As if running a small business wasn’t tricky enough, the last few years have increased the level of difficulty for business owners.
Lockdowns and social isolation are significantly reducing foot traffic. Supply chain issues prevent delivering valuable materials, equipment, and deliveries. Employee turnover has increased as a result of the Great Resignation.
As the federal election approaches, everyone is wondering what business owners want and expect from candidates in 2022. Employment Hero, a people-management platform, polled 528 Australian SMEs about the upcoming federal election.
According to the survey results, SME owners want to avoid another lockdown at 63.3 per cent, closely followed by more financial support (59.5 per cent) and wanting the borders to remain open (54.9 per cent). Following that were better business guidelines (42.1 per cent), subsidies for further education and training (40.9 per cent), and subsidies to help businesses go digital (40.9 per cent) (39.4 per cent.)
To better understand the survey results, Dynamic Business spoke with Ben Thompson, Co-founder and CEO of Employment Hero.
“The last three years have been particularly tough for Australian SMEs, and I’m not surprised by the areas they most want to see action from the government on. Providing greater financial support and avoiding another lockdown have remained the two priority areas for SMEs across 2021 and 2022.
“These, of course, go hand-in-hand. Nationwide lockdowns have led to less business revenue, and lesser business revenue has led to SMEs requiring more financial assistance to alleviate the burden on their bottom lines.
“Unsurprisingly, keeping the borders open has replaced subsidising further education and training as the third most important area SMEs belief the government could do more for.
“This could be because earlier on in the pandemic, SMEs sought out ways to make the best of the fairly stark situation at hand, but as things worsened over the proceeding 12-months, this gave way to more critical priorities that could essentially determine whether their business survived at all.”
The survey finds that the federal government’s top initiative for improving employment management for small businesses is replacing state payroll taxes with federal GST distributions (27.3 per cent), followed by subsidies/increased tax concessions for business software (22.2 per cent), simplifying the award system and improving digital literacy and adoption (16.9) (11.7 per cent), respectively.
“Where an Australian life impacts the payroll tax a business needs to pay. This is an unnecessary complexity for SMEs, so Ben explains that their top pick comes as no surprise.
“The second top choice of subsidising/increased tax concession for business software is interesting. Many SMEs felt forced to adopt new technology through the pandemic’s rapid digitalisation.
“Now, many feel like they have no choice but to keep their digital systems. Some business software is also essential to stay compliant, such as a payroll system to report in line with the new STP reporting requirements.”
With inflation rising worldwide, businesses are feeling the pinch from all sides, and small businesses are worried about how much of these costs they’ll need to absorb to sell their products/services and retain their staff. The ongoing pandemic disruption has left many anxious, and some even discouraged about the future of their business.
Ben notes that as it concerns SMEs, parties’ primary focus in the upcoming election should be to help business owners feel confident investing in growing their business again.
“SMEs makeup 99 per cent of businesses in Australia, employ 68 per cent of the country and contribute to more than 57 per cent of Australia’s GDP – we need to ensure these leaders are supported and granted strong opportunities to rebuild and flourish. If business leaders can grow their business with confidence – everyone is better off.
“We saw some promising signs of this support in the recent federal budget announcement. The calculation used to set how much tax a business must pay each quarter will drop from the next financial year, granting SMEs greater cash flow.
“There is also a greater incentive for small businesses to invest in digital technology and skills to grow, as come tax time, they can claim more in areas of spending such as website development, cloud-based services and portable payment devices.
“Small businesses (with an annual turnover of less than $50 million) are eligible to deduct an extra 20 per cent when investing in digital uptake, up to $100,000 per year.
“In the lead up to the election, the labour party has also promised a plan to ensure quicker payment terms for small businesses and reduce transaction costs, meaning quicker access to more cash flow when the SME community most need it.”
Despite great uncertainty and challenge, thousands of new businesses opened their doors (physically or digitally) and began hiring last year.
According to August 2021, ABS data, employing businesses with fewer than 19 employees increased by 13.2 per cent year on year. The pandemic allowed many people to reflect on what was truly important to them – both professionally and personally.
And starting a business where they can invest their time and energy into their vision could be one way to stay focused on what matters to them.
The Federal Government’s announcement offering incentives to SMBs to invest in digital and cloud adoption as part of their Digital Economy Strategy 2022
“Many of the SMEs that implemented digitalisation during the pandemic has now achieved this goal, meaning it has dropped down the priority list as a macro consideration.
“In saying this, these businesses are now seeking financial support to continue to pay for the technology they have acquired due to their digitalisation efforts,” Ben says.
“This is why the digital technology tax incentives outlined in the budget are welcomed with arms wide open and will only help many SMEs continue to practically adjust, prepare and grow for the remote/hybrid workforce of the future.”
As per the 2022 Small Business Bravery Report, when asked what the biggest challenges will be for small business owners in 2022, 40 per cent cited external factors beyond their control, such as climate change and future COVID responses. It’s not surprising that some respondents want to gain more control over their future.
Other owners are looking for long-term stability. Twelve per cent want to make 2022 the year they figure out an exit strategy or succession plan for their company, while another 5 per cent want to protect their legacy.
The bottom line: Much of 2020 and 2021 were spent doing whatever it took to keep the company afloat. However, after valiantly overcoming all obstacles and challenges thrown their way, it’s clear that many small business owners want to get back to doing what makes them happy.
Find more about the Employment Hero survey here.
This post was aggregated from Dynamic Business (https://dynamicbusiness.com).