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Half of Queensland’s smallest businesses were not profitable even before the cost-of-living crunch hit, sparking calls for urgent, temporary relief to help them keep their doors open.
A prominent business leader is calling for all levels of governments to collaborate with industries to find solutions and provide temporary relief, whether it is in short-term tax and fee concessions, cutting red tap or relaxation of student visa rules.
Meanwhile, a new survey revealed Queenslanders were more likely to delay starting a business than other Australians due to financial concerns, as almost a quarter of the state’s business owners admitted to making costly mistakes early in their endeavours.
Analysis of Australian Taxation Office data shows 49.3 per cent of Queensland’s 200,830 micro businesses, those with an annual turnover of less than $2 million, were not profitable as of the 2020-21 financial year, compared to 43 per cent nationally.
Since then there have been 12 interest rate rises, soaring inflation, and the average electricity prices for a southeast Queensland small business jumped 21.9 per cent of $756 a year on July 1, according to the Australian Energy Regulator.
Phillip Di Bella at the coffee roasters’ commune in Bowen Hills. Picture: Tertius Pickard
Brisbane business leader and Coffee Commune founder Phillip Di Bella said he feared the next generation of small business owners would not exist unless action was taken.
He said governments of all levels came together to aid small business during the Covid-19 crisis, and that similar action and relief was needed as interest rates, inflation, employment and electricity prices combine to form a new dire situation.
“We need all governments to adopt an attitude of consultation and collaboration before they put in legislation and regulation,” Mr Di Bella said.
“If we don’t fix this, we are not going to have business operators.
“Government wants to keep talking, but they don’t have to have all the answers.
“They need to engage with us.”
Mr Di Bella pointed to the recently released Small Business Matters report, released by the Australian Small Business and Family Enterprise Ombudsman, which found that just 8 per cent of small business owners were under 30, less than half the 17 per cent achieved in the mid-1970s.
He said temporary pain relief measures needed to be considered for business in the current environment, suggesting a range of ideas including 12-month payroll tax concessions, an overhaul of fringe benefits tax, easing up on council fees for outdoor dining and relaxing limits on hours worked by people on student visas.
Business Chamber Queensland CEO Heidi Cooper said while families were feeling cost-of-living pressures around the kitchen table, those same pressures were being felt by businesses.
“Businesses are currently facing the combined impact of high operating costs, high labour and insurance costs, high interest rates and reduced consumer spending which mean they’re less optimistic in the state and nation’s economic future,” she said.
Business Chamber Queensland CEO Heidi Cooper
“We’ve been seeing these macroeconomic challenges impact business confidence for the past year.
“Interest rates are impacting businesses both directly and indirectly. Many businesses have their own debts to service while consumer spending is reduced.”
She said those factors, as well as the level of demand and economic activity, were the main constraint to growth being felt by businesses.
“We will continue to advocate on behalf of the state’s business community to ensure their needs are prioritised and they have the support, tools and resources they need today and for the future,” Ms Cooper said.
Meanwhile the Do Better Business survey, conducted by accounting software company Xero, found three-quarters of Australian businesses confessed to needing stronger financial management, and one fifth said they spent all of their personal savings on keeping their business alive.
Dealing with wrong suppliers, working with family and friends and working for free were among the top reported business mistakes, with 23 per cent of Queensland owners revealing their most costly mistake was hiring inexperienced staff.
Queenslanders were the second most likely to delay launching a business in Australia, behind Western Australia, over fears of failure.
Thirty-nine per cent of Queensland owners said they delayed their start up due to financial concern, while 44 per cent of business owners in the state said they wanted to spend more time prioritising their health and more than 46 per cent wished to take time off.
Xero Australia manager Will Buckley said the small business survey had highlighted “unique” mistakes that were only exacerbated by Australia‘s recent turbulent economic conditions.
“As the new financial year commences, it’s a timely opportunity for business owners to reflect on the year that was and embrace key learnings that will pave the way for future success,” he said.
Roy and Renae Kunda from Cape York Motorcycles
COUPLE’S MOTORCYCLE TRICK STILL BOOMING
Far North Queensland couple Renae and Roy Kunda credit to their decades of business success to maintaining an open mind and an eagerness to learn.
The husband and wife have been operating a popular motorcycle tour company on Cape York for 33 years, and are part of the small percentage of Queensland business owners who have defied the odds and expanded despite the pandemic and cost-of-living stress.
“When we started we had to work twice as hard as anybody else because there was no such thing as a commercial motorcycle,” Mrs Kunda said.
“I went back to university to learn how to run a business … when I finished we became the world’s first motorcycle company to become eco certified.”
When Covid-19 hit, lockdowns brought the tours to a grinding halt.
But the Kunda’s spent the forced downtime to draw up staffing manuals and renew safety code guidelines.
“And thankfully too, because now we need them with triple production years,” Mrs Kunda said.
“In 2019, the last normal year, we had 17 hire motorcycles and three guide bikes and one crew and by 2022, we had 75 hire motorcycles, 15 guide bikes and three working crews -2024 looks to be the same.
“People are obviously after adventure now after being locked down, which is great for us.”
The pair say their secret to success has been their dedication to continuing learning and improving their business, which has helped them maintain passion for their work.
“You have to be passionate about your business, know what it is you’re doing it for,” Mrs Kunda said.
“If it’s not true to you, you can’t fake it and your customers will know
“After that, just keep learning.”
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