Disputes about being paid, trouble with a digital service provider, contract battles and franchise disagreements are the top four issues facing small businesses over the past six months that the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has helped resolve.
“It has been a tough year for small and family businesses coping with cost-of-living pressures not just on themselves but their customers,” Ombudsman Bruce Billson said. “We can’t guarantee that every small business will succeed but it is our mission to provide all the help we can for those who want to start, grow or transform a business, and that no business fails because the owners didn’t know about something that might have helped.”
Billson shared that two out of every five requests for help from a small business related to a payment dispute, with being paid on time critical to the viability of most small businesses.
“Cashflow is the oxygen of enterprise but difficult conditions mean when one party is late in paying, it can cascade through the supply chain,” Billson said. “Sadly, too often that first party that is slow to pay its suppliers is a big business or a government department. Power imbalances make it difficult for a small business to pursue timely payment for their services.
“Research by my office shows 43 per cent of small businesses do not make a profit while 75 per cent of self-employed small-business owners working full time earn less than average full-time adult weekly earnings,” Billson added.
The Ombudsman noted that contract disputes ranged from cases where a small business was unaware of auto-renewals for goods and services to terminating agreements.
“Most small businesses in a contract dispute do not want to end the business relationship, they want to keep doing business but they often struggle to fix problems when they arise,” Billson explained. “We can give small businesses the skills – and sometimes case management – to resolve the dispute without ending the business relationship.”
The Ombudsman also noted the sharp rise in the number of disputes involving digital platform providers, pointing out that they have fundamentally changed the way in which small and micro businesses connect and sell to their customers, but that when there is a problem – such as a small business having their account shut down after being hacked – finding a solution can be a nightmare.
“Often there is no real person you can speak to, and the automated systems prevent you being able to escalate the issue,” Billson said. “Hundreds of small business have sought our help in dealing with their digital provider to unlock their accounts so they can get back to doing business.”
In the franchise sector, cases have involved managing disputes about the sale of a business, fees and charges associated with the franchise, helping parties to amicably terminate agreements, and organising Alternative Dispute Resolution when other efforts had failed.
Other disputes pertain to insurance, telecommunications, banking and finance, cyber security and workplace issues such as health and safety, were referred to other relevant dispute resolution agencies because the Ombudsman’s legislation prevents the office from duplicating the functions of other Commonwealth, State or Territory agencies.
“We happily provide a type of triage service to receive the dispute and then assess whether we are best equipped to help or whether the small business will be best served by sending their case, with their permission, to the most appropriate federal or state agency,” Billson concluded.
