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Snapshots from the Small Business Insights panel tour

This month, we kicked off the Xero Small Business Insights panel tour for 2018. We headed to Adelaide, Melbourne and Newcastle where we unpacked the key challenges and opportunities in each region.

Each panel was made up of small business leaders from that location, including a local small business owner, accountant, local government representative, and renowned demographer Bernard Salt (Melbourne/Newcastle).

The panel looked at the Small Business Insights data on payments, cash flow and employment from the last year, with the aim of telling the story behind the numbers.

Here’s a snapshot of what they had to say.

 

Cash flow in Adelaide

54.85% of Adelaide businesses were cash flow positive in November 2017, on par with the national average which stands at 53.9%.

Lyn Hay, CEO of Adelaide Business Hub: “We conducted a survey of 1000 small business from our client base last year and cash flow was their top concern. We learned that clients depend heavily on email for debt collection but getting on the phone early can make a big difference. That’s especially important when a business has all its eggs in one or two baskets and maintaining client relationships is critical.”

Kerri Reynolds, Partner at KPMG: “Small business owners are passionate about their product or service, so the bandwidth for chasing payments is not always high on their priority list – they’re busy chasing the dream instead. We encourage small business owners to initiate automated processes that effectively manage cash flow for them, and can help them get more comfortable with the mindset of asking for money.”

Martin Pike, Director of Verve Group: “As a tax, accounting, financial planning and business advisory firm, we see the pain of poor cash flow first-hand. There are three key things that businesses both large and small fail to realise, Cash flow is a function of economic growth. If we can improve it, businesses can afford to grow. But if we can’t implement fast payment practices in South Australia, we only hinder our own economy.

John Chapman, South Australia Small Business Commissioner: “I still come across quite sizable retail businesses that, for a range of reasons, need help with their cash flow. I say we need to understand the sales flow. If businesses were in the digital space with a solid accounting system behind them, they would know so much more about their business, cash flow, and critical touchpoints. Our job should be about getting more businesses to that level.”

Late payments in Newcastle

The invoices of Newcastle and Hunter businesses (invoices with 30-day payment terms) were paid on average at 37.16 days compared to the national average of 35.62 days over the last year (Dec 2016–Nov 2017).

Ben Dewson, Founder of Holistic Security: “It’s essential to make sure you’re going to get paid, no matter what. Don’t give anyone a reason to question the invoice. Before an invoice gets sent, we always cross-check it to ensure our bill matches what they sent us.

Steph Hinds, Head of Growthwise: “Newcastle still has a lot of big mining- and construction-related businesses. The large guys tend to be terribly bad payers  – they often work on 60 to 90 days payment terms. This has a massive impact on community. If they don’t get paid, it affects their suppliers, which creates a whole ripple effect.”

Bernard Salt, Managing Director of the Demographics Group: “Why can’t big business pay on time? Don’t they have computers? Their payment systems are really slow. The bigger the business, the better their capacity to pay on time. Late payments is major issue as it affects the productivity and fluidity of the economy. And there’s such a easy fix!

Employment in Melbourne

In Melbourne, there was a 9.27% increase in the number of small business employees year-on-year (November 2016-2017) compared to the national average of 7.36%.

Judy O’Connell, Victorian Small Business Commissioner: “I think regional locations have the challenge of getting skilled staff to work in regions, but I agree that the technology is available to help.There’s no reason you can’t have an office in Bendigo and service the CBD or surrounding areas.”

 Simone Clark, Founder of Butterbing: “I created three roles at the start of the year. But it’s really quite difficult to find the right people. I increasingly need to adjust what I can offer to attract the right talent – say, 20-hour weeks or flexible start times. You need to work hard to retain talent; it’s a two-way street.”

Jason Robinson, Director of RBK Advisor: “ I added around 15 people to his team last year. We are really conscious of the incredible culture we have created, but on the flip side, nurturing that culture requires constant flexibility – and that effort only multiplies as you grow.”

This is just a snippet of the data-driven conversations covered in our Xero Small Business Insights tour. To learn more, subscribe to get insights in your inbox at Xero Small Business Insights.

The post Snapshots from the Small Business Insights panel tour appeared first on Xero Blog.


Source: Xero Blog

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