Access issues a threat to SMEs

Representatives from Perth’s SME sector at a recent WA Business News roundtable luncheon say finding the tools to overcome their problems is often painful, and expensive. Jane McNamara reports.

It doesn’t happen often, that a state government minister and their direct political opponent find themselves agreeing with each other.

However, it seems Western Australia’s Small Business Minister John D’Orazio and Opposition small business spokesman Troy Buswell are in this rare situation. Both have identified training, industrial relations and ensuring access to the capital works boom as some of the top priorities facing small and medium enterprise.

They have both hit upon themes that resonate with the smaller end of town. This is perhaps not surprising given Mr D’Orazio’s background in the sector, a rarity for a Labor politician, and the similarly experienced Mr Buswell, who has a desire to make a mark in a portfolio that has increasing importance in the electoral sphere.

These themes were very much at the fore at a WA Business News luncheon debate, as 11 representatives from the SME sector discussed the challenges faced and what was needed to ensure future viability.

Not surprisingly the skills shortage, training, industrial relations, big business versus SMEs and workers’ compensation were some of the issues representatives said they were concerned about.

This is, however, where the politicians and small business leaders appear to diverge.

They may all agree on the issues but the small business sector is aggrieved that it is often just too expensive to get advice and help to get past these obstacles – with the best advice often attracted to the high fees big business can afford.

SME owners struggle to find answers to their day-to-day questions and problems – ranging from legislation, reforms, and other government decisions to taxes, accounting and superannuation.

Many in the sector believe small business operators often can’t pay for the expertise they need to get past these intractable problems.

Cheryl Thompson, state manager of Medico (Legal Consultants of Australia), and Geoff Atkinson from Concept Office Solutions both said the people who needed the advice couldn’t afford it.

“We’re small businesses, we can’t afford $100,000 a year accountants, or industrial relations experts or medical experts or whatever it is,” Mr Atkinson said.

“And yet we need them because one workers’ comp claim [or one issue] could send us down – but we don’t know where to go for the information.”

However, the Coastal Business Centre’s Phil Kemp said “it’s the how”, that small businesses were chasing.

“In our experience small business wants to know how to do things,” he said. “It’s the how more than advice.

“If they want advice they will pay for it, I don’t take this argument that they can’t afford it. If it affects their bottom line they can afford it alright, there is no problem with that.

“It is information and know-how and how-to, and then if they need advice they will pay for it.”

But where can small business find this information and “how-to”?

Mr D’Orazio, who did not attend the luncheon, believes there is strong support for small business through the State Government’s Small Business Development Corporation, which has a mission to create opportunity and wealth for small business in WA.

It does this by holding workshops, organising expos and other activities, a website for women in business, and networks for young business, home business and small business exporters.

There are also the state’s 37 business enterprise centres, which offer guidance and support to new and existing small business operators and are supported by the State Government through the SBDC.

However, the future of the BEC network is unclear. About two years ago the SBDC commissioned a report on the structure and operation of the BECs. And today (Thursday) in parliament Mr D’Orazio is expected to announce his recommendations about the future BEC network structure. Public consultation will follow and Mr D’Orazio will finalise the plans by the end of August.

The report was commissioned to seek ways to improve the effectiveness and efficiency of the delivery of small business and support services.

Mr Kemp said unfortunately the BECs were not being utilised by SMEs as much as they should.

Research shows that when SMEs are seeking advice or “how-to”, first time every time it is family and friends who are approached, which isn’t always ideal according to Mr Kemp, because objectivity can be compromised.

“Second is other small businesses, followed by accountants, BECs and lastly, government agencies,” he said.

But Mr Kemp said for professional advice small business needed to access the BECs. He said it was a matter of educating the public about the BEC and its functions, which he hoped would happen following the review.

Besides the SBDC and the BECs, Mr D’Orazio explained another initiative to help SMEs called ‘link forums’.

The forums involve getting groups of small businesses together to talk about business and general issues.

“We will be doing this regularly and seeing what we can do about the issues raised,” he said.

However, Mr Buswell said for government to provide information to small business effectively it needed to look at the channels it was using.

“What about the business associations and industry groups,” he asked. “There are a large number of these which are not being tapped into.”

He added that although the WA economy was doing well on a macro level, small business was missing out.

“The challenge for government is how to enable and facilitate SME access to that macro economic growth,” he said.

SME SNAPSHOT 

• In September 2004 there were almost 140,000 small businesses in WA, being run by close to 200,000 people. 
• Research shows that small businesses grew by an average of 2.8 per cent annually between June 2001 and June 2003. 
• Small businesses make up more than 40 per cent of Australia’s goods exporters, making their survival integral to the future of the WA and Australian economies.
• State Government to outline recommendations on changes to structure of business enterprise centres this week.