Business owners are struggling. As a corporate, are you helping?

SMALL BUSINESSES

Did you know – Small Business in Australia employs almost 7 million Australians and last year generated $856 billion in revenue? Yet it is estimated up to 60% of start ups fail within the first 3 years. So as someone said to me last week in training, “so starting up a business is like gambling?” And I said ‘yes, just like marriage!’ None of us walk down the aisle going ‘Yes, I will be in the 50% that divorce’ and none of us think ‘I will be in the 50%+ of businesses that fail’….so we are optimistic if nothing else!

Having started eMatrix 12 years ago from the Lounge Room floor with no clients and no training developed yet, I can share with you the horror of taxes piling up that you didn’t understand, the loneliness of trying to do what you love, but burdened by the administration and sleepless nights around how to page wages, whilst keeping those around you confident that things are OK. Tax structures, legal contracts, paying yourself a wage and super (if you have any money) plus working out the differences between turnover, profit and cash flow – all comes piling on to you pretty quickly. This is all without doing whatever it is you are technically good at, which is why you went into business, be it making the cakes, cutting hair or in my case, training.

Talk about the Peter Principle in the corporate world where you are promoted to your level of incompetence – running a small business is a leap of faith into a complete world of incompetence, winging it until you learn.

So, if I was going to script a reality TV show on running a small business, I’d break the series into the following:

DUMB AND DUMBER – I DIDN’T KNOW I WAS THAT DUMB

• Paying GST and doing your BAS doesn’t mean you have paid your taxes!
• Paying your Income Tax still doesn’t mean you’ve paid all your taxes, because PAYG then comes knocking at the door!
• When people say ‘ah but you can claim it’ still means you had to spend money! Buying a $5000 tool doesn’t mean you pay $5000 less tax.
• Thinking cash flow and profit are the same thing. My friend and I were sharing one day and I said, ‘I made money this year, but often had no cashflow’ and he said ‘I had great cashflow and thought I was rich! I made no profit!’  We laughed at each other’s woes - it’s a concept in psychology called downward comparison that makes you feel better about yourself.
• Agreeing with a subcontractor what you will pay does not mean 2 years later you won’t get a bill from the ATO for super you didn’t know about
•  When someone says ‘you should get a bookkeeper’ and you say ‘what’s that?’
• Trying to write your own legal contract to save legal fees and your client calls to say ‘it doesn’t make sense, it’s legally incorrect and has spelling mistakes’!!

THE COMEDY CHANNEL – THAT’S FUNNY!

• When the Bank ads on TV say ‘we are here to help small business’ – that should be on the comedy channel.
• When people say ‘I want to run a small business because I can choose my own hours and be really flexible’ add that too, especially when you are invoicing customers on a Saturday night like a loser!
•  When they say you are so lucky, you must be so rich because you run a business – just add the canned laughter!
• Thinking there are tricks to minimising tax – that’s a Stand-up!

JACKASS – THE RISK

• When the number 1 career choice for school leavers is ‘I want to run my own business’ because all they see is those 1 in 7 billion people who make it overnight, that’s a worry.
•  With no IT and risk teams, as a small business owner, you are THE most exposed to cyber-security attacks.

JOHN WICK STYLE – THE RAGE

• When your accountant says ‘you should have a separate account for your GST – that way you’re covered’ – that’s when you want to throw an orange over the table at them.
• No-one tells you things! There are no meetings like in the workplace for people to update you on what’s going on in the world and hand it to you – everything you need to find out for yourself. So when you say to your accountant, ‘why didn’t you tell me’?, they will say ‘well, you didn’t ask’.
• When corporates provide you their beautifully drafted contract from Singapore or where-ever, with a standardised ‘Master services agreement’ with compliance requirements from Labour and Human Rights, including Modern Slavery, Diversity and Inclusion, Behaviours, Health and Safety, plus Environment and Sustainability requirements and it costs you $5K in legal fees for your lawyer to tell you not to sign it (after you spent 3 nights googling the bloody words). At least now ChatGPT could whip us up some policies!
• And of course…. your premier. Add that one to your next dinner party discussion (if you can afford one) and see how that one goes!

THE NOTEBOOK – HAVING A GOOD CRY

•  With inflation, declining revenue, supply chain pressures, competing for staff with big business and increasing energy and borrowing costs – it is getting harder and harder and for many. It is time to get the tissues out and have a good cry.

eMatix is fortunate enough to be considered a successful small business story, we work with some of the biggest organisations in Australia that seek our services to train and consult, from Banks to Energy and Water, State and Federal Government. Not only do we get to work with fantastic people, they help us with our brand and refer us into other teams to help grow our business. They call to make sure we get the PO numbers for invoicing, provide ideas for how to improve and will check to see if we have been paid! We know people are passionate about helping small business owners, but it doesn’t always translate. I am a Small Business Survivor and Thriver ready to share!

SO, WHAT CAN YOU DO?

From a credit/collections perspective, we find many people in these roles, don’t understand what it means to run a small business and therefore don’t have empathy or recognise how to be flexible when working with these clients. Because they don’t understand it, they don’t ask any questions that can help, other than trying to lock them into fortnightly payment plans that are doomed to fail -because business owners don’t get paid fortnightly (usually anyway). In interviewing other small business owners in developing our training and asking them ‘if you owed money and called a corporate because you couldn’t pay, what would you be looking for?’ and the most common response:

‘A bit of empathy and some knowledge, so I don’t feel like I am talking to a brick wall’.

So, when you hear collectors saying:

• ‘They are a business owner; they should know how this all works and should have their accounts up to date’
• ‘They should know the difference between accounts receivable and payable – gosh, how do they run a business?’
• ‘They don’t even know how to fill in a credit application properly – how do they even make any money?’
• ‘Why should they get hardship – they own a business?’ (Note: 67% of Small Business Owners are sole traders)

…it is time for eMatrix to come and train! This is definitely one training I am very passionate about and love sharing with staff.  The language, the challenges, and the mindset of small business owners, (and lots about tax), with suggestions for the right approach to take when dealing with someone who can’t pay.

Need some help with understanding Small Business Vulnerabilities?

Book a 2-hour small business awareness session with me.

Jodie Bedoya, Director of eMatrix Training, Australia’s leading Collections & Vulnerability Training Specialists, on 0438 391 500 or jodieb@ematrixtraining.com.au.