1. Red tape and regulations February 2013
2. Business expectations for 2013
3. Government procurement processes July 2012
4. Carbon tax May 2012
5. Extended retail trading hours March 2012
6. Business expectations for 2012
7. Dealing with major unexpected events April 2011
8. Dispute resolution December 2010
9. Social media for business August 2010
10. Federal government's paid parental leave scheme July 2010

Business expectations for 2013

At the end of each year, the SBDC provides an opportunity for members of the network to provide their opinion on a range of issues that may impact on their business in the coming year. This survey has been conducted annually since 2004.

The annual Small Business Expectations Survey for 2013 was released to the Ready Response Network on 24 January 2013. A total of 45 responses were received and the results, including comparisons with 2011 and 2012 where appropriate, are presented below.

The survey also provided an opportunity for respondents to make additional comments on their business outlook for the coming year. Some of these comments indicated:

• “Recruiting and retaining staff costs our [regional] business considerably more than an equivalent business in Perth.”
• “Serious consideration should be given to reducing the amount of red tape.”
• “A major impact on all business will be the increased gas and electricity cost through poor management by the utilities and the carbon tax.”
• “The cost of power hurts.”
• “As consumers are being stringent with their money it is difficult to attract new customers and expect substantial growth.”

Impact of the economy on business over the coming year

Positive business sentiment of the economy increased from 37% in 2012 to 40% in 2013, while negative opinions decreased from 42% to 31% in the corresponding period. A further 29% felt the economy would have no impact on their business over the coming year. This is up 8% from the previous year.

 

 

 

In general, most respondents indicated a cautious outlook for 2013 evidenced by the following results:

• Economy: 31% of respondents indicated that the economy would have a negative impact on their business in 2013; this is down 11% on the previous year (42%).
• Sales / Revenue: 56% of respondents indicated that they expect sales to increase in 2013; this is down 2 per cent on the previous year (58%).
• Selling prices: 51% of respondents expect selling prices to increase in 2013; this is up from 47 per cent the previous year.
• Profitability: 42% of respondents expect profitability to increase in 2013; this is unchanged from the previous year.
• Ability to find suitable staff: 40 per cent of respondents indicated that they expect finding suitable staff to become more challenging in 2013; this is up from 38 per cent the previous year.

Top challenges for business over the coming year

The top challenges for small businesses in 2013 are expected to be:

• Increasing costs – 47% (21 businesses)
• Achieving / managing growth – 42% (19 businesses)
• Attracting new customers – 36% (16 businesses)
• Wage costs – 29% (13 businesses)
• Recruiting or Retaining staff – 27% (12 businesses)
• Access to finance – 18% (8 businesses)

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Government procurement process

July 2012

In July 2012, the SBDC sought opinions from the Ready Response Network members on their experiences with government procurement processes. The SBDC was interested in ascertaining the level of awareness of the eight government supply policies, and whether they believed that the current system was fair and equitable for small business operators.

A total of 36 people responded to the survey, with 17 of these indicating that they had quoted or tendered for a State government contract in the past.  Of these respondents, 41% were successful in being awarded the contract they applied for.

 

The SBDC has heard anecdotally from a number of small businesses that the feedback provided by procurement officers after an unsuccessful quote or tender is not adequate and does not allow them to learn where they could improve their bid next time. 

To gain more intelligence around this area of procurement, survey respondents that were unsuccessful in winning a contract were asked whether government procurement officers provided them with sufficient feedback to explain why their business was not awarded the contract. 20 per cent of these respondents said that they were provided with sufficient feedback, while 40 per cent said that they were not provided with sufficient feedback. 40 per cent were unsure.

The respondents that had never applied for a government contract were asked whether anything had prevented them from quoting or tendering for these contracts.  The SBDC was interested in hearing what barriers existed for small businesses when considering applying for government contracts. Five respondents indicated that there was a particular reason for them not applying for a contract, with one respondent stating that government contracts are "too complex".

This particular comment may go some way in explaining why 63 per cent of respondents have never applied to be on a State government Common Use Arrangement (CUA). Only 27 per cent of respondents had applied to be on a CUA and ten per cent were unsure.

The SBDC was then interesting in hearing the extent of understanding of all eight State Supply Commission supply policies. Respondents were asked if they were aware of all these policies, of which 47 per cent indicated that they were aware of them. 40 per cent of respondents were not aware of all the supply policies and 13 per cent were not sure.

Respondents were then asked whether they believed the government quoting and tendering process could be improved or streamlined in any way. 47 per cent of respondents indicated that it processes could be improved, ten per cent believed they could not be improved and 43 per cent were not sure.

A number of respondents commented on how these processes could be improved or streamlined. These comments are included below:

• "Too many forms - put me off straight away"

• "An advantage of 10% leeway should be given to a local WA company just so local business is supported. Larger overseas operatives can easily cut local business in half and finish up dictating terms so in the end the Government gets a lousy deal"

• "There seems to be an approach that one size fits all and even though there are questions associated with being a small business the overall process seems to be developed assuming that a business has a person who can spend days responding to a [Common Use Arrangement]"

• "Employ more professional, qualified and experienced people in these areas of these government departments and cut out corruption within some government departments also"

• "Provide more flexibility. At present, the accountability and compliance cost to taxpayers does not outweigh the benefit to more flexible procurement arrangements. Private sector works this way; why can't government?"

• "The amount of paper work and time to complete a quote for government contracts does not equate to the value of the contract"

Finally, all respondents were asked for any other comments they had about the quoting and tendering process for WA government contracts or the decision making process by which contracts were awarded. A selection of these comments are outlined below:

• "The system has to be made simpler for the smaller operative to submit tenders. The cost of submitting tenders is expensive, hence many small businesses don't bother. Instead of having 5000 lines to tender on perhaps consideration could be given to calling for prices on a sample of the major lines used, say 1000?"

• "I have noticed that many government personnel do not know the government policies and we are often approached to quote on work to be done and we have to inform the person that a [Common Use Arrangement] exists or that the value of the work required goes beyond a verbal or written quote and may have to go to [Request for Quote] or tender. Values for quotations should also be reviewed [as] values inclusive of GST are not realistic."

• "Too much emphasis seems to be with dealing with a single supplier, not value for money and dealing local where possible. Zones of one price fits all in regional areas does not work. If the local administrators take the time to get quotes locally it's amazing how much work does stay in the region. But the lazy [administrators] just pick up a catalogue or go online and order without leaving their desk or making any effort whatsoever. It needs to be part of the key performance indicators and maybe even a part of basic training on how to source a product or service locally in a regional area."

• "The use of middle men to manage process perverts it as they are the ones who get control over who is given a contract and they are not impartial [-] they give the contracts to their mates."

• "The government's attitude is 'value for money', but in a majority of cases the winning bid is being performed by parts of the industry that is not qualified, or has no overheads, i.e. brokers."

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Carbon tax

May 2012

During May 2012, the SBDC's Ready Response Network obtained small business opinions about their preparedness for the introduction of the carbon tax on 1 July 2012.

A total of 62 people responded to the survey, with almost half (26) of all respondents indicating that they are not prepared for the introduction of the carbon tax. Only 13 respondents indicated that they are prepared for the tax and any flow on effects to their business. The remaining 23 respondents are unsure of their preparedness.

When asked if the carbon tax would have a positive or negative impact on their business, 55% stated that they believed it would have a negative impact, 10% believed that their business would be positively impacted, 19% believed that there would be little or no impact and 16% were not sure how their business would be impacted.

Of concern is that of the 34 respondents who indicated that they believed their business would be negatively impacted by the carbon tax, only 5 respondents indicated that their business was prepared for its introduction.

Although the carbon tax is targeted at the top 500 polluters in Australia, small businesses are likely to be impacted indirectly through their dealings with bigger businesses (e.g. higher costs for goods purchasing and higher input costs such as electricity prices) or indeed by their customers placing pressure on them to disclose their carbon footprint or "green credentials". In line with this, respondents were asked to indicate if their business was prepared for the possibility that from 1 July 2012 their customers and suppliers may require that their business reports on carbon emission levels and/or how their business is reducing their carbon footprint. An overwhelming 68% of respondents indicated that they were not prepared for this possibility. Only 18% indicated that their business was prepared for this and 15% indicated they were not sure if their business was prepared.

 

As the carbon tax is a Federal Government initiative, the SBDC was interested in hearing whether small business operators had been provided with sufficient practical information to help them understand the potential impacts of the tax on their business.

Overwhelmingly, 85.5% of respondents indicated that not enough practical information had been made available by the Federal Government, with only 6.5% of respondents indicating that there was enough information available. The remaining 8% of respondents were unsure.

Following on from this, respondents were also asked if their business needed assistance in understanding or preparing for the carbon tax. More than half of respondents (56%) indicated that they were unsure if they needed assistance, whilst 19% indicated they needed assistance. Only one in four respondents indicated that they did not need any assistance in understanding or preparing for the tax

Finally, respondents were asked for their general views on the impact of the carbon tax on their business. A selection of comments is provided below:

• "A necessary government initiative. Being blown out of all proportion by the media..."
• "About time, it's time we realised we're exploiting the planet and have to stop doing this!"
• "The carbon tax is necessary as we need to reduce carbon emissions so future generations have a healthy planet. If I have to make certain changes I will as it's for a healthier future. We need to opt for greener alternatives and I think only the really big corporations who have a big carbon foot print will be affected. It has to be brought in at some stage so no time like the present."
• "We are looking at the possibility of introducing a carbon offset program into the business. We were planning to do this whether or not the carbon tax is to be introduced. I am unsure of how my business will be affected indirectly and which one of my clients will be affected directly or indirectly too. I believe it is necessary, though I do not understand how to account for it within my budget."
• "This carbon tax is another tax and will adversely affect all business, particularly SMEs across Australia as they struggle to remain competitive in a world market, just another cost to pass on to the consumer, who will likely go on-line and we lose another sale to an overseas supplier."
• "The impact will be negative and many consultants will make millions trading in a gas of no consequence. It would be preferable to require polluters to fix the source or vehicles to be taxed on miles travelled or lack of service history."
• "Poor strategy, poor consultation of small business, poor level of practical info being advertised by the govt, poor execution."
• "I believe the carbon tax is the wrong approach - I think they could have encouraged less carbon emissions and a more sustainable society by giving exemptions from existing taxes for sustainable goods and services. The enterprise I am establishing reduces transport so should benefit from any carbon initiative."
• "As we are a retail outlet we expect that we may have supplier price rises that will have to be passed on to our customers."
• "I have not seen any attempt by the Federal Government to educate small business by either pamphlets, advertising, information sessions - nothing. Have I had my head buried in the sand?"
• "As far as I can see the only impact will be higher running costs with no tax breaks or incentives to small business. This will cost jobs."

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Extended retail trading hours

August 2010

During March 2012, the SBDC's Ready Response Network obtained small business opinions about the Government's plan to extend retail trading hours to allow Sunday trading in the Perth metropolitan area.

A total of 108 people responded to the survey, with 31 indicating they operate a retail shop in the Perth metropolitan area.

Of these 31 respondents operating a retail shop in the Perth metropolitan area, 23% believe that the introduction of Sunday trading will positively impact their business, 43% believe that it will negatively impact their business and 23% indicated that it will have no impact on their business.

The respondents that indicated that their business would be positively impacted by Sunday trading were asked to identify the aspects of their business that will be better off under the extended trading regime.  The three main reasons (with multiple options allowed) were:

• Increased customer base (83%);
• Increased profitability (67%); and
• Improved work/life balance (50%).

 

For those respondents that indicated that their business would be negatively impacted by Sunday trading, the three main reasons (with multiple options allowed) that their business will be worse off under the extended trading regime were:

• Decreased profitability (92%);
• Decreased customer base (75%); and
• Decreased ability to compete (58%).

 

In order to adjust to the extended trading hours, respondents indicated that they would work longer hours or, equally, choose to simply not open on Sundays (33%). 

Additionally, respondents would also reduce staff numbers and rotate staff shifts in order to adjust to the proposed regime.

In relation to those businesses that indicated that they are currently located in a Special Trading Precinct, 50% claimed extended Sunday trading across the Perth metropolitan area would negatively impact their business, with 25% of respondents stating that it would be beneficial to their business or have no impact at all respectively.

Finally, all 108 respondents were asked for their general comments on how the plans to introduce Sunday trading for all retail shops in the Perth metropolitan area would impact on their business.  Responses ranged from being supportive of the proposal to being strongly against it.  A selection of respondent comments is outlined in the box below.

 

"I believe that Sunday Trading will activate otherwise quiet trading precincts."

 

"Not much impact on my business, but will be more convenient for personal or family, as we have been working from Monday to Friday, and had rarely got time to shop. Sunday trading will be very welcoming."

 

"I think it's fantastic as it will bring Perth in line with the rest of the world. I operate in consulting, particularly export and clients and tourists visiting our wonderful city need to see us open not closed."

 

"It would make life easier for me. I run a wedding decor business and often need to hire or return things on a Sunday. But currently have to wait until Monday."

 

"We have three stores where two of them can already open on a Sunday but we already choose not to open. We tried for a long time Sunday Trading and it was not worth our while. We will not be opening on Sundays in any of our stores regardless of the new proposed trading hours."

 

"On the whole I think Perth is its own market. We live more of a recreational lifestyle, not a Melbourne retail lifestyle. With all shops open I think it is going to be too hard for shops to pay more rent without an increase in sales. Shops are going to be ghostlike, virtually empty on Sundays and diluted during the week.
If people want to shop it is not hard to find a special trading precinct. I think it is going to be hard for small business and good for the large stores."

 

"We will not participate as staffing costs would not make it worthwhile."

 

"We have already had two months experience of it. Absolute disaster for us. Taking way down. Wageline staffing costs unfeasible. Already forced to change trading to close on Sundays."

 

"I own a small IGA supermarket next to Joondalup lakeside mall which already trades Sunday. I believe my business will drop by about 20% due to a Coles supermarket nearby which currently does not open on Sundays. The effect of this will force me to reduce my staff numbers and this drop in business will impact on all my suppliers, many of these suppliers operate their own business also and won't benefit from Sunday trading as they generally are not supported by Coles and Woolworths. These small suppliers also cover other services for me e.g. cleaning, security. So I believe that Sunday trading will have a negative impact to all local small business who supply retailers stock or services. I believe job losses will be more that those created by new Sunday trading business."

 

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Business expectations for 2012

The Ready Response Network is a group of small business operators who have indicated an interest to engage in regular surveys on small business issues.  At the end of each year the SBDC provides an opportunity for members of the network to provide their opinion on a range of issues that may impact on their business in the coming year.  This survey has been conducted annually since 2004.

The annual Small Business Expectations Survey for 2012 was released to the Ready Response Network on 12 December 2011 and closed on 13 January 2012.  A total of 125 responses were received and the results, including comparisons with 2010 and 2011 where appropriate, are presented below.  

 

 

In general, most respondents indicated a cautious outlook for 2012 evidenced by the following results:

• Economy: 42 per cent (53 businesses) of respondents indicated that the economy would have a negative impact on their business in 2012; this is up from 30 per cent the previous year.
• Sales / Revenue: 58 per cent (72 businesses) of respondents indicated that they expect sales to increase in 2012; this is down from 70 per cent the previous year.
• Selling prices: 47 per cent (59 businesses) of respondents expect selling prices to increase in 2012; this is down from 52 per cent the previous year.
• Profitability: 42 per cent (52 businesses) of respondents expect profitability to increase in 2012; this is down from 54 per cent the previous year.
• Ability to find suitable staff: 38 per cent (47 businesses) of respondents indicated that they expect finding suitable staff to become more challenging in 2012; this is down from 49 per cent the previous year.
• The top challenges for small businesses in 2012 are expected to be:
  • Attracting new customers - 49 per cent (61 businesses)
  • Increasing costs - 38 per cent (48 businesses)
  • Cash flow management - 30 per cent (37 businesses)
  • Achieving / managing growth - 27 per cent (34 businesses)
  • Red tape - 27 per cent (34 businesses)

The survey also provides an opportunity for respondents to make additional comments on their business outlook for the coming year.  Some of these comments indicated:

• Contemplation of business closure to gain full time employment.
• Reducing staff levels.
• Difficulties in planning for the future due to economic instability.
• Trade may be solid but profit margins are small and costs are rising.

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Dealing with major unexpected events

April 2011

During April 2011, the SBDC’s Ready Response Network obtained small business opinions about dealing with major unexpected events, such as natural disasters, critical technical breakdowns and pandemics.

More than two-thirds (67%) of the respondents said they were not prepared or unsure if they were prepared for a major unexpected event. However, almost three-quarters (74%) agreed that planning for major unexpected events is either somewhat important or extremely important.

When asked how much time per year small businesses spend on preparing to deal with a major unexpected event, over half (56%) of the poll participants said less than 1 day per year, and only 7% said more than 7 days per year.

The types of activities that respondents were most likely to be involved in, in preparation for a major unexpected event included:

• Putting in place and/or testing computer systems and data back-up procedures (25% of responses);
• Checking the level and details of insurance policies (24% of responses);
• Installing and/or testing fire protection equipment (13% of responses); and
• Identifying an alternative/backup power source (12% of responses).

Almost a third (30%) of respondents revealed that their business had experienced a major unexpected event in the past 5 years, with more than a half of these businesses (56%) saying their business was interrupted between 1 and 7 days, and a quarter (25%) saying their business was interrupted for more than 7 days. When asked how much damage was caused, 31% said minor damage and 19% said major damage.

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Dispute resolution

December 2010

In December 2010, the SBDC’s Ready Response Network opinion poll focused on small business attitudes and experiences relating to the resolution of business-to-business disputes.

More than a third of the respondents (36%) said they had been involved in a dispute in the last five years. Of these:

• 48% said the dispute was with another business;
• 20% said the dispute was with a landlord / real estate agent;
• 16% said the dispute was with a franchisor or franchisee; and
• 16% said the dispute was with other parties (such as customers and government departments).

The majority of these respondents (68%) initiated the dispute themselves, with 60% obtaining further advice or information in relation to dealing with the dispute.  Less than a third (28%) resolved their dispute by communicating directly with the other party while 8% took no further action.

When asked where advice or information was obtained, 41% indicated from legal practitioners and 15% from business or industry associations. Seven per cent of respondents that had been involved in a dispute obtained advice from the SBDC or a Small Business Centre.

Of those involved in a dispute, 40% attempted alternative dispute resolution (ADR), though 60% would consider using ADR services in the future.

Respondents who had not been involved in a dispute in the last five years, or who did not obtain any advice previously if they had been party to a dispute, were asked where they would most likely obtain advice or further information, if they did become involved in a business dispute in the future. Respondents indicated:

• legal practitioners (31%);
• the SBDC or Small Business Centres (17%);
• the Australian Competition and Consumer Commission (10%);
• business or industry associations (9%);
• accountants (9%);
• the Department of Commerce (6%);
• business advisors (6%); and
• other (14%).

Of the 64% of respondents who had not been involved in dispute in the last five years, 59% said they would consider using ADR services in the future should they become involved in a dispute. Almost a third (30%) was not sure and only 7% said they would not attempt ADR in future.

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Social media for business

August 2010

In August 2010 the Ready Response Network gauged small business operators’ opinions about social media and whether they were using social media as a business tool.

While 82% of respondents said they had a business website, only 35% were using social media as a business tool. For those using social media, Facebook was the most popular social media tool with 89% of respondents indicating they used it. LinkedIn was being used by 68% of respondents, while and 52% said they used Twitter for business purposes.

Respondents were asked what their main business purpose for using social media was and the three main reasons given were:

• increasing brand awareness (34%);
• networking (25%); and
• driving traffic to their business website (20%).

Half of all respondents who use social media for business purposes indicated they accessed it 2 - 6 times per week. A further 23% used it less than once a week. No one indicated (confessed) that they were using social media for more than two hours daily!

Overall, 50% of respondents using social media for their business believed it had resulted in tangible benefits for their business; while 41% were unsure; and the remaining 9% said they had not seen any tangible benefits. Some of the benefits outlined by respondents included:

• increased sales;
• increased enquiries; and
• an increase in new contacts.

Of those respondents who said they were not currently using social media for their business, 29% said that primarily this was because they did not believe it to be relevant to their business, 24% said they were unfamiliar with how social media works, and 17% said they did not see the benefits of using it.

Finally, when respondents were asked if they would use social media in the future, 27% indicated they would, 44% were unsure and 29% said no.

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Federal government's paid parental leave scheme

July 2010

In July 2010 the Ready Response Network gauged small business opinions about the Federal Government’s Paid Parental Leave scheme (PPL scheme), commencing on 1 January 2011.

Almost three-quarters of respondents described their level of knowledge about the PPL scheme as “basic”, while a further 24% described it as “intermediate”.

When asked how easily business systems would cope with meeting new employer obligations under the PPL scheme, approximately a third (34%) of respondents said a significant amount of effort will be required to change systems in order to comply. A further 28% said a moderate amount of effort will be required, while 23% were unsure and 15% said their systems would cope easily.

Opinions on whether employees are more likely to stay connected to a business as a result of businesses forwarding the PPL payments were also divided:

• 30% said they believed employees are more likely to return to their business as a result of these arrangements;
• 34% said they did not believe employees were more likely to return to their business as a result of these arrangements; and
• 36% said they were unsure.

Overall, over 40% of respondents think the impact of the PPL scheme on their small businesses will be negative. This compares with 11%, barely one in ten respondents, saying the overall impact will be positive, 25% saying the scheme will have no impact and 23% being unsure of its impact on their business.

For more information about the Federal Government’s Paid Parental Leave scheme, including new employer obligations, visit the Family Assistance Office

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To find out more about the network

If you would like to know more about the Ready Response Network, please contact:

Policy, Planning and Stakeholder Relations
Small Business Development Corporation
Email readyresponse@smallbusiness.wa.gov.au
Telephone 13 12 49

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