There were more than 2.3 million actively trading businesses in Australia in June 2018, an increase of 3.4 per cent from June 2017, according to figures released today by the Australian Bureau of Statistics (ABS). This represents the fifth consecutive year of growth of businesses in the Australian economy. Not sure what this statistic is now, but I bet a lot of unemployed people are getting ABN’s and reinventing themselves.
67.2% of all enterprises, are operated by one person.
22.7% of all enterprises employ less than five people.
Nearly 90% of all Australian Businesses are, really, really, small.
Sure, a lot of these businesses trade with each other and so some of these “one person shows” have several subcontractors and look bigger than they are. But that leaves 240,000 businesses in Australia that are big enough to afford say a “proper” administration (one of those administrations that were meant to heal a company).
The new government legislation is– well hard to believe.
I am left asking “where are they going with this small business restructuring practitioner – thing”.
This vague Claytons administration that is for businesses with less than a million dollars in debt.
90% of Australian Businesses wouldn’t know how to get into a million dollars’ worth of debt that isn’t real-estate (ok, ok we have had a few clients over the years with an exceptional talent for this sort of thing) and it strikes me that this bar has been set high for more substantial businesses to breeze on through insolvency, instead of smaller firms.
Most businesses I see, if they have debts of $200k, they are hemorrhaging, not a million dollars.
Most SME’s I see do need to have the toys occasionally taken from them while things are fixed up. Most SME’s are overly optimistic about how they will pay their tax debt and other creditors. So, being left to plan for creditors will be hard to imagine. We believe that the insolvency industry, if nothing else, gives small businesses “time out for a reality check”.
Any Government inquiry into this industry should have started with their statistics from the ABS and suited the legislation around that.
Insolvency firms will continue to work with more and more smaller businesses and need to create new efficiencies in how they operate.
I will slip in hear that our Fast Rabbit company provides a service where we take bank statements and turn them into accounts that make reports, checking for voidable preferences and an understanding of the business’s performance quickly.
You can put away the highlighters and the need to load up an excel spreadsheet; we can do all that for you.
If you take on the role of Small Business Restructuring Practitioner, with the Government’s product of “debtor in possession”, we can take a bank feed and tell you overnight if the business makes or can make money, and if the plan being proposed by the business owner has legs.
Contact us at Fast Rabbit and let us know if we can help you with a job. And maybe you have a comment for our blog.
