According to this year’s Late Payment Report, over 60 percent of invoices globally are paid late. The report, conducted annually by MarketInvoice.com, looked at a sample set of over 30,000 records, finding that the issue of late payment in the small business sector is on the rise, and has been for a number of years – particularly in Australia, which ranked the worst. In the world.
On average, it was found that the everyday Aussie pays their invoice 26.4 days late, creating a knock-on effect for small business owners, who then also pay their own bills late – it is a nasty cycle and has caught the attention of Small Business Ombudsman Kate Carnell, who is exploring an enquiry into the possibility of speeding up payment terms for Australian businesses.
There are over two million registered businesses across the country and the only industry that seems to be largely unaffected by late payments is the technology and startup space, most likely because of the focus on SaaS and upfront payment business models where customers and clients are expected to be up-to-date with payments or risk access to their services being denied in real-time. Tech companies that live in the cloud automate these processes pretty efficiently.
Although small business is generally leveraging digital technology better than ever, the culture within certain industries means that moving to a business model such as the one above can be a real challenge, not to mention a time consuming process that most owners of small businesses don’t have.
Small Business First is a community-centric platform that aims to bring small business owners across the country together so they can discuss the problems affecting them, gain access to exclusive offers from utilities and suppliers that lighten their outgoing monthly finances, and access straight-forward free business education that looks to help them be better business operators.
The startup is a spin-off company from Pinstripe Media, founded by David Koch. With Pinstripe producing online and television content about small business and personal finance, the investment is a natural extension for the company to have as part of its portfolio. The platform will be lead by Rajhev Rajkumar, newly appointed General Manager of Small Business First. Rajkumar was previously Product Director for the Financial Review Group at Fairfax.
User growth and high quality engaging content are two core focus areas for Rajkumar right now as he looks to grow the platform and position it as Australia’s premium online small business destination.
“[We] are driven by the mission to help Aussie small businesses be more successful,” said Rajkumar.
“It’s been humbling to hear from members who have already benefited from joining our community over the last month since we soft launched. Business owners tell us how every cent of cost-cutting makes a difference to their bottom lines, so we’ve made membership free.”
Although free for users, the platform has chosen to immediately implement a business model that has seen it become revenue-positive in quite a short amount of time. Integrating bluechip service providers for small business is a clever move by the startup, which charges the company for the partnership, but also in some cases takes a clip-of-the-ticket when a user signs up or switches over to that new service provider.
Energy Australia is the first company to come on board as the platform’s first foundation partner, offering small business owners in Australia exclusive discounts and deals on their energy and gas, and helping them to better understand their energy consumption habits with access to the company’s tools.
“As the foundation partner of the Small Business First community, Energy Australia will offer members access to exclusive offers on their electricity and gas accounts,” said Kim Clarke, Chief Customer Officer at Energy Australia.
“Small Business First community members will also get to leverage Energy Australia’s experience to manage their energy consumption, so they’ll have more control over the source of their energy, whether that’s from renewable or traditional sources, and how much of it they use.
“We’ll also make available the latest thinking and content to do with energy usage, advancements in technology, and insights into the energy industry. There will be tips, tricks, and guides to help Small Business First community members become better at managing their energy consumption. Our aim is to help take some of the hassle out of running a small business, so small business [owners] can get on with what [they do] best,” Clarke said.
The partnership comes on the heels of Energy Australia’s strategic $9.3 million investment into Brisbane solar energy startup Redback Technologies, through which it will look to collaborate with the startup on product development and help market Redback’s products to its customer base.
From an impact perspective, Small Business First hopes to be seen as a place for anyone in the small business community to launch action around any topic or issue that is affecting them or their industry – obviously, the invoice payment terms issue is a great example of that. Small Business First has a built-in petition feature that is designed to help activate users to be their own champions and show they have a voice.
“I’ve grown up around family and friends who are part of the two million small businesses owners in Australia,” said Rajkumar.
“Whether or not they operate from home or their stores, these businesses are often an extension of home life for the owners and their families. Our aim is to see improvement in key macro metrics such as reducing the exit rate of small businesses and increasing small business retention and employment.”
Featured Image: SBF Team – AJ Koch, Angus Woods, Rajhev Rajkumar, Jamie Trad | Source: Supplied
Disclosure: Pinstripe Media is also an investor in Startup Daily.