city of gosnells: voice of australian business
TRANSCRIPT
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The Voice of Australian Business 2016Wave 5
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The Voice of Australian Business 2016
Fab Fanayan
Director – Taxation & Business Services
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Why do we collect this data?
• 2,121,235 businesses in Australia, 96%
are SMEs
• Producing over 90% of GDP
• We are looking to better understand our
clients concerns
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The focus of the Voice 5
• The current SME environment
• Attitudes towards technology
• Superannuation and retirement
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What is an SME?
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Definitions
micro: 1-4 employees
small: 5-19 employees
medium: 20-200 employees
Metro – A capital city or its surrounding suburbsNon-Metro – a non state or territory capital or a regional or remote area
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The Voice 5 - What did we learn?
• Larger SMEs have greater confidence
• Growth is the main goal
• Larger businesses are looking to
external advice and guidance
• Outsourcing & Technology is gaining
momentum
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The current SME Environment
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21%
14%
25%
16%
18%
40%
40%
34%
44%
41%
23%
25%
25%
24%
22%
13%
18%
15%
14%
16%
3%
3%
2%
3%
3%
Wave 5
Wave 4
Wave 3
Wave 2
Wave 1
Confidence in business prospects over next 12 months
Extremely confident Somewhat confident
Neither confident nor worried Somewhat worried
Extremely worried
Confidence is growing
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The biggest concerns for SMEs
23%
17%
16%
16%
8%
7%
5%
30%
Cash flow
Growing revenue
Government regulations and compliance
Competition
Finding staff
Retaining staff
Something else
Nothing
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21%
19%
23%
23%
22%
20%
40%
37%
45%
41%
40%
41%
23%
25%
21%
23%
21%
26%
13%
17%
8%
8%
13%
12%
3%
2%
3%
5%
4%
2%
Total
Micro
Small
Medium
Metro
Non-metro
Extremely confident Somewhat confident Neither confident nor worried
Somewhat worried Extremely worried
Confidence in business prospects over the next 12 months
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Main focus for 2017/18
41%
23%
13%
8%
6%
2%
7%
Improve profits
Improve cash flow
Improve business value
Upskilling employees
Improve technology/ IT infrastructure
Improve solvency
Another area
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Likely business action
49%
34%
32%
28%
23%
21%
16%
13%
8%
7%
6%
4%
4%
2%
2%
13%
Acquire new customers
Grow revenue
Grow profits
Hire new staff
Introduce new products or services
Invest in new technology
Invest in new plant or equipment
Invest in marketing/advertising
Exit the industry (e.g., orderly closure or sale)
Introduce new initiatives to support your employee value…
Invest in new premises
Obtain/seek specialised turnaround or restructuring advice
Re-finance
Acquire a new business
Make formal appointment over business (e.g.,…
None of the above
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Where is this confidence coming from?
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What affects Confidence?
3%
3%
2%
2%
2%
2%
27%
22%
16%
10%
9%
5%
56%
61%
54%
62%
62%
70%
9%
10%
21%
22%
19%
18%
4%
4%
8%
4%
9%
6%
Recent interest rate cuts
The re-prioritisation of the small business portfolio by theFederal Government
The falling Australian dollar
The Federal Budget announced in May this year
The election of the ‘slim majority’ Turnbull Government
The threat of Australia’s AAA credit rating being downgraded
Attitudes to the impact of Australian political and economic events on business - overall
A significant positive impact A positive impact No impact A negative impact A significant negative impact
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Attitudes to the impact of international political and economic events
2%
2%
1%
1%
1%
1%
5%
7%
4%
7%
5%
6%
49%
64%
73%
77%
82%
81%
38%
25%
17%
13%
10%
9%
5%
3%
6%
2%
2%
2%
General market volatility
The slowdown of China’s economy
Terrorist activity
The upcoming US elections
Humanitarian issues (e.g., refugee crisis in Europe)
Brexit (UK exit from the European Union)
A significant positive impact A positive impact No impact A negative impact A significant negative impact
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Not much faith in the Turnbull Government
2%
1%
1%
3%
1%
2%
15%
14%
17%
15%
12%
17%
38%
37%
39%
40%
43%
33%
27%
26%
28%
27%
27%
26%
19%
22%
15%
16%
16%
22%
Total
Micro
Small
Medium
Metro
Non-metro
Expectations of the Turnbull government to address issues affecting SMEs
Very high expectations High expectations Neither high nor low expectations
Low expectations Very low expectations
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The life of an SME
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Age of the Business
17%
23%
13%
11%
14%
21%
30%
27%
37%
31%
35%
26%
52%
51%
51%
59%
52%
53%
Total
Micro
Small
Medium
Metro
Non-metro
0-4 years 5-10 years 11+ years
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Founders and Sole Founders
19%
27%
16%
4%
21%
16%
28%
37%
22%
13%
24%
31%
54%
36%
62%
83%
55%
53%
Total
Micro
Small
Medium
Metro
Non-metro
Is the founder of their business
Sole founder Joint founder Neither
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Age of Sole Founders
38
41
33
30
38
38
Total
Micro
Small
Medium
Metro
Non-metro
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Previous involvement in other businesses
2%2%
11%
43%42%
10 or more6-94-52-31 only
The number of businesses previously involved in on a senior/decision-making level
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Previous involvement in other businesses that have failed?
84%
5%
8%
2%
2%
No
Yes, after less than 1 year
Yes, after 1-5 years
Yes, after 5-10 years
Yes, after more than 10 years
If that business failed(previously involved in more than one business)
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Competition.
Small, Queensland
Director of the company
taking money out of business
and not replacing.
Medium, Melbourne
Disinterest of bankers.
Micro, WA
Economic downturn.
Medium, Hobart
Foreign imports.
Micro, Melbourne
Cyclone/fruit fly
Small, Queensland
Government contracts that
were tendered for not being
renewed.
Medium, Sydney
GOVERNMENT tariff
changes.
Micro, Brisbane
Increased government
charges and taxes.
Micro, Melbourne
Inflation.
Micro, WA
It went bankrupt and we lost
all of our money.
Medium, other NSW
Lack of customers.
Medium, Darwin
Lack of trade.
Micro, NSW
Over extended in technology.
Micro, Queensland
Poor management.
Micro, Canberra
Slow economy.
Medium, Perth
We did not anticipate market
change quick enough and
faced demand dropped too
quickly.
Micro, NSW
We moved out of the city area
and postal rates were too
high.
Micro, Queensland
Withdrawal of vital contracts,
product not sufficiently
developed.
Small, Sydney
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Opportunities and Observations
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Risk Management
34%
21%
34%
56%
36%
31%
13%
11%
14%
17%
14%
12%
53%
69%
52%
26%
50%
57%
Total
Micro
Small
Medium
Metro
Non-metr
o
Yes I’m not sure No
38%
34%
23%
21%
14%
14%
13%
13%
12%
11%
9%
8%
8%
7%
7%
6%
5%
10%
0% 10% 20% 30% 40% 50%
Competitors
Economic volatility
Reputation
Lack of stable, long-term…
Information technology…
Bad debt
Employee resignation
Natural disasters
Having a successor for the…
Employee injury
Premise leasing…
Lack of supplier choice
Banking / financier…
Security of document storage
Relationships with creditors
Continuity of finance…
Under insurance
Another risk
Do you have a formal Risk Management process? The top business risks for SMEs
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Extent to which each area of the organisation is challenging and time consuming
48%
35%
23%
21%
18%
17%
16%
51%
22%
14%
26%
21%
19%
8%
The active daily management of the business
Accounting
Marketing/PR
Bookkeeping
Administration
IT support
Human resources
Most Challenging
Most time consuming
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Describing technology use in the organisation
13%
40%
10%
17%
20%
We are very tech savvy and we proactively look for new andinnovative technology to apply to our business practices
We keep abreast of new technologies relevant to us, but it’s not a core focus of our growth
We want to integrate new techonologies into our business, but don’t have the resources to do so
When we need a new technology solution, we will researchand adopt
We don’t take much intereset in new technology and wouldn’t describe ourselves as innovative
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Strategies for funding retirement
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Strategies for funding retirement
57% 43%
Has a strategy in place to fund retirement
Yes No
48%52%
Confident in ability to afford their desired lifestyle after retirement(all respondents, n=328)
Yes No
38%
35%
28%
25%
21%
19%
13%
11%
10%
3%
9%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Rely on my savings
Use income from rent or otherinvestment dividends
Use my age pension
Sell my current house and moveinto a smaller one (i.e.,…
Sell my business
Sell my investments
Buy annuities (lifetime or fixed
Partially sell my business (e.g.find an equity partner)
Use an inheritance
Sell my house and rent instead
Other
Type of strategy for funding retirement
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Level of awareness of the proposed changes to Australia’s superannuation system in the 2016-17 Federal Budget
9%
8%
8%
11%
12%
6%
41%
38%
41%
45%
42%
39%
33%
39%
30%
25%
30%
37%
17%
15%
21%
19%
16%
19%
Total
Micro
Small
Medium
Metro
Non-metro
I have been following this issue closely and know a lot about the proposed changes
I am aware that changes are being discussed, and have a rough idea of what they are
I have heard that changes are being discussed, but I don’t know much about what they are
I didn’t know that there were any proposed changes
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Opinion of the proposed superannuation changes - overall
5%
3%
5%
3%
11%
13%
9%
9%
15%
13%
10%
13%
11%
19%
9%
10%
47%
40%
56%
55%
11%
12%
10%
10%
Introducing a $500,000 lifetime cap for non-concessionalcontributions
Lowering the superannuation concessional contributionscap to $25,000 per annum
Requiring those with combined incomes and superannuationcontributions greater than $250,000 to pay 30 per cent tax on
their concessional contributions, up from 15 per cent
Introducing a $1.6 million superannuation transfer balancecap on the total amount of superannuation that an individual
can transfer into retirement phase accounts
Extreme impact on me High impact on me Moderate impact on me
Some impact on me No impact on me I'm not sure
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Has implemented The Australian Tax Office’s SuperStream system
32%
31%
36%
29%
34%
30%
26%
17%
29%
43%
23%
29%
42%
52%
36%
28%
43%
41%
Total
Micro
Small
Medium
Metro
Non-metro
Yes I'm not sure No
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The impact of implementing SuperStream on business - overall
26%
10%
2%
38%
25%
Savings in time spent on superannuation
Savings in resources allocated to administeringsuperannuation
Other impacts
No impacts
Too soon to tell
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SMSF use
25%
75%
Has an SMSF
Yes No
67%
34%
7%
1%
2%
I manage it myself
Financial adviser
Family member
Friend
Someone else
The person who manages their SMSF
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Working with our clients on their business
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Case study
• ‘Client A’ is a service based company
• Operating in Perth for 10 years
• And they have been a Taxation & Business services client for 10 years
• The challenge: Falling profits
• Our solution: Develop a budget and make a plan based on the figures
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Get to know your business
By understanding the ‘financial story’ of your business:
• Make informed strategies to improve your business and
• Review the impact that changes to key drivers have on your profit, cash flow and the value of your business.
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Profitability KPI’s
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Where did my cash go?
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What is my business worth?
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Why is a 3-way forecast needed?
• Don’t drive your business blindfolded
• Easier to gain funding from a lending institution
• Helps in working out what needs to be done to achieve desired results
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3-way forecasting
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KPI Dashboard
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KPI Dashboard
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Bentleys Mentoring
• Understand your cash flow
• Get control of your numbers
• Make informed decisions
• Design a better future for your business
• Inspire, guide and give advice
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QUESTIONS?