In the last month, we’ve seen Fairfax make 1900 redundancies, Fitness First retract their number of gyms and just this week we have Darrell Lea put up for sale after nearly 100 years with the possibility of 700 jobs at risk.
In the services industry, there is a conscious threat of redundancies and people are searching for work.
Meanwhile, to make our current picture look a whole shade darker, the Australian government is introducing an extraordinarily creative range of taxes that impact businesses and households. For many of my customers, taxes are making business more complex, more expensive and more difficult, which in turn places greater pressure and higher barriers of entry for entrepreneurs to enter the Australian market.
Latest figures show company collapses for the financial year to date are sitting at approximately 9074 – 13.6 per cent up on the same period last year. Small business closures in 2011 went up 48 percent with 2700 small business closing.
My local suburb, like many others, is littered with empty shop fronts. The local greengrocer we’ve supported for over 16 years is shutting down and moving to the Southern Highlands after two generations of family business. The brand new Supacentre down the road is empty of customers and household brands are packing and moving out after only months.
According to press reports, after the start of the ‘recession’ in 2008, and with an economy propped up by a booming mining industry, our Australian business environment is taking new hits. So will it get worse before it gets any better and what are the fundamental problems?
With big businesses in trouble, it’s hard to pinpoint a single cause of failure. Is it lack of governance, lack of customers, lack of flexibility in adapting to change and new times or poor management?
More recently, it is a lack of productivity in Australian businesses being slammed in the press. Australia’s foremost expert on productivity, Dean Parham, says it is essential that our National productivity be lifted. So as a Nation, are we too used to sitting ‘fat & happy’ and not measuring how we are actually making money to protect the future of our businesses?
When I went into a restaurant this week, local to my office the staff could barely deem to serve me. Another venue I experienced had so many staff in the kitchen, it made me wonder what they could all be doing.
Or is it that the Global landscape is changing significantly – a new industrial revolution where we are seeing online businesses take over where traditional lines of business would formally have run with more staff and higher operating costs. Maybe the new era is destined to be more “lean and mean”?
As consumers, at least we CAN do our bit to stabilise local business by continuing to support them and pay on time. As business owners, we can act cautiously, increase marketing spend, communicate and motivate better and watch productivity more tightly than ever.
Through the grey, the Aussie battler is not dead! It’s not all doom and gloom and there are companies bucking the trend. Such as Mike Andrews of Always Active health club who has just punted his nest-egg and opened a new gym at Artarmon station (outside our office – yes, yes yes!) with the latest mind boggling machines. As Fitness First retracts, the Artarmon community is rallying to see Mike succeed. A local guy, with a local offering and exceptional personal service, I’m hoping our corporate membership as a founding member will help this business serve us for a long time yet. As he says, “It’s been a dream for a long time to invest in my local community’s well being. The council haven’t made it easy, the builders haven’t made it easy, but my customers will help me make it through.”
From recent conversations, here’s a few tips.
1. Keep your bank posted
2. Communicate better with your team
3. Talk to your customers, past and present
4. Keep your suppliers posted
5. Keep a tight rein on the finances
6. Use social media
7. Lobby for change if you think it needs to happen
8. Increase your marketing spend
9. Watch productivity, then watch it again!