A Mindhive Case Study: ASBFEO
Helping small business thrive post COVID-19
In May, the office of the Australian Small Business and Family Enterprise Ombudsman engaged Mindhive to run a public discussion to discover what Australian small and family businesses need from Government to recover post Covid-19. The insights generated were reflected in the ASBFEO’s COVID-19 Recovery Plan released on 25 May.
“Right now, many small businesses are wondering how they will survive and if it is worth continuing in business at all. Our Recovery Plan aims to restart the economy by getting people back to work and building economic confidence.” Ombudsman, Kate Carnell.
With Mindhive’s help, the Ombudsman’s project was communicated to 45,000+ individuals across Federal and State Government, Business, Education and Not-for-Profit sectors. The project gained the attention of 4,800 individuals. There were 653 unique visitors to the public discussion space and 181 registered participants.
In addition to the online discussion activity, Mindhive hosted a think tank with thought leaders from our community asking ‘What do Australian Small and family businesses need to do to recover post COVID_19?’
Participation in the online discussion and/or the think tank actively inspired Mindhive members to launch discussions focusing on economic recovery and small business.
Insights: The Rise of New Markets
Small and family businesses need support, now more than ever. Confidence that government support will be consistent and their ability to make informed, good decisions about their business future was deemed critical. Many felt an ecosystem approach for shared resourcing, upskilling small businesses would be valuable. business sector through difficult times.
Other messages that came through strongly included the importance of small businesses being able to access government procurement opportunities and finance and support for 30-day payment terms for small businesses. There was also a strong feeling that reducing red tape would unlock small business potential.
Over the course of the discussion, some clear themes emerged. One of the strongest messages was small businesses need to have access to the resources and advice that will help them succeed. This could be around strategic planning, managing finances, doing business online, and many other areas.
1/ Upskilling & resourcing support
A clear theme through the discussion was the belief that one of the most important roles the ASBFEO could play is to help small businesses move forward by providing access to resources that would better enable to them to transition their thinking and their business.
“A challenge faced by small businesses is the lack of R&D departments and training budgets. I believe the gap is widening, with more small businesses trying to fit into a smaller piece of pie. The Vocational Education sector has been trending downwards in perceived value for years. Higher Education is struggling to be more authentic. The Tertiary sector wants to help build a talented Australian workforce for the future but has room to improve.” Tony Allan
“I also see that one of the first things to be cut in a small and medium business is professional development and consulting support. So perhaps Government could enact matched funding across the board at a set percentage to support upskilling and business improvement services - either through education or use of consultants. At the moment this happens through the Entrepreneurs Scheme, which requires recommendations by an advisor but not all are accepted into the scheme… Support needs to be for "soft" leadership skills development as well as technical skills such as digitization.” Amanda Cole
“I would advocate for government backed support or funding, through providers and industry association groups, to assist SME/Family businesses transition part, or all of their operation to being online coupled with basic marketing strategies to support online distribution. Providing this support will deliver much needed resources and skill set that many SME/Family businesses do not have readily access to, and make their business model sustainable through COVID-19 and beyond.” Robert Hale
2/ Manufacturing, Innovation Hubs
An opportunity identified for local, sustainable manufacturing to be underpinned by small businesses. Particularly in regional areas.
“We need to look at Lee Kuan Yew from Singapore and how he created a vibrant economy. We need automation and robotics hubs to be associated with every regional and major university. Small business incubators can operate from the same site and book time on the computers and robots to produce and automate an invention or product.” Grant Spork
“Using the Ag sector as an example, an online regional marketplace could unlock export markets for small producers, provide transparency around pricing (supporting better farm/stock management) and support a micro-grid structure for distribution that could save carbon and minimise waste. Current models require small/family producers to have the internal capacity to manage sales, marketing & distribution or to go through agents in the central markets. A marketplace hub would enable these roles to be fulfilled from regional centres.” Clare Morgans
3/ Finance & Funding
Stability and broader coverage of the financial support offered to small businesses was flagged as critical for maintaining business confidence and effective recovery.
“Unfortunately many small businesses are going to need access to funds to rebound from this - so many are simply pushing commitments down the line to a future date and I am worried the real crunch time will come when all the tax debts, rents and so forth become due again.” John Knight
“One issue is how to get the banks to provide financial support to small business given they are inherently risky enterprises. One suggestion was that investors not have the shelter offered by negative gearing, thus forcing them to consider small businesses instead.” Peter Grimbeek
“… requests should be made to Australian Bankers Association for special consideration on accrued interest/operational costs during lockdown. The basis of the consideration should be that where businesses could show evidence of accrued interest/operational costs were incurred during the lockdown and they had qualified for Job Keeper payments that their operational overdraft limits be increased to cover accrued interest/operational costs (not related to staff) during the period of the lockdown.” John Cosstick
“The main thing I see is making sure the gaps in assistance are filled (my business does not qualify for any assistance), and for government to stop talking about winding back Jobkeeper/Seeker because for some it’s all there is. There is no chance of a V-shaped recovery if people and businesses aren’t shepherded through the worst of the crisis.” Martin Musgrave
4/ Payment terms
30-day payment terms were seen as a positive and important step for small business health.
“Having that time frame set in legislation assists businesses in knowing when recovery action can be started. At the moment, it's generally accepted that 6 months is adequate to start action in the Civil Administrative Tribunals. By the time that 6 months passes, it costs SMB's a lot of time & money to attempt to get the account settled, resulting in a choice between the cost involved in the time/fees to move forward with this course of action & hope the additional costs will be awarded OR just letting the debtor not pay.” Angela Welsh
“Legislated 30 day payment terms would be a big win for SMEs. Businesses also want to chase these outstanding payments early on as some will use the current circumstances for further delay. Can you offer a discount or a payment plan? I suggest to get everyone involved, if you are not collecting the cash you can't pay your employees.” Nadja Jahnke
“How can a business get finance to take on new contracts with the likes of Telstra after this lock-down period? With mounting ATO debts and prior ranking obligations to banks, there is no hope of raising ring-fenced working capital finance for most companies to take on such a contract… A business that can win a new profitable contract should be able to ring-fence the finance required – just like inventory finance (PMSI). It doesn’t disadvantage existing creditors – far from it, it helps everyone if the business increases its profitability.” Dermot Crean
5/ Government Procurement
The capacity for small businesses to access government procurement opportunities more easily was also deemed important.
“Agree that procurement policies that give SMEs an opportunity to win new business from government and also would be good if large business adopted the same approach of being prepared to procure more from SMEs.” Lindley Edwards
“Tender / RFP processes require days of work and pages and pages of written submission. Often the questions that are asked in the tender document are more statements of values and desired outcomes, rather than specific procurement requirements. Small companies do not have the resources to respond.” Jennifer Harrison
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