A hardly visible improvement might indicate the worst lags us
Federal governments must move away from one-size-fits-all regulatory designs.
ASBFEO just recently launched our fourth Small Business Pulse – a health-check on the small business operating environment. It recorded a tiny improvement of 0.1 percent this quarter. This is the very first quarterly increase considering that August 2022 after a substantial wear and tear that happened in the post-COVID duration. Over the past 12 months small company conditions weakened by 0.9 percent, but the little boost we are now seeing is showing some modest signs that conditions appear to be stabilising. It reveals that small and family business owners are digging deep to discovers ways forward. The Pulse also reveals particular locations where targeted policy and methods, more attuned to the real-life difficulties being dealt with and chances being pursued, would make a genuine favorable difference. It might be a hardly obvious enhancement in the small business trading environment, but it does hopefully signal that the worst lags us and a first step toward a positive shift in financial conditions for little and family services. With some input-cost inflation beginning to settle, the pressures on margins and success remain extremely real. We are seeing a shift toward re-pricing to restore profitability and small business owners thinking of consisting of expenses and what growth opportunities may be available. The May Pulse highlights that capital is still a major issue for small businesses. And while many feel the worst might be over, my office is seeing increasing numbers of requests for support with payment disagreements. This kind of disagreement, that frequently leaves a small company unpaid, can push the business to the economic edge, producing tension and heartache for the owner. Being able to get behind business doing the best thing by making supplier, employment and tax payments in a timely way would be assisted by a “good organization pays” recognition. This certification would honor those organizations fulfilling their reporting and payment commitments. It is just one of the positive and useful “14 actions” ASBFEO has been championing to “energize business”. The Pulse data also suggests that while there are still some areas of worry in the small business environment, small business owners are looking at many elements when considering their operating margins. This includes reviewing input costs, prices for their services or products, their range, what customers are saying and what opportunities are available to increase sales. We are seeing an increase in small businesses looking into importing and exporting opportunities in the May Pulse, with most of these inquiries about participating in trade across the Asia-Pacific region. This is exciting because small and family companies are now beginning to consider what the future looks like for them and their organization. They are possibly making plans to grow their services and how best to take advantage of new markets. Are we seeing the start of a mild wind in the sails of resilient small business owners who have valiantly hung on throughout an extended period of hard headwinds? Or is it just more impressive relentlessness of resourceful women and men? In the May Pulse, we have seen a modest increase in small businesses considering hiring additional staff. A consistently tight labor market and difficulty finding suitable staff have been hampering recruitment efforts, but indications point to a shift in concern from availability to cost. And let’s not be swayed by the rubbish that above-inflation increases in payroll costs without productivity improvement is somehow helpful, at a time too many small business owners are fighting to keep the lights on. Small business owners have continued to report in this quarter how difficult it is to navigate the complex employment laws, with many concerned about getting it wrong. This is a real concern, and an example of why we need to make sure that we take a more proactive approach to “right-sizing” regulation. Regulators and governments need to move away from the one-size-fits-all regulatory models. Regulations that are “right-sized” and fit-for-purpose will help small businesses meet their compliance obligations without fear. Interestingly, small businesses are also looking to maximize their business opportunities by deploying digital capabilities and using artificial intelligence to source exciting and new opportunities to attract and delight their customers, and to grow their business. Small business owners are also looking at how these technology tools can help them find more value and customers, and to navigate the complex compliance landscape. Better digital expertise and practical enterprise-specific tech support that is focused on business systems, digital solutions, and data management is another of the 14 Actions we have been advocating that will help support small and family business to grow and be competitive. Many small and family businesses have been impacted by flood, cyclones, and drought during the past 12 months. The Pulse highlights that short-term closure, lost income, and property damage remain concerns for those businesses caught in natural disasters. We need to be conscious that these issues and any ongoing insurance difficulties are likely to affect these and many other businesses in the years to come. Our focus needs to be not only the immediate support and assistance needed, but on what those small and family businesses need in the years and months to come for a sustainable and lasting recovery. The ASBFEO Pulse integrates traditional and non-traditional data to provide a powerful indicator of small business health right here, today. Collecting alternative data such as internet searches to complement official statistics gives a more nuanced understanding of the small business ecosystem. It provides an early insight into changes in the trading environment, especially when conditions are moving quickly. The ASBFEO Small Business Pulse helps us to see into the corners of the small business community, while reflecting the reality of small business owners’ daily experience.
