Have you missed today’s headlines? Never fear. Catch up on the news that matters to small business owners with our daily news briefs. Here’s what you need to know on Friday, October 11, 2019.
Small business ombudsman launches insolvency inquiry
The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell has announced an inquiry into the insolvency system, to investigate if current insolvency practices achieve the best possible outcome for small and family businesses in financial trouble.
“This inquiry will shine a light on the insolvency system and uncover if it encourages practitioners, in the first instance, to restructure the small or family business to turn it around.
“Unfortunately the Banking Royal Commission wasn’t asked to look at the role of insolvency practitioners and that was a missed opportunity.
“We know there is a very low success rate in restructuring Australian businesses under external administration and the impact of the insolvency process is often devastating for the small business owner. Few small businesses that enter formal insolvency administration are able to navigate their way through the process to reach a restructuring agreement.
“The latest data reveals more than 8,000 businesses entered external administration in 2018/19. Of those, small and family businesses in rural and regional Australia have been among the hardest hit.”
Businesses should grow a conscience says the International Monetary Fund
A report by the International Monetary Fund (IMF) has suggested businesses need to pay more attention to environmental and social concerns if they want to get ahead. The IMF suggests businesses that ignore social injustice will face growing pressure that could risk their survival. In fact IMF suggests businesses (big or small) that invest in social good could actually increase their profits.
“Firms may choose to invest in environmental, social or governance projects in response to evolving investor or consumer preferences,” the report read.
“Business investment may lead to a more motivated workforce and greater trust between firms and stakeholders.”
Business confidence drops but it’s not all bad news
The Roy Morgan Business Confidence index has dropped 3.7pts (-3.2 per cent) to 110.6 in September. Despite the month-on-month drop, Business Confidence has now averaged an increase over 8pts post-election and remains 5 points higher than early 2019 conditions.
Businesses also remain optimistic for the future with more than half of those surveyed saying 2020 will be a good time to invest in their business and 51.7% expecting the business to be ‘better off’ this time next year.