By Bruce Billson
Our goal, at the office of the Australian Small Business and Family Enterprise Ombudsman, is to help to ensure Australia is the best place to start, grow and transform a small business and family enterprise.
It’s not our gift to guarantee any business will be a success but it is our mission to make sure no one fails because they didn’t know about something that would help.
We do this through our assistance function and our work to showcase ‘better practice’ among smaller enterprises and those dealing with them. We also provide advice to the Australian Government and its departments and agencies.
Since being created 7 years ago, we have helped small businesses to resolve over 40,000 disputes with other businesses or government agencies, at low-cost, outside the costly legal system.
Small businesses have faced a rolling series of challenges over the past few years, yet small business continues to make a massive contribution to our nation and our communities. These are great people in plain sight, and we see them everywhere, every day.
The value of small business to the economy is $506 billion – half a trillion dollars – and accounts for one-third of Australia’s GDP.
Almost 98% of businesses are small businesses – some 2.5 million who provide jobs for over 5.1 million people and employ 42% of all apprentices and trainees in training which is nearly double the amount employed by big business.
Small business owners come with varied ambitions and experiences. What they have in common is the entrepreneurial flare and desire to have a go.
Statistically, across the board, the average small business owner is a self-employed man, aged 50, who works full-time and earns below the average full-time wage. Yet that is far from the full story. Female ownership is trending up and now accounts for 35% of all our small business owners.
But small business owners are getting older. Nearly half are aged 50 or over. And just 8% of are under 30 – that’s half the peak for this age group of 17% achieved in the mid-1970s. We need to replenish and nurture the next generation of entrepreneurs, value self-employment and encourage and enable smaller enterprises and the livelihoods they make possible.
Owning a small business can be a hard slog and not always be as rewarding as people might hope. Around 43% of small businesses failed to make a profit and 75% of owners take home less than the average wage.
With modest incomes, tight margins and increasing costs, the value and importance of trusted advice is vital. That’s where we can help.
The Franchising Code of Conduct is a mandatory code for all franchisee and franchisor businesses. It describes expected behaviours and includes a process for managing disputes.
Our Assistance Team can guide a small business to understand and participate in the dispute resolution process under the Code and we can help find an Alternative Dispute Resolution practitioner for an ADR process, especially in cases when the parties can’t agree on a process to resolve their disputes.
Some of the more common cases that we see in franchising relate to royalties, fees and commissions associated with sales, leasing arrangement disputes and termination of franchise.
In a recent case in the food industry, a franchisor started charging royalties on all sales through food delivery services. This was not consistent with the franchise agreement and following our involvement, the franchisor agreed to revert to the original agreement.
Another case involved a franchisee being concerned about consistently being supplied with poor quality products which they said was causing financial hardship and harm to their reputation. We assisted in referring this matter for mediation so that the parties could directly negotiate an outcome with the assistance of the mediator.
And while ADR can resolve disputes, when that doesn’t work the cost and time of going to court for a ruling can be significant. Small businesses do not have the time or resources to pursue these matters, often leaving issues in the franchise system unresolved and lingering. We encourage parties to consider arbitration under the Franchise Code to resolve disputes as it can be quicker and cheaper than court.
We also advocate for the creation of a Federal Small Business and Codes List into the Federal Circuit Court of Australia to provide small businesses and regulators with more feasible and timely means of enforcing their legal rights. It would cover industry codes disputes like franchising, unfair contracts and other small businesses issues with disputes capped at $1 million (award or fine) and delivered via online hearings, significantly reducing the time and cost burden on a small business.
We champion the need for right-sized regulation. Too often, it is assumed a small business is a shrink-wrapped version of a big business with a compliance and HR department when in reality it is the time-poor owner who has to deal with the frequent changes to workplace and taxation laws not to mention managing privacy and cyber security issues.
We also provide a Tax Concierge Service which allows a small business that objects to an assessment from the Tax Office to get an independent reality check of the viability of their case, before time and money is spent.
Finally, when you own a small business, it is just as important to spend time working on your business as it is to spend time working in your business.
Small business owners feel acute pressure to ‘do it all’ and to keep up the appearance of being fine even when they were struggling with their mental health and wellbeing.
For small and family business owners, their identities are interwoven into their business and the stakes are so much higher than just a job. In many cases they have put their family home on the line — to build up their business, which amplifies the emotional challenges.
We aim to put the wind in their sails, not in their face.
We have a range of checklists, resources, tools and guides to help small businesses on our website www.asbfeo.gov.au
The mission of the Australian Small Business and Family Enterprise Ombudsman is to help ensure Australia is the best place to start, grow and transform a small business and family enterprise. ASBFEO understands the challenges facing small and family business and provides advice and research to improve policies, access to dispute resolution services and mental health support should the need arise. www.asbfeo.gov.au
Bruce Billson is the Australian Small Business and Family Enterprise Ombudsman
Bruce Billson commenced his role as Australian Small Business and Family Enterprise Ombudsman (ASBFEO) in March 2021. The Ombudsman is an independent advocate for small and family businesses. Bruce brings three decades of experience, knowledge, commitment and an understanding of the issues facing small business. Bruce was the Australian Government Cabinet Minister for Small Business from 2013-2015, a founding Director of Judo Bank and has held various board appointments, including the Franchise Council of Australia, Deakin University Business School and Australian Property Institute. He has also owned and operated a number of small businesses, and knows first-hand the joys and challenges this involves.