New initiatives have made an impact on the industry, but most Australian companies continue to run micro or tiny businesses. If you do not know any better, you might feel there are dozens and dozens of individuals running across the nation with tens of thousands of dollars in their bank account, flashy cars, fancy homes, all sipping pricey sparkling wine. A recent media released by the Australian Affairs Ministry said that $1.084bn in contracts were awarded in the past fiscal year. To most people, when you see figures like that, you would think the economy is doing well.
But, that is not necessarily true. Let us unpack the very first stage. A contract’s value — for instance, an $80,000 contract — isn’t the same as profit. You cannot go out and buy an $80,000 car. A deal may earn $80,000, but it may cost you $70,000 to provide the services. If you are lucky, you may get to keep $10,000, though a chunk of this will likely visit the tax office. So while the assortment of new initiatives has made an effect on the local small business sector, many businesses remain micro or small: just ordinary people building a business for themselves and their families.
There is a popular ad which goes around Facebook that states: “If you purchase from a small business, you are not helping a CEO buy a third holiday home, but you are helping a mother pay for dance classes, a small boy buy his club jersey and mums, and dads put food on the table.” That is so true, particularly for local small businesses.
There’s also a distinction to be made from the companies referred to in the minister’s press release which describe companies that service the national authorities. They are businesses, which are building roads and infrastructure, and much more. However, there are lots of different businesses that fall well beyond the reach of federal government contracts — a neighbourhood pizza shop, a mechanic, a hairdresser, a tourist business of some sort. It is these companies that ordinary Australians can help support.
Use a local company as your provider
Does your company purchase stationery or toilet paper? Do you need business coaches, consultants and technology project managers? Do you use liquid nitrogen?
Being a regular customer and purchasing from local companies can help expand these local businesses.