Australia’s net new businesses growth rate up 0.4 per cent

RSM_Bird_Cameron_Logo@2xJune 17, 2014 – Australia’s net rate of business creation grew by just 0.4 per cent in the year to 2013*, with the creation of 9,000 new companies, according to a global survey of official data by RSM, the seventh largest global network of independent audit, tax and advisory firms.

Enterprise births and deaths in Australia diverged in 2008-09, producing net company formation of over 74,000 companies. Rates then converged on a downward trend, with new company entries marginally surpassing exits between 2010 and 2012.

Neil Cribb, Partner and National Head of the Turnaround & Insolvency Group of RSM Bird Cameron, said: “Notwithstanding an economic environment with falling interest rates to historical lows in the first quarter of 2013/14, going forward we would expect to see a continuing decline in net business creation.  This comes as a result of the continuing pressure of high operating costs for most Australian businesses (particularly when compared to our Asian neighbours). A particular case in hand the manufacturing sector as evidenced by the necessary restructure of the Australian motor vehicle industry, which has struggled to be competitive over an extended period even with extensive industry and government consultation and support.”

Construction was the leading source of business churn in Australia from 2008-2012, with more than 400,000 company births and deaths. Manufacturing registered the lowest aggregate business churn with 83,000 births and deaths.

Financial services accounted for the highest level of net business formation (nearly 18,500 organisations) from 2008-2012, a noteworthy achievement given the weak performance of financial start-ups in other OECD countries.

Measured by company size, micro enterprises (1-4 employees) exhibited the highest level of new business formation in Australia in 2008-12. Sole proprietorships (no employees) and small enterprises (20-199 employees) incurred net company losses
during the period. Large enterprises (200+ employees) displayed virtually no change in net business formation.

New company survival rates in Australia show considerable differences between
industries. One-year survival rates of Australian companies founded in 2008 ranged from 89.3 per cent in agriculture to 81.9 per cent in hospitality. Industry survival rates then diverged. By 2012, only 53.6 per cent of hospitality companies formed in 2008 had survived against 73.1 per cent of health care companies.

In 2011-12, the G7** countries were led by France in term of net new business births. France exhibited a 16.7 percent growth rate (588,000 new companies), the fastest of the 38 countries RSM reviewed. A major contributor to this success was France’s “Auto Entrepreneur” programme, launched in 2009 to stimulate company start-ups.

The USA, Japan, Germany and the UK all showed modest growth rates of 0.6 per cent, 0.8 per cent, 1.1 per cent and 1.2 per cent respectively, while Italy declined by 0.3 per cent and Canada dropped by 13.6 per cent, the worst performance all 38 countries.

RSM’s research also shows that the net rate of business creation among the G7 economies has increased relative to the BRICS*** countries. Between 2011 and 2012, the G7 countries posted a 1.9 per cent growth in the active company register, an addition of 531,000 businesses, versus a CAGR of only 0.8 percent from 2007-2011. By comparison, the BRICS generated 1.2 million new enterprises from 2011-2012, a growth of 4.9 per cent compared to a CAGR of 5.8 per cent net new business growth rate from 2007-2011.

The BRICS were led by China (9.1 percent). Brazil grew by 3.4 per cent but the other economies all showed negative growth: Russia (-0.4 percent), India (-3.2 percent) and South Africa (-10.0 percent).

Jean Stephens, Chief Executive of RSM, comments: “Entrepreneurs all over the world are continuing to start businesses, the most active sectors being wholesale and retail trade, and professional services, which have relatively low barriers to entry. However, nearly a third of the countries we reviewed exhibited a decline in the number of active enterprises. Creative destruction and the reallocation of capital to more efficient existing and new businesses will have a large part to play in this process but the global economy remains fragile. The watch phrase for the next year must be no more than cautious optimism as individuals and companies respond carefully to government actions and macro indicators.”

ENDS

* 2012 (most recent globally comparable data available; Australia data from the Australian Bureau of Statistics)
** Canada, France, Germany, Italy, Japan, UK and US
** Brazil, Russia, India, China and South Africa

About RSM International
RSM International is the seventh largest network of independent audit, tax and advisory firms, encompassing over 100 countries, 700 offices and 32,000 people internationally. The network’s total fee income is US$3.7 billion.

In March 2013, RSM was awarded the prestigious Editor’s Special Award for Global Initiative of the Year at the International Accounting Bulletin annual awards. The award recognises the outstanding achievement of the RSM network for its global initiative – RSM World Day – which was praised for being a unique and powerful cross-network initiative that enhanced both employee and client engagement. The judges highlighted the campaign as a shining example of how to successfully connect independent member firms around the world under a common vision and set of values.

RSM International actively engages in promoting and celebrating the very best in entrepreneurship, championing the role of the entrepreneur in today’s world economy. RSM International is the lead sponsor and corporate champion of the European Business Awards promoting commercial excellence and recognition of entrepreneurial brilliance.

RSM International is a member of the Forum of Firms. The objective of the Forum of Firms is to promote consistent and high quality standards of financial and auditing practices worldwide

RSM is the brand used by a network of independent accounting and advisory firms each of which practices in its own right. RSM International Limited does not itself provide any accounting and advisory services. Member firms are driven by a common vision of providing high quality professional services, both in their domestic markets and in serving the international professional service needs of their client base.

2014 marks an exceptional year for RSM International as it celebrates its 50th Anniversary.

www.rsmi.com

Australia lagging behind in business creation

RSM_Bird_Cameron_Logo@2xJuly 29, 2013 – Australia is lagging behind in business creation, according to figures from global research by RSM, the seventh largest global network of independent audit, tax and consulting firms. RSM studied data on business ‘births’ and ‘deaths’ over the last five years in 35 countries across its international network. Australia ranks 23rd on the list, trailing behind other Asian countries like Hong Kong, China, Singapore, India and New Zealand.

Over the last five years*, Australia has seen a net gain of 58,000 businesses, an annual compound growth rate of 0.7 per cent. This puts Australia on par with the UK (0.7 per cent growth rate) and ahead of the US, which had only a 0.3 growth rate.

According to RSM, whilst some governments around the world have been looking for ways to stimulate entrepreneurship in the wake of the financial crisis, others have been slower to respond. The research clearly shows that with businesses around the globe facing a variety of challenges including regulation and compliance changes, tighter financing requirements and rising commodity prices, more needs to be done to boost business creation and survival.

Of the 35 countries sampled, Hong Kong has exhibited the fastest rate of new business creation over the last five years – 9.9% on an annualised basis, from 655,000 to 956,000 – while South Africa has seen the steepest decline in the number of active enterprises, – 3.8% per annum, from 956,000 to 817,600.

Other Asian countries with rapid growth included China (6.9 %), Singapore (4.8%), India (4.7%) and New Zealand (4.4%).

Number of active enterprises (in 000s), 2007-11

 

2007

2008

2009

2010

2011

Compound annual growth rate

Hong Kong

655

711

772

864

956

9.9%

China

9,600

9,715

10,427

11,365

12,531

6.9%

Singapore

329

358

367

382

397

4.8%

India

750

789

803

847

902

4.7%

New Zealand

474

506

521

533

564

4.4%

Australia

2,074

2,071

2,051

2,125

2,132

0.7%

 

Jean Stephens, Chief Executive of RSM, comments: “While most countries have seen the number of active businesses increase over the last five years, for a significant number the annual growth rate is sub two per cent.”

“Business is vital to jobs and prosperity, but with many countries – particularly in the West – cutting public spending and raising taxes, creating and growing a business has become more challenging than ever before.”

She adds: “Governments can do more to encourage entrepreneurship and help businesses thrive. In many economies, lack of external finance is a major impediment to starting and growing a business. Since the financial crisis, banks have de-risked and come under pressure to hold more capital in reserve, which has hindered their ability to lend to businesses.”

Neil Cribb, Director of RSM Bird Cameron in Australia says: “Australia was relatively insulated from the global financial crisis, but with the mining sector slowing down, the outlook is a concern. Cuts to interest rates and a decline in the value of the Australian dollar are helping some businesses. However, the costs of doing business in Australia, including high income tax rates, high labour costs and low productivity and compliance costs are still major issues, in addition to the current uncertainty in the political environment. The corporate tax rate in Australia is 30 per cent, for example, whereas in Singapore it currently stands at 17 per cent and in Hong Kong it is 16.5 per cent. This remains one of a number of important factors when businesses are deciding whether to invest in Australia.”

* 2007-11 (most recent data available)

-ENDS-

About RSM
RSM is one of the world’s largest networks of independent audit, tax and advisory firms, encompassing over 100 countries, 700 offices and 32,500 people internationally. The network’s total fee income is US$3.9 billion.

RSM is the brand used by a network of independent accounting and advisory firms each of which practices in its own right. RSM International Limited does not itself provide any accounting and advisory services. Member firms are driven by a common vision of providing high quality professional services, both in their domestic markets and in serving the international professional service needs of their client base.

RSM actively engages in promoting and celebrating the very best in entrepreneurship, championing the role of the entrepreneur in today’s world economy and lobbying governmental and regulatory bodies to protect their interests.

RSM is a member of the Forum of Firms. The objective of the Forum of Firms is to promote consistent and high quality standards of financial and auditing practices worldwide.

www.rsmi.com

About RSM Bird Cameron
RSM Bird Cameron is the largest mid-tier accounting firm in Australia with national ownership and profit sharing and offers a full range of specialist advisory services, including business consulting and advisory, assurance and advisory, taxation consulting, corporate consulting and turnaround and insolvency. RSM Bird Cameron is a core member firm of the RSM network.

www.rsmi.com.au

Polycom SpectraLink 8400 series available now in Australia

Melbourne, August 9, 2011Wavelink, distributors of Polycom’s voice communications solutions, has announced the availability of Polycom’s next-generation Polycom® SpectraLink® 8400 series handsets for wireless voice and data applications in Australia.

The Polycom SpectraLink 8400 series are the first in the industry to feature:
* a revolutionary standards-based application platform
* the most reliable form factor for enterprise use
* an integrated barcode reader
* Polycom’s renowned voice quality
* the industry’s broadest interoperability with 802.11a/b/g/n wireless infrastructure and market-leading unified communications (UC) platforms.

The SpectraLink 8400 series handsets are designed to improve productivity and responsiveness of mobile workers, meeting the critical communication needs in the healthcare, logistics, and retail industries, and deliver the industry’s lowest total cost of ownership – up to 33 per cent lower than competing systems.

Ilan Rubin, managing director, Wavelink, said, “The SpectraLink 8400 series is set to transform mobile UC in the workplace by providing voice and data over Wi-Fi capabilities letting companies leverage existing networks and giving employees real-time connectivity for data applications.

“Wavelink’s customers now have access to industry specific voice over wireless LAN handsets that meet their particular needs.”

The Polycom SpectraLink 8440 delivers the mobile voice and application access needed in 24-hour environments through easy-to-switch battery packs, while the SpectraLink 8450 features an integrated barcode reader for voice, data applications and data capture from one device.

The handsets work with 802.11n and legacy Wi-Fi networks providing robust yet reliable voice and data capabilities over the corporate network and extending the mobility capabilities of workers. They feature an XML-based application platform for out-of-the-box access to enterprise productivity applications, and can integrate with Microsoft Office Communications Server to provide instant messaging and presence capabilities.

Ben Guderian, vice president of wireless solutions at Polycom, said, “For solution providers, the handsets fit a niche that regular Wi-Fi handsets or even smartphones can’t. The scanner on the 8450, for example, is industrial grade and built for constant and heavy use.

“Barcoding is becoming critical in industries such as healthcare, with electronic medical records and medication administration. Scanners are available on smart phones, but it can take a while for a smart phone to power up, which just wouldn’t cut it. Plus healthcare workers need something that can read barcodes that may not be flat, such as on wristbands – something smartphone scanners are incapable of doing.

“Retail environments, and, indeed, any environment that does a lot of barcode scanning, are a good fit for these handsets. Best of all, they integrate with most industry access points and PBXs, so companies don’t have to perform a full-scale rip and replace to use the technology.

“It’s a compelling ROI in that it doesn’t cost a lot to implement the 8400 series handsets to improve the way people do business,” Guderian said.

-ENDS-

About Polycom
Polycom, Inc. (Nasdaq: PLCM) is a global leader in unified communications solutions with industry-leading telepresence, video, voice and infrastructure solutions built on open standards. Polycom powers smarter conversations, transforming lives and businesses worldwide. Please visit www.polycom.com for more information or connect with Polycom on Twitter, Facebook, and LinkedIn.

About Wavelink
Wavelink (www.wavelink.com.au) specialises in the supply, marketing and support of a range of leading edge business IP, wireless, communication and network security and access solutions. Wavelink distributes a range of products from Polycom, Meru Networks, Digium, Cisco, AirTight, Nomadix, Identity Networks and Bradford Networks. For more information please contact Wavelink on 1300 147 000.

SME owners still optimistic but not retiring any time soon

Perth, July 6, 2010 – Accounting firm RSM Bird Cameron’s fourth thinkBIG benchmark study into Australia’s small-to-medium enterprises (SMEs) found that, for the second year in a row, one in five SME owners have delayed their exit date from their business because of economic uncertainty.

Business owners reported little change in their plans to exit the business from 2009, with more owners expecting to continue working after they dispose of their business compared with three years ago.

According to the study, SME owners are quite optimistic about their business’s medium-term prospects but remain concerned about cashflow management and continue to be more aware of the stress associated with managing their business.

More than half of business owners in the thinkBIG study do not expect to see any improvement in the availability of finance in the short term, underlining continuing uncertainty in the sector.

“thinkBIG found that business owners faced tougher trading conditions over the last two years, with nearly a third recording no revenue growth or a decline in revenues, up from the 2009 result,” said Terry Rodoni, director, Business Solutions, RSM Bird Cameron
“On a brighter note, business owners in regional centres experienced the strongest revenue growth.

“SME owners have told us they will increasingly improve efficiency through technology over the next 12 months, although many will continue to rely on price increases or overhead reduction to protect their margins,” Terry said.

Business owners more optimistic about next 12 months
The thinkBIG survey revealed there are some modest signs of a more optimistic outlook over the next 12 months, with fewer SME owners expecting to reduce personal drawings and fewer expecting to reduce staff. However, nearly a third of owners are not sure whether their business will grow over the next two years or do not believe it will grow.

The study shows that SME owners tend to be high on enthusiasm but many find it difficult to set aside time for planning. In spite of the difficult trading conditions over the last two years, SME owners remain satisfied with their decision to run their own business.

Planning still not high on the agenda for SMEs
Consistent with thinkBIG 2009 study, more than half of SME owners do not plan their business on a formal basis and the majority has no plans to invest a proportion of their retirement funds into superannuation after leaving the business.

“Business owners that make the commitment to undertake formal business planning are more likely to grow their business,” Terry said.
“thinkBIG found that significantly more businesses that plan their business recorded revenue growth compared with businesses that do not plan, in spite of the difficult trading conditions over the last two years.”

Superannuation unsatisfactory
Business owners’ satisfaction level with their retirement provisions has remained low over the last three years, with only one in 14 owners completely satisfied.

“SME owners continue to be highly dissatisfied with their superannuation provisions for retirement, which is not surprising given thinkBIG found that only a third of owners expect to invest some proportion of their retirement funds into superannuation after leaving the business.”

thinkBIG found that one in seven SME owners was impacted by government fiscal packages over the last 12 months, with nine percent reporting they brought forward an investment decision and six percent making a new investment.

About RSM Bird Cameron
RSM Bird Cameron is the largest mid-tier accounting firm in Australia serving business with technical and commercial expertise in agribusiness and SME’s and a full range of specialist corporate and business advisory services including succession planning, superannuation, assurance and advisory, corporate finance, taxation consulting and turnaround and insolvency.

RSM Bird Cameron is a core member firm of RSM International, the sixth largest accounting and consulting organisation in the world.

thinkBIG 2010 fast facts

Impact of the global financial crisis one year on
– Around one in nine SME owners faced extra scrutiny from external financiers in the last six months (12%), compared with one in seven owners in 2009
– This year SME owners reported facing tougher trading conditions over the last two years, with 32% experiencing no revenue growth or a decline in revenues, up from 26% in 2009
– SME owners in regional centres reported stronger revenue growth over the past two years compared with businesses in capital cities and rural areas, with 76% in regional centres reporting growth versus 66% and 61% respectively in capital cities and rural areas
– One in seven SME owners said their business was impacted by government fiscal packages over the last 12 months, with 9% reporting they brought forward an investment decision and 6% making a new investment
– Around a third of SME owners said they would increase investment in plant and equipment if the investment allowance were re-introduced (32%), although 34% said they would not increase investment and 34% are unsure

Business outlook
– A majority of SME owners expect their business to grow in the next two years (69%), although nearly a third are not sure or do not believe it will grow
– A majority of SME owners do not expect to see any improvement in the availability of finance in the short term, with 56% responding negatively when asked whether financing the business will be easier in the next 12 months
– There are some modest signs of a more optimistic outlook over the next 12 months, with fewer SME owners expecting to reduce personal drawings (37% in 2009 versus 27% in 2010) and fewer expecting to reduce staff (18% in 2009 versus 8% in 2010)

Business planning
Starting the business
– The desire for independence and work/life balance continues to be more important to SME owners than creating wealth. A majority of owners started their business because they wanted to be their own boss and 47% said it was because they wanted a better work/life balance, compared with around a third who said it was to create wealth

Planning the business
– Although significantly more businesses undertake formal business planning than three years ago, more than half of SME owners in this year’s study said they do not plan their business on a formal basis (61%)
– There is still a considerable gap between the planning practices of micro-SMEs and larger SMEs. Significantly fewer owners of SMEs with one to two employees reported a formal business planning process compared with larger SMEs
– Also, significantly fewer owners of SMEs in rural areas undertake formal business planning
– SME owners who undertake formal business planning are reviewing their plans more frequently than three years ago, which may be in response to the changing economic conditions over the last 18 months. Today, nearly two-thirds of this group completes a business plan every year (66%), although 18% complete a plan less often than every two years
– SME owners who undertake formal business planning continue to focus their attention mainly on business goals and financial planning. Three-quarters (76%) have a marketing plan, but only half have an operating plan or a management plan (54% and 48% respectively)

Growing the business
– More than two-thirds of SME enterprises experienced some form of growth over the last two years, although nearly a third experienced no growth or a decline. The largest group of SME owners reported growth in the range 1%-14%
– Businesses that plan are more likely to grow. Eight out of 10 SMEs that planned their business experienced revenue growth over the last two years compared with six out of 10 that did not plan
– Many SME owners continue to rely on reinvested profits, with over a third of owners nominating this as their main source of funding for growth. However, around a fifth continue to rely on foregone salary and bank debt
– Although SME owners continue to show faith in their businesses, with more than a quarter saying there are no barriers to growth (26%), similar sized groups identified skill shortages, lack of market opportunity and access to capital as key barriers (26%, 23% and 20% respectively)

Exiting the business
– Consistent with 2009, nearly one fifth of SME owners (19%) reported delayeding their exit date from the business because of the impact of economic uncertainty over the last two years
– Similar to their sentiment in 2009, SME owners also expect to work longer. Of the 28% of owners with an exit plan, seven out of ten think they will continue working after they exit the business compared with six out of 10 in 2007
– Around half of SME owners with an exit plan expect to exit their business some time in the next four years
– One in six SME owners with a plan to exit the business is not sure of the proportion of their retirement funds that will go into their superannuation (17%), but this figure rises to 46% for owners without a plan
– In 2010, 34% of SME owners with an exit plan said the proceeds of their business upon exit would be the primary source of their retirement funds, compared with 26% in 2007

Passing the business on
– Of the group of SME owners who expect to exit their business by passing it on to a family member or have another exit strategy, nearly one in two is unsure of the proportion of their retirement funds that will be invested into superannuation, which is consistent with the high level of uncertainty about retirement planning reported in 2009
–  One in seven SME owners who expect to pass on their business has delayed retirement because of the economic downturn (14%)
– Only a quarter of SME owners who expect to pass on their business have a succession plan (24%), although relatively more owners in regional centres have a plan compared with owners in capital cities and rural areas

Superannuation planning
– Only a third of business owners (34%) will invest some proportion of their retirement funds into superannuation after leaving the business
– Three years on from an earlier study in 2007, SME owners continue to be less than satisfied that their total superannuation provisions will be adequate in retirement, recording an overall satisfaction rating of only 4.4 on a scale of 1-10, where 10 represents complete satisfaction
– Owners of larger SMEs with 20 or more employees reported the highest level of satisfaction with the adequacy of their superannuation provisions, recording average scores of 6.0 and 7.9 (20-49 employees and 50+ employees respectively)
– A quarter of SME owners (25%) are not at all satisfied with the adequacy of their superannuation provisions, similar to the result reported in 2009
– Only one in 14 business owners (7%) is completely satisfied with their superannuation provisions

Use of external advisors
– Around half of SME owners sought help from external advisors in the past, with business planning and superannuation advice proving the most popular, followed by retirement planning advice
– The most commonly used external advisors are accountants, with nearly half of SME owners reporting they used an accountant in the past for exit planning and over a third using an accountant for business planning. Business owners also reported seeking advice from financial planners for retirement planning and superannuation planning