Charter of Contractual Fairness
On 1 July we launched our Charter of Contractual Fairness

We have heavily drawn the principles of contract fairness from the new consumer unfair contract protections laws. If it's fair for consumers, it's fair for small business people - the self-employed and independent contractors.

We are currently writing to Australian corporations asking them to commit to contract fairness in their dealings with small business people.
Election Face-off 2010
Here's how the 2 sides currently shape up for small business/self employed people! (10 July 2010)
Gillard's ALP

So far, they've told us "here's what we've done!"

• Started a superannuation clearing house
• Begun a small business online inquiry service
• Established a Small Business Advisory Committee
• New liability contract guidelines for government procurement
• National Business Name Registration
• A new guide for self-employed people
Abbott's Coalition
They've announced the first part of "here's what we're going to do!"

• A dedicated Small Business Minister who will be in Cabinet
• A new Small Business Ombudsman to handle and resolve small business complaints about the federal government
• The extension of consumer unfair contract protections to small business people
• Retention of the current self-employed (PSI) tax laws
• Stop small business red tape on Paid Parental Leave
• Mr Abbott's and Mr Billson's joint press release
What we've been asking for
• The extension of consumer unfair contract protections to small business people

• Retention of the current self-employed (PSI) tax laws. Our letter to the PM (28 May 2010)

Failure to fix unfair business contracts
ICA says "extend unfair contract protections for consumers to small business".

New laws:
Legislation #1 (March 2010)
Legislation #2 (June 2010)

Here's our summary of the situation.
How the legislation defines unfair contract terms.
Why small business people should have TPA protections from unfair contracts.
We need an answer on tax, please
We've made it quite clear that self-employed (PSI) tax should not be changed.

We've written to the PM for an answer, but we do not yet have a reply.

Tony Abbott has been clear. NO change!
Industry/Retail super funds must come out
The Cooper Review into superannuation says the big funds are not disclosing enough and must be forced to do so. This is vital. See Chapter 4.

Here's why workers' money is at risk if disclosure is not enforced.
Look after your retirement
The Cooper Review of superannuation says Self Managed Super Funds are good and need little change to existing arrangements. This is welcome. See Chapter 8.

The Report also seems to have stopped the attack against SMSF's.
Stand Up for Your (Contract) Rights!
We're monitoring contracts in general and promoting good contracts in particular. For example:
Another bad contract (Jun 2010)
One of the worst contracts we've seen (Jan 2010)
'Tom' versus DEEWR (Nov 2009)
But a positive development from government
Ken Phillips comments
And some interesting discussions
Central Banks on Debt
Since mid-May, central banks have been worried about sovereign debt. Click here for a list of useful links and summaries.
Problems with Phoenix companies
Two ICA members' tell their stories
ATO information on reporting suspect activity.

Govt's attempts to do something:
ICA comment

Newspaper comment:
The Australian
The Age/Sydney Morning Herald
Business Spectator

What 'Tom' thinks
What 'Jim' thinks
Dick Davies Writes...
"...the human fabric of the workplace precedes in importance that of technology!"
Dick Davies prods us to think about management, independence and motivation. Click here.
Stop Sham Contracts!
ICA supports the prevention of sham contracts. We monitor what's happening with them:
One person's story
Successful FWO prosecution (Dec 2009)
Info from Fair Work Ombudsman (July 2009)
First sham contract prosecution: ICA summary
Make a complaint to FWO
Business Spectator article
Read the debate
... Unquote
The Pessimists' Economic Views
(Posted January 2010)
We've brought together some pessimistic views about economics and likely economic trends in 2010:
US toxic loans
'US as sick as Greece'
Ken Phillips's summary
An 'IMF' perspective
Predicting 2010
Government debt a giant ponzi scheme?


Click to enlarge.

Ken Phillips on the debt equation


Watching Goldman Sachs
Rolling Stone magazine has blown the lid on Goldman Sachs:
Article 1 [July 2009]
Article 2 [April 2010]
Article 3 [May 2010]
Tax burden: UK versus Australia
Just as the UK is moving toward more sensible small business (contractor) tax laws, in Australia we're having to defend the progress we've made.
Laughing lawyers
You'll be amazed by the 'slips' that some lawyers make in court.
Four pieces of practical advice:
... from Martin Dowling


1. 2009---Tough Times!
The current economic situation is dire for many in business in Australia. This isn't new news, we hear it all the time!

The largest 20 to 25 first-world economies in the world are forecast to contract (reduce in size) by an average of 4% in 2009. Japan alone will contract around 12 to 13% in 2009---it spells trouble.

For small business it is probably even more challenging due to being last in the payment list of creditors and typically lacking the internal supports (a large HR base) of medium and larger firms.

What this means is that small business will have to be very vigilant and disciplined in its efforts. It will need to stretch its self (and its resources) like never before.

This means: reviewing activity with customers, getting in touch with previous customers, and making offers to existing and previous customers to stay or come back. Networking and catching up with contacts and friends in business will be crucial to keep the cogs and business activities turning over. Watching cash flow, amending payment terms with customers and being prudent with purchases for the business are very important to assure profitability and solvency.


2. "All I need to know is in my head---for my business (or business idea)"
I have been there and worked in the industry for so many years! I know all there is to know about whatever! I have heard it so many times. Sounds like a recipe for failure to me, particularly if the new business owner is under 35 years of age and relatively inexperienced in life and not well educated (or has been a poor student). They are generalisations, but they often come true.

Knowledge and maturity are keys to survival (not to mention success) in tough economic times (and even prosperous times). If you don't have these traits, align yourself with a mentor or trusted friend who does.

Knowledge of a market, the players (competitors) and what those that are successful do to be successful is key information. Knowing what the trends are in your market (locally and overseas) is also very useful to planning. How do you find this out? Research over a number of weeks or months.

Understanding where your knowledge deficits lie is important, before you commence business. Talk to some experienced small business people in your industry or unrelated industries about business activity and what they would do differently if they could do it all over again. This should reveal some good issues that a new player (market entrant) can learn from.

What is "in your head"---is just a starting point. It is not the entire business plan or method on how your business will operate. Get out of your headspace and see how much there is to learn before you commence. It could help you save money and improve a business opportunity!


3. My Accountant can help!
Generally speaking, accountants are a professional group from which many small businesses seek advice. Is this a good idea? Maybe not! Why?

Accountants tend to be very involved with historical or past business activities and tend to always be looking at what has occurred, as opposed to what might happen in the future.

Thus, they are generally not strong on future business strategies---a generalisation---yes, but it is quite common amongst accountants.

Accountants are involved in tax matters and basically provide tax advice to small business, not future strategies on new business activities. This is where small businesses need assistance from trained business marketing and strategic managers. They are a group who are trained to look at the future environment for the business and the industry it operates within. This is where opportunities will be created.

Seek out a marketer or business strategy mentor for assistance on the future. Accountants can do more than 'bean counting', but most are not trained in these other areas.


4. The Business Coach
Too often, many small business advisors, mentors and consultants come across the term and/or people who hang themselves out as 'Business Coaches'.

Many of these Business Coaches charge very high fees with little regard for the small or micro business's (the client's) capacity to pay. Many of the franchises in Business Coaching and the smaller independent Business Coach operators are 'rip-off' merchants with high fees (anything over $1,000 per month for under 5 hours of face-to-face contact) and little empathy for their clients.

It is a tough world out there, make no mistake, and there are Business Coaches taking advantage of many desperate clients. These Business Coaches offer no guarantees and generally produce expensive advice that is basically comparable to a university student project! (doing marketing 101 or business strategy 101).

Let's get real!

Take advantage of government-funded programmes (and many are accredited learning programmes) before expensive Business Coaches who offer a lot of hope but also a lot of gloss and pricey programmes. Find a family member or friend that is involved in small business and listen and learn from them.

Business Mentor---Offers a range of solutions without recommending any one particular solution.

Business Coach---Recommend solutions to a small business operator.

Consultant---Usually gets very involved in the small business and offers advice and recommends solutions (can also be involved with implementation) on an ad hoc basis.

If you do engage a Business Coach at some high set of fees, say over $1,000 per month, make sure you have regular reviews of what they actually deliver to your business in terms of real improvement(s). This could take two or three months for the first review, but don't be afraid to challenge them, as you may know more than them about the rigours of small business!

Perhaps a mentor or consultant could be a better option for you and your business, and offer better value. Check them out.


Would you like to ask Martin a question? E-mail your query to him at: martindowling@contractworld.com.au




Disclaimer
(ICA/Martin Dowling disclaimer: Please note that when you make use of ICA's free online small business assistance services there are limitations. Neither ICA nor Martin Dowling is providing professional accounting, legal, tax, financial or other advice. Our service is orientated to discussing practical ideas on practical business issues to help you make fully informed decisions, which are your own.)