INSIGHT –
56.60% of “Cash Strapped Sole Traders” are not even aware of cloud services
Insights
- 56.60% of “Cash Strapped Sole Traders” are not even aware of cloud services
- “Cash Strapped Sole Traders” have the highest material purchase capital costs/allocation, and they also have the highest “Pay Bills” capital allocation
- “Cash Strapped Sole Traders”, 53.47% are between 45-55 years of age
- Only 0.97% of “Cash Strapped Sole Traders” capital goes towards “New business Opportunities” against the average of 12.35%
- Largest Demographic of business owners are aged between 45-55 years of age, with 31.59% of businesses
Commentary
- Age demographic spread of Small Business Owners aligns with cultural customs of, gaining workplace experience as salaried employee while younger, then starting their own business in a later stage of their life
- Regarding “highest material purchase capital costs” – This aligns with the cultural receptiveness of the emergence of Technology, specifically the documented issues of older generations transitioning from web 1.0 to web 2.0 (e.g. Kodak, Blockbuster, Toys R Us, Borders)
- Older Generations focus in other areas that they perceived of benefit to themselves. They were not able to see the changes in consumer expectations and/or not seeing the value in digital supply chains that match up with a digital customer facing sales platform / workflows. Essentially they are operating brick and mortar stores that can’t compete due to lack of tech adoption/modernisation.
- Large concern as It’s back again with the transition from Web 2.0 to web 3.0, 56.60% of “Cash Strapped Sole Traders” are not even aware of cloud services, history does repeat itself if people don’t learn lessons.
- Core technology literacy and user adoption rates in technology needs to be increased with the older demographics
- Core business literacy and user adoption rates in business needs to be increased with the younger demographics, as most younger demographics are either working in salaried based work, studying or classified as “NEET.”
- Due to demographic changes, large numbers of people with business experience are retiring by 2030, with minimal younger people currently been given the opportunity to learn skills at a higher level
SSBA Solutions
- Increase technology adoption rates, especially in the 45-55 year old demographic – SSBA SOLUTION LINK / Go to Technology Category
- Increase core business knowledge in younger demographics – SSBA SOLUTION LINK / Go to Life Skills Category
Solutions Roadmap
- Skills share program, / cross mentor relationship (both ways) with a way to match up older and younger generations to contribute and skill share either to their individual businesses or enter into a partnership, older generation can leverage connections, younger generation can leverage digital adoption knowledge
e.g. Young people might not have the business experience, but they have the tech experience. And older generations have the business experience but are struggling to compete in today’s digital / IT world. Need to exchange this knowledge and the individual will have a good foundation and balance to run a successful small business
NB – Only optimised for PC/Desktop Currently
These are the segments surveyed
- Business In Transition
- Career Switching Start-up
- Cash Strapped Sole Trader
- Cold Start-Up
- Established Servicing Contractor
- Growing Business
- Hobbyist
- Large Established Firm
- Mature Steady State
- Professional Independent
- Stable Subcontractor
INSIGHT –
44.26% of Small Businesses need to access additional capital, as a result of delayed payments
Insights
- Largest reason for business owners needing more capital, was people not paying them on time @ 44.26%
- Next reason down was. 14.51% of businesses needing to buy materials.
- There is a gap of 29.75% between not being paid on time, and needing to buy materials
- 6.53% of businesses need more capital to pay bills
- 4.11% of businesses need more capital to pay wages
Commentary
- Larger companies and other small businesses need to pay on time, suspect larger companies have issues with payment terms due to their poor capital structure, suspect small businesses have cash flow issues themselves
- Nonpayment for a reason for accessing more capital is a huge reason that really stands out
- Cash Flow is a killer, many dont know how to manage cash flow, are overtrading due to wrong terms of trade & lack of financial knowledge
SSBA Solution
- Templates provided on how to:
Manage cash flow,
How to track variations, with ways to quantify the numbers in real terms against budget numbers
Separate fixed cost and variable costs
Solution Roadmap
- Increase the use of reverse factoring companies on a big business layer, offer quicker payment terms to small businesses (10-15 day)
INSIGHT –
61.34% of Small Business’s say “yes” to switching financial services provider
Insights
- 61.34% of Small Businesses said yes to switching financial services providers,
- 12.68% of people say they would move providers if there was a better service provided
- 16.43% of business owners would switch for a better rate
- 5.10% of business owners would switch for a better product
- 4.06% of business owners would switch only if the provider made it easy
- 23.07% of business owners would switch unconditionally
Commentary
- An average 61.34% of Small Businesses said yes to switching financial services providers, meaning there is minimal loyalty with specific brands and consumers are after the best price point possible,
- It’s not all about the bottom line, 12.68% of people would switch if there was a better quality of service provided
- Primary reason for not switching is due to complexity and inability to get existing facilities elsewhere
Solution Roadmap
- Provide a way to compare financial service providers, make it easier for consumers to compare
- Provide ways to match up existing functionality with other providers, or identification of functionality that only 1-2 providers might have
- Find a reliable independent industry quantitative based figure, that reflects customer service levels / better service levels
- Obtain high level cost estimates on possible savings to be obtained, with switching provides (show people how much money they can save – lean on the self interest trigger)
Australian Business Growth Fund Bill 2019
Summary
This bill establishes the Australian Business Growth Fund (ABGF) to: provide a source of ‘patient capital’ for small and medium enterprises; authorise investment by the Commonwealth in the ABGF; and appropriate $100 million for the purposes of the ABGF.
It was introduced and read for the first time on 05/12/2019, the bill was been referred to the Senate Economics Legislation Committee on 06/02/2020, for a report that was released on 21/02/2020
For Digital Finance Analytics position on the issue, please view green box below
For the Senate report, please view the peach colord box below
Go to: DFA ABGF Bill 2019 Submission
Go to: ABGF Bill 2019 Final Committee Report
About
Digital Finance Analytics runs regular phone and focus group surveys across samples of Households and Small/Medium Businesses in Australia. This enables DFA to facilitate custom analysis in near real-time to assist players in the Financial Services Industry with the development of their strategies.
Through this regular flow of data, DFA is able to track the accelerating migration to digital channels and using segmented analysis, DFA can determine the rate at which new and existing competitors in the sector need to reconfigure their business to meet current and expected future demand.
In addition DFA flow’s this data into a range of market models which track leading trends in finance, property and customer behaviour. These models can examine developments at a household, segment, product and market level, and enable us to comment on broader industry and market issues.