The Australian Small Business Blog

Monday, May 12, 2008

The Forgotten Majority of Business Owners

An Occasional Editorial by Dr Greg Chapman, MBA

In Victoria’s state budget last week, the government claimed to be providing assistance to business owners. Leaving aside for the moment, the fact that they returned in taxes only a portion of the tax increase since the last ‘handout’, even this was received by a minority of businesses. That is businesses large enough to pay land and payroll tax.

What about smaller businesses, the micro-businesses representing 61% of all businesses, and employing 26% of the private sector workforce? The government, as always treats the micro-business owner (those with less that 5 employees) as though they don’t really exist – as if they are not proper businesses.

Now the state government doesn’t really take much from them, so it can’t pretend to give anything back. Short of giving micro-businesses wads of free cash- dream on, what could it do? They could reduce red tape and regulation- but that also appears to be an impossible dream.

The most important asset a micro-business owner has is his or her time. How much time do you spend stuck in traffic? Along with most other Victorians, they suffer due to the lack of investment in road infrastructure. They suffer disproportionately more than larger business owners who have a lot more support so they can focus more of their time working on the business.

The cost of delays due to traffic congestion increases every year. A 2005 study showed that congestion in Melbourne cost business $1.4 billion in that year alone, with the figure expected to double in the next decade.

For the small business owner and their staff who rely on road transport, public transport being a non-option, spending several non-productive hours a day in traffic congestion is a major cost to their business. When business owners spend time in a car, rather than providing a service to their customers or finding new customers, this is a huge loss to their business.

While public transport funding is admirable, small business owners, like all road users, see funds raised through road taxes and charges largely diverted to other government programs. Most small business owners support the user pays principle and are not looking for subsidies. They do expect, however, a higher proportion of funds raised by road users to be spent in improving infrastructure.

The current budget, like all recent budgets before, refers to ever more studies and plans but no actual commitment to invest. There are 270,000 businesses with less than 5 employees in Victoria. The rate of growth in the number of these businesses is 11% per year. Small businesses are also responsible for 70% of the employment growth. Why then are the needs of this group always ignored?

Dr Greg Chapman

Over to You. What do You Think? Post Your Comments Below.

Dr Greg Chapman is the Director of Empower Business Solutions and The Australian Business Coaching Club and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems. He is also the author of The Five Pillars of Guaranteed Business Success.

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1 comment :

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Dr. Greg Chapman is also the author of
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