August 2021 Business Finance Update
We hope you, your family and your colleagues are staying safe during these tough times.
We've got a mix of business news and tips for you this month:
How to buy a business without savings
ACCC scrutinising online marketplaces
Wages growth at very low levels
What you need to know about WHS
Read more below.
Want to buy a business but don't have the cash to fund the purchase? If so, it's possible to get around the problem with some creative thinking.
1. Tap into your home's equity. If the value of your home is significantly larger than the unpaid portion of your home loan, you could borrow against the difference (i.e. the equity).
2. Do a leveraged buyout. If you find a business that's available for below market value, a specialist lender might be prepared to finance the purchase. Why? Because the value of the assets would be greater than the loan needed to buy them.
3. Find shareholders. Other parties might be willing to buy a stake in your new business if you offer to do all the work, or if you can provide knowledge or contacts they don't have.
4. Vendor financing. The seller might give you the business for no money down, in exchange for you repaying the loan from your future profits.
All these options involve risk, so get financial and legal advice before proceeding.
Australia's competition watchdog, the ACCC, is examining competition and consumer concerns with general online retail marketplaces.
One of the issues the ACCC will examine is the relationship between marketplaces (such as eBay Australia, Amazon Australia, Kogan and Catch.com.au) and third-party sellers, which can range from small businesses to big brands.
The ACCC will consider pricing practices, the use of data, the terms and conditions imposed on third-party sellers, and the impacts on competition when the marketplace itself operates as a seller on the platform.
ACCC chair Rod Sims said the regulator wanted to be sure that the rules that apply to traditional retail are also complied with in the online context.
“These online marketplaces are an important and growing segment of the economy, so it is important that we understand how online marketplaces operate and whether they are working effectively for consumers and businesses,” he said.
Despite talk of the ‘Great Resignation’ among workers, wages growth remains at very low levels, suggesting the balance of power still favours employers.
Wages rose just 0.4% in the June quarter, according to the Australian Bureau of Statistics. As the chart shows, that’s one of the lowest numbers in recorded history.
Over the year to June, wages grew by a historically low 1.7%.
The sectors that recorded the highest annual growth in wages were:
Professional, scientific & technical services = 2.5%
Construction = 2.2%
Education & training = 1.9%
The sectors with the slowest growth were:
Arts & recreation services = 0.9%
Administrative & support services = 1.0%
Rental, hiring & real estate services = 1.1%
If you’re a business leader or a commercial property owner, it’s likely you have a duty of care to people who work at or visit your premises.
Workplace health and safety (WHS), also known as occupational health and safety (OHS), is governed by the Model WHS Laws and supported by the National Compliance and Enforcement Policy.
WHS aims to protect workers and visitors from harm by eliminating or minimising risk. It also promotes the provision of relevant advice, information, education and training.
Ethics aside, there are solid practical reasons for embracing WHS:
Businesses that break WHS rules can be penalised, while the individuals responsible can be hit with criminal charges
Workplace accidents can disrupt production
Insurance companies might be reluctant to insure premises with poor reputations
Landlords might struggle to attract tenants to premises with poor reputations
For more advice, you can contact lawyers and consultants who specialise in WHS.
Thanks for reading. Get in touch if you need help.
Disclaimer: The advice provided in this article is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. We encourage you to consult a finance professional before acting on any advice provided in this article or on this website.
