Five barriers facing small business in Australia and how to overcome them

There has not been enough focus on how to kickstart the growth in small, local economies, according to the chief executive of the Council of Small Business of Australia.

Small business groups, corporate regulators and public servants are gathering in Sydney today to discuss the challenges facing small business and how the whole community can benefit from tackling issues to do with tax, competition, funding and innovation.

During the opening address of the MicroEconomic Challenge, COSBOA executive director Peter Strong said there are many issues affecting small business that don’t have the same impact on large corporates.

Here are five of the key barriers and how to overcome them.

1. Plain packaging

Strong says it’s time the big supermarkets such as Woolworths and Coles put the broader economy before their own profits and understand that plain packaging hurts small business and stifles innovation.

“When you plain label something, it’s cheap and it’s good quality and you put it out on the shelf and it sells,” Strong says.

“The dominate player in the market says, ‘you beauty’. But could I, as the small business, start new products or grow? No, because people don’t know my brand.”

2. The lack of an effects test

Strong says policy-makers often refer to the need to protect the free market when it comes to defending the delay in implementing the effects test proposed by the Harper review into competition reform.

However, Strong pointed out the status quo isn’t a free market because government intervenes all the time and big business is currently protected from competition.

Canberra needs to hear this loud and clear, he said.

“Why are you protecting them?” Strong asked.

“Why is it OK to protect them [the big businesses] from competition?”

3. The lack of a risk-taking culture

Strong said when he travels to local communities, he often meets people who say their town or region is crying out for a particular service.

“It’s easy to say ‘why doesn’t someone else do it?’,” Strong said.

“A better question is – why don’t you?”

4. The idea that businesses and communities have opposing interests

For too long, people have seen small business issues and social issues as polar opposites, according to Strong.

The solution is for small businesses to trumpet the critical role they play in their local communities.

“This is our problem, this isn’t there problem,” Strong said.

“Bourgeoning youth unemployment is a problem for the entire community.”

5. The complexity of industrial relations and tax laws

Strong says government watchdogs like the Fair Work Ombudsman are doing a good job educating small businesses and providing helpful resources.

However, more needs to be done.

“Give it [the appropriate information] to them [small businesses] in a way that they can understand it,” he says.

“Provide the funds to make it happen.” 

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