Stoten says: “The ability to harness data about an individual to better digitally target advertising to them based on their preferences and past behaviours has been one of the most impactful developments for this industry in its history.

“Digital retargeting, in particular, is a key business driver for small business owners, who may have less budget for traditional advertising methods, to market themselves to customers.

“Although we support consumers’ right to opt-out of targeted marketing ads if they so wish, this doesn’t come without consequences. It could result in irrelevant ads being marketed to the wrong people, wasting business owners’ hard-earned investment and consumers’ time.” 

While we won’t know the exact impacts of the Review until the federal government has made a decision on the proposal, it is clear that small businesses could be seriously affected. Localsearch encourages small businesses to have their say via the government website’s simple form.

Stoten concludes: “I have no doubt that some of the proposed changes could seriously damage many of the 2.5 million small business owners in Australia, who are already struggling to keep their heads above water. Some wouldn’t be able to survive.”

Businesses are encouraged to submit their feedback on the 116 proposals to the Attorney-General’s Department before the deadline of March 31, 2023.

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Business

How B2B partnerships will transform small business in 2023

by Bailey Amber
written by Bailey Amber

This year hasn’t started off kind to small business owners. With rising interest rates, increased cost of living, and businesses still struggling with workforce shortages, the companies that can hang on throughout this year will come out the other end stronger.

Despite these challenges, it isn’t to say that we won’t see growth in the small business sector. Alternatively, we can expect businesses to band together and begin relying on B2B partnerships to expand their businesses despite a looming recession. 

While B2B partnerships aren’t a new tactic, we can expect to see many more partnerships and collaborations pop up throughout this year. B2B partnerships have the potential to transform small businesses by providing new opportunities for growth and innovation. 

Accessing and tapping into new markets

By utilizing and partnering with complementary businesses, it can help them access new markets that they wouldn’t have otherwise been able to tap into. By partnering with a business that already has an established presence in a new market, small businesses can quickly and efficiently expand their customer base.

Expanding products and services to become a more comprehensive business

By collaborating with other businesses it can help smaller businesses expand their services by allowing them to offer something they wouldn’t have been able to previously. It ends up acting like an extension of your service and simultaneously allows small businesses to tap into different types of customer basis and increase loyalty. 

Costing-saving advantageous 

Partnerships or collaborations often come with the assumption that it comes with a heavy price tab, but that’s not necessarily true. With B2B partnerships it can actually help with cost saving.

Businesses have the opportunity to save money by pooling their resources and sharing the brunt of the costs. For example, small businesses could partner to share specific tools or machinery, which helps ease pressure of upfront costs for all parties. 

Increase in a competitive edge and increase in market share

Through these types of partnerships, small businesses can expect an increase in market share and have a better competitive advantage. By partnering with complementary businesses, small businesses have a better leg up on the competition because they now have a more comprehensive service offering, a wider customer base and demographic, and have entered into new markets. 

Small businesses that don’t leverage B2B partnerships this year will be left behind as they will be missing out on profits, new customer acquisition and will lack a competitive edge. B2B partnerships offer small businesses a chance to innovate in the most cost-effective and efficient way. 

This year will bring innovative B2B partnerships that will lead the way for how future small businesses will interact with the market, leverage their technology, their services but most of all how they will change the landscape of how traditional small businesses have been operating. 

Overall, B2B partnerships have the potential to be a game-changer for small businesses in 2023. By leveraging these partnerships, small businesses can gain access to new markets, products, and services, save money, become more competitive, and drive innovation.

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Xero report highlights small businesses seeking more support from advisors

by Bailey Amber
written by Bailey Amber

A new report released by Xero found that small businesses have been relying more heavily on their advisors for additional services and support. 

In addition to traditional accounting and compliance offerings, small businesses have been seeking value-added services such as support with app and software setup (35 per cent), HR advisory (38 per cent), and mentorship for start-ups (33 per cent).

Xero’s State of the Industry report highlights how the impact of the pandemic and ongoing talent shortage has transformed the offerings of advisors to their small business clients. 

The survey, which polled more than 550 accountants and bookkeepers in Australia, discovered that 85 per cent of large practices had been called upon by small businesses to provide a wider range of services in the past six months.

Highlights from the State of the Industry Report:

  • Eighty-five per cent of larger practices reported that either some (41 per cent) or most (44 per cent) of their clients have relied on them more for services and support in the past six months.
  • These larger practices are offering more advisory services, including HR advisory (38 per cent), sustainability reporting (24 per cent), startup mentoring/business development (33 per cent), and advice on capital raising (32 per cent).
  • Thirty-three per cent of all practices emphasize monitoring employee well-being.
  • Forty-four per cent of all practices anticipate the need to raise staff wages to counteract rising inflation; as a result, 45 per cent expect to increase their fees.
  • Despite challenges, 79 per cent of practices are able to meet compliance deadlines without requiring extensions.
  • Larger practices with 11 or more employees acquired half (53 per cent) of their new small business clients from new market entrants.

Addressing the talent shortage

The search for qualified personnel continues to pose a major challenge for the industry, as 38 per cent of the practices surveyed in the Xero report stated that hiring experienced team members is a concern. Additionally, almost a quarter (22 per cent) of the practices reported difficulty in hiring in general. 

To address these challenges, practices are taking proactive measures to ensure their staff are well-supported and equipped with the necessary skills. One-third (33 per cent) of the surveyed firms are now monitoring employee well-being through performance apps and surveys, while 40 per cent are offering benefits to their staff and providing opportunities for development and training. 

Despite these efforts, only 29 per cent of the practices surveyed have increased compensation, and 32 per cent have opted to hire new graduates or interns to support their workflow.

Will Buckley, Country Manager, Xero Australia, said, “As we look to the year ahead, we know that small businesses will have a lot to navigate.

“I am encouraged to see this research confirm what we suspected; that accountants and bookkeepers are playing a more holistic role in supporting their clients, and the digitisation trend that accelerated during the pandemic looks to be continuing. 

“The findings from Xero’s research highlight more clearly than ever the critical role accountants and bookkeepers play in keeping small businesses up and running – not just with their finances but now in other business-critical functions as well.

“Making up over 97 per cent of all Australian companies, small businesses are the lifeblood of Australia’s economy and supporting them is an important responsibility for the industry. 

“However, as the role of advisors and the value they offer small businesses continues to evolve, addressing the skills and talent shortage required to offer these services continues to be a key priority.

“When it comes to staff retention, practices need to start thinking differently about attracting and retaining employees,” says Buckley. 

The trend is likely to continue

The future of the accounting industry in Australia is a mixed picture, with some practices anticipating increased demand for their services while others are predicting a slowdown.

According to the report, 66 per cent of large accounting practices expect their clients to need more support in the coming year. However, this sentiment is not as strong among smaller practices, with only 36 per cent sharing this view.

The report also highlights the growth in the small business sector, with 44 per cent of new small business clients from newly established businesses in the past 12 months.

Despite this growth, the industry is facing significant challenges, with 45 per cent of practices forecasting an increase in fees and 31 per cent considering reducing staff due to the impact of the economic environment.

Xero’s CEO, Buckley, recognizes the importance of supporting the accounting industry, especially as it adapts to provide essential support to small businesses in Australia. He believes that with the uncertain economic outlook, the industry must be supported to evolve and grow in order to help Australian small businesses thrive.

Find more here: Xero’s State of the Industry

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Business

How to improve employee well-being through workplace training

by Bailey Amber
written by Bailey Amber

A lot has happened over the past couple of years, and many of us are not okay.

Between political and social unrest, a global pandemic, the war in Ukraine and the rising cost of living, it is only natural that we’ve been preoccupied.

While this has many personal implications, our emotional wellness also extends into the workplace. Mental illness is now the leading cause of sickness, absence, and long-term work incapacity in Australia. Each year $543 million is paid in workers’ compensation for work-related mental health conditions.

Workplaces have not only obligations to employees around mental health under the Work Health and Safety Act but also have much to gain from cultivating mentally healthy environments: 

  • A total of 3.2 days per worker are lost each year through workplace stress
  • A survey of over 5000 workers indicated that 25% of workers took time off each year for stress-related reasons
  • Preliminary research shows that Australian businesses lose over $6.5 billion yearly by failing to provide early intervention/treatment for employees with mental health conditions.

The cost of ignoring the problem is far greater than the cost of developing and implementing strategies to create a safe and healthy workplace. However, although organisations largely have the best intentions around mental health, they don’t always have the practical skills to manage employee issues effectively. 

Prevention is better than cure 

Research shows that the risk and protective factors inherent in work environments can be controlled and enhanced to promote positive mental health and well-being. Implementing preventative actions at the individual, team, and organisational levels can reduce stigma. Additionally, this will assist people in identifying mental health issues in themselves and their colleagues, promote early and appropriate help-seeking, and ensure people are appropriately supported to remain connected to work or make an adequate return to work if the absence has been necessary.

Offer opportunities for growth

People love to learn and feel they have opportunities to progress, which is why great employee well-being includes having the opportunity to grow. According to Skillsoft’s IT Skills and Salary Report 2022, employees that switched employers within the past year cited a lack of growth and development opportunities as their top two reasons for doing so, second only to better compensation and to take precedence over work/life balance.

When employees do not feel inspired and the company does not support their progression, their workplace satisfaction and well-being will drop. That is why companies are offering more career mobility opportunities, which support employees who want to move across different departments or even change their occupations.

Leadership education in employee well-being

Managers are often the first person to spot when an employee is struggling with their well-being at work and similarly the first port of call for an employee to discuss their mental health concerns. As a result, it’s essential for all managers to be trained on how best to navigate sensitive conversations around employee mental health and well-being. 

Training that reinforces a personalised approach to employees and the need for empathy will be most effective to help leaders learn to adjust their styles based on the individual requirements of team members. Workplace well-being is not one size fits all and can’t be treated as such.

Improve awareness of employee well-being

While it is not easy to create fundamental cultural change, there are two key questions that your organisation can ask to support mental health awareness and employee well-being through training.

  1. Who needs training? Identify the specific roles within your organisation that are associated with high-stress levels and develop a succinct training curriculum tailored to those positions. For example, the vast majority of retail and fast food workers have experienced abuse from customers, but many customer-facing employees lack the training to manage abusive behaviour from members of the public, and support following such incidents is also often lacking.

Employees who are at risk of discrimination – such as those with disabilities or those from minority ethnic groups – still face barriers to work. Appropriate training could help workers practise better self-care and improve the way they interact with colleagues and customers who are at greater risk of discrimination.

  1. What do they need to know? Implement a training curriculum that will help to normalise mental health issues and provide a safe space to talk about employee well-being initiatives. Getting everyone within your organisation on the same page about these key issues is a good way to create a shared understanding of your organisation’s goals and expectations and reduce the stigma around mental health.

The bottom line for business is that every dollar spent on evidence-informed interventions to improve mental health and well-being brings a return of up to $14 in reduced absenteeism, increased productivity and reduction in compensation claims. It can also help create a workforce that is resilient to workplace stress, boost staff morale, help establish an organisation as an employer of choice and ensure that more of your people are doing the best job they can do for more of the time.

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Why it’s important to build your B2B online store on a rock-solid foundation

by Bailey Amber
written by Bailey Amber

Are you wondering whether it’s time your enterprise took a dabble or a deep dive into the brave new world of B2B eCommerce? If you answered in the affirmative, join the club.

Here in Australia and around the world, B2B online selling is going off like a rocket. Thanks to the Covid crisis, which forced tens of thousands of sales reps off the road for extended stretches during 2020 and 2021, businesses have become habituated to doing more of their dealings with suppliers digitally. 

What began as a necessity quickly became a preference. More than three-quarters of B2B customers preferred to interact virtually with sales reps and place orders online rather than have face-to-face interactions, according to 2020 research from McKinsey. 

At that time, just 20 per cent of survey respondents stated they were looking forward to the return of the rep. 

‘Notably, 70 per cent of B2B decision makers say they are open to making new, fully self-serve or remote purchases in excess of $50,00, and 27 per cent would spend more than $500,000’, the report noted.

The big B2B opportunity

Little surprise then that high-tech market watchers are predicting the rise of B2B online selling will be one of the biggest business trends of the 2020s. 

Forrester estimates B2B eCommerce sales will hit an extraordinary $3 trillion in the US alone by 2027. For enterprises operating in this space, it’s time to act – and fast, according to Gartner.

‘Sales leaders must prep their sales organisations to respond to the widespread shifts in B2B customer buying behaviour likely over the next five years,’ Gartner contributor Rama Ramaswani wrote in 2021.

‘Leading B2B sales organisations will rapidly implement digital selling models, moving away from the longstanding model of sales reps as the primary commercial channel.’

Seamless and secure selling

The next couple of years will likely see Australian B2B businesses playing catch-up with their B2C counterparts. The latter have long since recognised the necessity of delivering swift, seamless online service, a la Amazon, eBay et al. 

Many B2B businesses lack the high-tech infrastructure necessary to market and sell their offerings at scale and – just as importantly in the relationship-driven B2B landscape – maintain and sustain their connections with customers. 

So much, so that market watchers have posited that, by the end of 2024, two-thirds of B2B organisations currently doing digital commerce in some guise will abandon their existing platforms and processes. 

And they’ll be looking to replace them with solutions that support the delivery of ‘consumer standard’ customer and product experiences. 

Better billing at scale

When you’re dealing with business buyers online – and off! – timely, accurate and transparent billing processes engender confidence in your organisation’s capacity to become a long-term, trusted partner that can be counted on to deliver the goods.

Conversely, opaque, error-prone invoices and systems can damage credibility and prompt decision-makers to think twice about the wisdom of entrusting their custom to your business.

That’s why investing in cloud-based revenue management software that covers the revenue cycle from end to end and links seamlessly with the SAP or Microsoft Dynamics ERP solution that powers your business makes sense. 

It’s foundation eCommerce technology that allows you to capture and consolidate sales data and integrate it with the systems that track and manage your customers. Choose a platform with sophisticated data analysis capabilities, and you’ll also be able to extract actionable insights that can inform product and pricing decisions.

If you’re serious about promoting brand awareness, strengthening relationships with business buyers and making doing business with your organisation digitally a swift, seamless and secure experience, it should be a key pillar of your B2B e-commerce stack.

Surviving and thriving in the B2B ecommerce era

The Covid crisis was the catalyst for a seismic shift in the way businesses engage with one another. In 2023, B2B enterprises that don’t provide their customers with the opportunity to transact with them digitally risk losing minds and market share to more far-sighted competitors that are willing to evolve their modus operandi to reflect changing times. 

Against this backdrop, investing in systems and processes that enable your enterprise to offer an outstanding customer experience at every stage of the online purchasing process is likely to prove an extremely prudent move.

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BusinessEntrepreneur

How to increase sales even if your marketing budget is decreasing

by Bailey Amber
written by Bailey Amber

Australia’s local retail businesses are heading into peak season as consumers take advantage of retail events, holidays and end-of-year celebrations.

This year, however, the rising cost of living, ongoing supply chain disruptions, and the anticipation of further inflationary pressures are making businesses think a little more carefully than usual with their spending.

As a result, many small businesses are reassessing their budgets – particularly costs associated with advertising and marketing. Fortunately, with just a little bit of work, a smaller budget doesn’t have to translate into smaller sales.

Turn Google into your biggest fan

Ads on Facebook and Google have long been a go-to for small businesses due to their simplicity of creation and their effectiveness in reaching a new audience. However, there are cost- and time-effective steps you should take to make Google search work for you before you think about ad spending. The first step a prospective customer takes when they’re looking for a product or service is conducting a Google search. From there, 75 per cent of all clicks go to the top three to five results. So, it’s vital to ensure you’re appearing at the top of your relevant searches. 

By claiming your free Google Business Profile, updating it with all your information, and encouraging customers to leave reviews, you’ll be on the way to the search results. There are various metrics that impact how well you rank, but some that you can and should think about immediately are the quality, quantity, and regularity of your Google reviews and how often your business replies. 

Because your customers can help optimise your Google profile, setting yours up isn’t only cost-effective and time-effective. During peak season, local businesses don’t have the luxury of masses of time. You don’t need to do masses of heavy lifting to create a Google presence that genuinely impacts leads and sales – both immediately and long-term. Then, with your profile optimised, there’s nothing to stop you from investing in advertising when your budget allows it.

Enable your website to sell your business

Consumers today are clear on what they want: to be able to find exactly what they’re looking for quickly and conveniently. When a consumer first clicks on your website, it’s important that they can easily find any information or products they’re looking for. If they have to search through several pages or can’t immediately find a clear answer, the customer will leave and try a competitor – which is why only two per cent of website visits convert to an enquiry or sale.

Getting them to your website isn’t the end of the journey; you must convert them into customers. Webchat widgets, which allow real-time responses with either pre-programmed answers to common questions or human-managed chats for more personalised conversations, can increase website conversion rates by 20 per cent because they lead a customer to exactly what they need within seconds. 

Keep the experience convenient

From initial conversations to payments to delivery, consumers value convenient business interactions above all else.  Importantly, this includes making information easy to understand and access. For example, once a customer has made a booking or purchase, send them both a confirmation email and a confirmation text. Australians typically have their phone on them, resulting in a massive 98% of texts being opened – comfortably higher than emails opened and cold calls answered.

Meanwhile, Podium’s  Business-to-Customer Communication Report revealed that almost 50 per cent of Aussies regularly delete business emails without even opening them – making a confirmation or reminder text much more likely to be read than a reminder email. This preference for SMS can be used throughout the customer journey. Payment links are a particularly popular option, as consumers are increasingly demanding convenient payment options, and one in four consumers will abandon a transaction if their preferred payment method isn’t offered. 

Don’t miss out because the final, most important stage – payment – wasn’t flexible.

Use existing customers to create new customers

A consistently convenient purchasing journey will result in consistently happy customers. Happy customers are a business’s biggest marketing tool because they will not only turn into return customers but also inspire new customers. Remember to send an SMS prompting customers to leave a Google review. 

You can continue to remind customers of their experience by prioritising SMS marketing in your future campaigns. With 90 per cent of consumers preferring to engage with businesses through text messages, converting marketing campaigns delivered by SMS can foster more positive interactions. Just like with email marketing, there are platforms and products that can help you segment your customer base to ensure you’re sending personalised and relevant marketing messages over text. 

Remember, Aussies love their small businesses, and they’ll be fiercely loyal to a business that treats them well and communicates with them on their terms. As long as you prioritise convenience throughout the customer journey and keep up communication, you can feel confident that reassessing your marketing budget doesn’t have to cut into your sales.

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Harnessing the power of data can grow business revenue by up to 9.5%, research shows

by Bailey Amber
written by Bailey Amber

Businesses in Australia and New Zealand that use data effectively can, on average, increase their annual revenue by 9.5%.

This translates to an additional $38 million in annual revenue for large organisations in Australia with more than 200 employees.

According to a new AWS report prepared by Deloitte Access Economics, organisations with more than 100 employees improved their data capabilities in the previous year, with 34 per cent achieving Advanced or Master levels of data maturity, compared to 16 per cent in 2021. 

Almost half of the organisations polled (48 per cent ) stated that effectively capturing and analysing data can lead to increased productivity, followed by improved customer experience (45 per cent ) and lower operating costs (42 per cent).

Finance and insurance companies scored the highest on the data maturity scale, with 50 per cent achieving Advanced or Master status, followed by manufacturing (45 per cent ) and information, media, and telecommunications (33 per cent ).

On the other hand, construction, healthcare and social assistance, and retail trade organisations have the lowest data maturity levels, with less than 20 per cent of surveyed organisations in these industries achieving Advanced or Master levels of data maturity.

Unusual challenges

While improving data maturity benefits businesses, large organisations in Australia and New Zealand continue to face challenges in climbing the data maturity ladder, with 42% of organisations achieving Basic and Beginner data maturity.

The main barrier cited by organisations to use data and analytics was a lack of funding (44 per cent ), which has been exacerbated by COVID-19, with 49 per cent of respondents reporting that competing priorities have resulted in fewer resources for data and analytics since the pandemic’s onset. Furthermore, 37 per cent of organisations cited poor data quality as a barrier to businesses adopting more advanced data analytics.

“We are excited to see that more organisations have advanced their data capabilities, which will help them to drive productivity, and create a positive impact on the economy while delivering significant financial returns for their business,” said John O’Mahony, partner at Deloitte Access Economics.

“Investing in cloud solutions will help businesses further their data capabilities and leverage advanced analytics tools such as artificial intelligence, machine learning, and the Internet of Things to achieve data-driven insights.

In fact, businesses that already use the cloud are 71 per cent more likely to have invested in artificial intelligence and machine learning capabilities versus organisations using on-premises data storage. To increase productivity and innovation, organisations should have a clear and practical roadmap for advancing on the data maturity ladder, invest in attracting and retaining talent, and leverage the right technology to reap the full benefits.”

 According to the report, one-third of Australian and New Zealand organisations (35 per cent ) cited a lack of skilled resources as a barrier to developing their data and analytics capabilities. To improve data maturity, 33 per cent of surveyed organisations prefer to upskill their current employees, followed by outsourcing to other organisations (24 per cent ), and hiring skilled staff (24 per cent ).

“Data can be an invaluable source of growth for organisations in Australia and New Zealand. The key is recognising its inherent value, analysing it effectively, and building a data-driven culture.

“No matter what stage organisations are in their data journey, AWS is committed to helping customers leverage the scalability, cost efficiency, and security of the cloud to scale their data projects and unify their data to drive productivity and innovate on behalf of their customers,” said Rada Stanic, chief technologist at AWS in Australia and New Zealand.

“Organisations will also benefit from building data skills within their teams, which may involve upskilling current staff through on-the-job training and training courses or collaborating with organisations such as our extensive network of AWS Partners.

“As organisations increase their data maturity, it will transform how they solve problems and build customer experiences, leading to breakthroughs in all industries, including healthcare, finance, retail trade, and manufacturing operations.”

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Rules against unfair contract terms proposed to be tougher

by Bailey Amber
written by Bailey Amber

Companies that violate consumer and competition laws may now be subject to new, more severe penalties, thanks to legislative changes approved by Parliament last week. 

Consumer-facing companies should review their standard form agreements and procedures for submitting or claiming to rely on them immediately.

The modifications come in two parts: the addition of fines and other modifications about unfair contract terms, as well as significant increases in the maximum fines for violations of specific provisions of the Competition and Consumer Act, including the Australian Consumer Law.

Penalties for unfair contract terms will take effect a year after the bill receives royal assent. The increased CCA penalties will go into effect the day after Royal Assent is granted. The Treasury Laws Amendment Bill 2022 was approved by both Houses of Parliament on October 27, 2022. Violations committed after it goes into effect will face harsher penalties under the Competition and Consumer Act. The new maximum financial penalties for businesses are the greatest of the:

  • $50,000,000;
  • Three times the value of the “reasonably attributable” benefit obtained from the conduct, if the court can determine this; or
  • if a court cannot determine the benefit, 30 per cent of adjusted turnover during the breach period.

Previously, the maximum fine was $10 million, equal to either 10 per cent of the relevant annual turnover or three times the benefit. The top fine for a single offender will rise from $500,000 to $2.5 million. These maximum punishments apply to a variety of offences and civil penalty provisions under the Australian Consumer Law, such as unconscionable behaviour, false or misleading representations, harassment and coercion, supplying products that don’t meet safety or information standards or that are subject to safety ban, and more.

They also apply to most civil and criminal offences under competition law, including cartel offences, the news media & digital platforms’ mandatory bargaining code provisions, the international liner cargo shipping provisions, and the prohibited conduct in the energy market provisions.

Additionally, more small business contracts will be covered by the modifications. Contracts with small businesses that employ fewer than 100 people or have an annual revenue of less than $10 million will be covered by the protections, regardless of the contract’s value. The amendments also clarify other legal provisions, such as the definition of “standard form contracts.”

Maximum penalties increased five-fold

The maximum penalties for companies that violate these provisions have been increased under the new laws to the greater of $50 million, three times the value derived from the violation, or, if the value derived from the violation cannot be determined, 30% of the company’s revenue during the time it engaged in the violation.

“The increase in penalties should serve as a strong deterrent message to companies that they must comply with their obligations to compete and not mislead or act unconscionably towards consumers,” ACCC Chair Gina Cass-Gottlieb said.

“These maximum penalty changes will allow the Courts to ensure that the penalties imposed for competition and consumer law breaches are not seen as a cost of doing business, but rather as a significant impost and something likely to raise the serious attention of owners or shareholders.”

The changes also include the introduction of penalties for businesses that include unfair contract terms in their standard form contracts with consumers and small businesses.

“We have long highlighted the adverse consequences of unfair contract terms on consumers and small business, including franchisees, and suggested that they be outlawed and penalties are required to provide a stronger incentive for businesses to comply,” Ms Cass-Gottlieb said.

Previously, the Courts could declare specific terms of a contract unfair and therefore void, but they were not prohibited, and the Court could not impose any penalties on businesses that included them in standard-form contracts.

“Businesses have 12 months to review and update their standard form contracts before these penalties apply. These changes will improve small business and consumer confidence that they will not be taken advantage of when entering into or renewing standard form contracts in the future,” Ms Cass-Gottlieb said.

“Many small business complaints about big business are about unfair contract terms, and it will be an enormous boost to small businesses that there will be a far stronger deterrent against using such terms.”

“Standard form contracts provide a cost-effective way for many businesses to contract with significant volumes of customers. However, these contracts are largely imposed on a ‘take it or leave it’ basis. The unfair contract terms laws are vital to protect consumers and small businesses against terms in these contracts that take advantage of this imbalance in bargaining power. We are pleased that these laws have been strengthened,” Ms Cass-Gottlieb said.

Source.

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Three out of every four SMEs in Australia expect a cash flow problem before 2024: report

by Bailey Amber
written by Bailey Amber

Businesses will need to actively monitor their income and expenses to maintain positive cash flow since economic headwinds, ranging from inflation and supply chain delays to higher interest rates and decreased consumer spending, are expected to persist throughout FY24. 

According to an unsettling new report, three-quarters of SMEs expect reduced cash flow before July of next year. Small Business Loans Australia, an Australian comparison website that assists Australian business owners in selecting the best financing and loan options in Australia, performed the research, which included 253 Australian SME owners and decision-makers.

There were 68 per cent micro businesses (1-10 employees), 18 per cent small businesses (11-50 employees), and 14% medium-sized businesses among the respondents (51–200 employees).

SMEs are expecting a cash-flow crisis

Three-quarters (76 per cent) of respondents said rising interest rates and inflation would impact their cash flow before FY24. Specifically, 30 per cent feel their cash flow would be damaged because it will be more difficult to recover consumer payments, while 26 per cent believe it will be more difficult to generate customers. Another 20 per cent stated that both issues would impact their cash flow. According to the survey, 44 per cent of respondents do not have a strategy in place to maintain cash flow during difficult times. 

How much cash flow do small businesses require to stay afloat? Small Business Loans Australia also inquired about the amount of cash flow needed each month to cover business expenses. Although 68 per cent of all respondents are tiny enterprises, more than a third (39 per cent) claimed they need more than $50,000.

Will fewer small businesses invest in themselves?

Small Business Loans Australia wanted to know if the ability and incentive of small businesses to invest in themselves would be impacted by rapidly rising interest rates and inflation. More specifically, more than a quarter (29 per cent) of respondents saidthey had no plans to invest in their firms at all this fiscal year.

Forty per cent (40 per cent) will postpone planned investments until conditions improve, demonstrating that many small businesses’ motivation to grow is closely related to excellent economic conditions. Fifteen per cent will stop or have already terminated investment in their company, while only 17 per cent would continue to invest.

Among the businesses who had planned to invest in themselves before July 2024 (including those who are cancelling their investments), half (56 per cent) planned to invest more than $50,000, and a quarter (27 per cent) planned to invest more than $70,000.

The recent ABS Business Conditions and Sentiments survey found that in the first three months of 2023, 30 per cent of employing businesses had planned to increase wages and salaries, and 27 per cent would increase employee numbers. However, small businesses are less likely to action these investments to the same extent as larger businesses.

Alon Rajic, the founder of Small Business Loans Australia, says: “As Australian businesses continue to face the repercussions of the last two years, a significant proportion will have challenges, particularly without a savings buffer or strategy to help meet their expenses.

“One of the most effective ways to invest in and protect a business is to grow customers and sales – especially acquiring customers who have healthy incomes and good cash flow. This could be a good time for small businesses to develop a strategy to not only survive but grow. Businesses often reduce costs when external conditions impact them but then de-prioritise, driving new sales. However, there are opportunities even in tough conditions. 

“Growth often requires investment. Improving your product or service offering, getting in front of new customers, and customer loyalty will be important for many businesses that want to succeed in these times. For most, it will require financing.”

Alon adds: “Businesses seeking financing to help them will have a plethora of loan products to wade through. Research and loan comparisons will be important to finding the most suitable and lowest-risk loan. This may include flexibility in repayments and lower fixed interest rates. Many loans may have hidden costs and fees that should be factored into decision-making.

“However, ultimately, it is important for SMEs to seek advice from a licensed financial adviser before committing to a loan to ensure they can meet repayments and higher interest rates during periods of reduced cash flow. Using a comparison service can also assist in finding an appropriate loan option with lower interest rates.”

The full survey results can be found here.

Source: Small Business Loans.

ABS, June 2022 data: abs.gov.au/statistics/economy/business-indicators/business-conditions-and-sentiments/jun-2022

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Hospitality workers are putting in longer and harsher hours to make up for the staffing crisis, report finds

by Bailey Amber
written by Bailey Amber

Prior to the pandemic, the hospitality industry routinely used immigrants to fill job openings. Hospitality businesses are struggling to meet labour demands since many workers were forced to return home when the gates closed, and there is a significant backlog in visa processing.

In fact, according to Australian Bureau of Statistics data, 51 per cent of hotel businesses report difficulty recruiting suitable personnel.

A new report from the leading shift work platform, Deputy, The Big Shift: The Changing Landscape of Australian Hospitality, reveals insights into how the hospitality industry is coping more than two years after the pandemic began, amid widespread labour shortages and supply chain disruptions.

Shift workers working multiple jobs and longer hours

Many people have taken up jobs across numerous hospitality businesses as labour shortages plague the industry. In the Deputy platform, the proportion of shift workers who worked multiple jobs in the hospitality industry peaked in July 2022 at just under 3 per cent. In addition, shift employees are working greater hours than they did on average before the pandemic or during high holiday and shopping seasons (such as Christmas), when shift workers’ hours typically peak.

According to Shashi Karunanethy, an independent labour economist, this can be attributed to the casualisation of work and increased job opportunities in the gig economy. At the same time, many workers may be compelled to expand their share of shift work in order to keep up with rising living costs, with the percentage of shift workers working multiple jobs rising in lockstep with inflation rates.

Major states hardest hit by labour shortages 

According to the data, this is especially noticeable in big areas like Victoria and New South Wales, where employers are rostering 30 per cent less shift work hours than before the outbreak. Karunanethy explains this to the presence of big cities such as Sydney and Melbourne, which are hubs for education and business and hence attract more international students and overseas workers who work in hospitality. 

States that rely less on these people, such as Western Australia, have had the fastest rebound. However, these nations are not immune to labour shortages and continue to roster 10 per cent fewer shift work hours than before the outbreak.

Recovery across different hospitality businesses

Accommodations and sit-down restaurants experienced the greatest job gains and recoveries through 2022, with shift work hours increasing by 50 per cent and 30 per cent, respectively, compared to pre-pandemic levels. Given that many Australians have avoided overseas travel, Karunanethy says they are turning to staycations and dining experiences to meet their experiential needs. On the other hand, bars and fast food outlets continue to struggle with labour shortages. 

To present, bars continue to employ 20 per cent fewer shift workers than before the pandemic. With growing price pressures from food and alcohol suppliers and problems moving to new revenue potential in takeaway and delivery services, the sector is experiencing a slew of challenges.

While food establishments are booking 40percent fewer hours than before the pandemic, this is mostly due to the industry’s adoption of food delivery models and labour-replacing technologies, resulting in fewer total shift work hours. 

Victorian fast food outlets showed the greatest decrease in shift work hours of any state. Consumer spending behaviours in the drive-through and in-app delivery purchases have now become maintained habits in the state that have been subjected to the most stay-at-home regulations.

A significant barrier for women employees 

The centrepiece reform to increase women’s labour market participation is universal daycare, with one in four potential workers citing childcare as the primary barrier to employment. As Baby Boomers and Generation X also take on childcare obligations, childcare policy will also impact older employees’ capacity to enter labour.

In the entire sector, women now make up 48 per cent of shift work hours, up from 47 per cent in 2020. Since women now work the bulk of shift work hours, cafes and coffee shops had the biggest growth for female shift employees (4 per cent). 

For more information and additional findings, access the full report here.

Visit: Deputy.

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