There are more than 2.2 million small businesses across Australia. And with the federal election looming, the shape of their future is set to be decided in a matter of days. Here at Xero, we’re asking you to suspend disbelief, just for a moment, and imagine that you were the one leading the nation. What would you do to support the small business community and grow our economy? In this series, we’re asking exactly that. Exploring what matters most to the country’s small businesses, we questioned a diverse cross-section of owners and the Xero partners who support them on what they’d do in the hot seat.
But first, a little background on our new “prime minister”: Don Grgic is the founder of Business Boost Centre, a small business support service run out of Canberra. Awarded Xero’s Bookkeeper of the Year (this is just one of the services Don offers), he is endlessly passionate about helping people not only grow, but flourish. In Don’s own words: “I help small businesses survive and thrive.”
1. Late payments and extended payment terms can have a catastrophic effect on small business livelihood. As PM, what would you do to keep this in check?
If it impacts cash flow; it impacts everyone’s livelihood. As PM, I’d set about investigating how technology can help resolve late payment. For instance, we could make it mandatory for suppliers to sign up to payment gateways. That way, when an invoice is due, money will be taken out of their account automatically. Or, we could make it easier for small businesses to take legal action or garnishee accounts like the Tax Office does.
At the moment, small businesses are being treated like a bank with free finance. This needs to change – we need adequate working capital just like everyone else.
2. From telephone bills to internet connection and securing labour – the input costs of starting a small business add up. What would your government do to lessen the burden?
You can always throw money at something, but what we need here is an innovative solution. As PM, I’d propose a small business startup hub. So when people are beginning their journey, they’d gain subsidised working space and access to facilities to help develop their business – all funded by the government. I’d make sure this startup hub would provide small businesses with education and training to teach them about cash flow, working capital, how to run a business effectively, and introduce them to technology.
3. Small businesses found gaining access to all-important funding increasingly tricky as 2018 came to a close. Tell us Mr PM, where do you stand on this issue?
Firstly, I’d remove government charges around loans for small businesses (like stamp duties on transactions). I’d also make it much easier for small businesses to get into equity funding. That means changing up the rules around selling shares in your business so that it’s nice and simple, rather than having to list on a public exchange. Ultimately, if we link back to late payments and have a mandated gateway for payment services, that would improve cash flow so small businesses wouldn’t need as much funding in the first place.
4. Helping small businesses unlock the potential of technology is a key part of our mission at Xero. As PM, what would you do to support them in embracing the latest advancements and staying competitive in evolving industries?
Luckily, this prime minister is a bit of a tech geek! The potential for technology to change the face of small business is huge, especially when it comes to time savings and increased productivity. Technology can help facilitate faster payments which in turn reduces your costs, allows better cash flow, and means less reliance on short term funding. And forget about writing up an invoice and hoping to get paid! Now you can use technology like Xero to generate invoices on the spot, complete with a handy ‘pay now’ button. The key to all of this is education.
5. It’s your first day in office – what would your number one priority be?
Morning: I’d double down on getting rid of the black economy – because all small businesses should be on a level playing field. Then, I’d use the resulting taxes that are raised to boost resources for small business.
Afternoon: I’d tune up the engine. What do I mean by that? Well, we all know that small business is the “engine room” of the economy. It creates most of our jobs, and pays most of our taxes. We need to educate and improve this engine room. First, I’d set up programs for training. Then, I’d fuel the tank: providing resources for startups, offering opportunities for employment, training skilled staff, facilitating the use of technology, and creating support networks. Then, I’d put the engine into gear and my foot on the accelerator!