Tower Blog

A blog about smart POS software for independent small businesses.

Category: Small business (page 12 of 13)

The violation of theft

We have been working with a independent retailer colleague this week – helping them navigate an employee theft situation. No matter how many times we get involved in such a case the feelings are the same. The business owner feels violated and that they, somehow, are to blame for the theft. Some are so upset that they shutdown and need time off from the business. Others want to strike out and inflict harm in some way. Rational thought is hard to find for those directly involved.

While this case involved less than $1,000 in the last week, it is what was taken prior to that which drives the emotion. The owner knows they are missing around $60,000 and an employee admitting $650 in a week gets close to matching that amount allowing for their understating of what they have stolen.

The difficult aspect of employee theft here in Australia is how you navigate dealing with it in the context of unfair dismissal laws. Even though there is new legislation the employer groups are cautioning small business to be careful.

Beyond the money, the cost of theft in this and other situations is owner energy and confidence it steals. I have seen situations where a business owner sells up as a result of the theft. In the situation this week it was a family member who stepped in and demonstrated impressive strength which allowed the owner to step back and regroup. These are the personal costs of employee theft.

Months later I see employers looking back in frustration at the justice system – the time and money it costs to bring an employee to justice means that many instances go unreported. Most small businesses do not have the resources necessary to follow a case through.

Our role in all this is to help small businesses discover employee theft sooner and to have easy access to police grade evidence to enable swift and safe action. We’ve seen that achieving that can reduce the stress – the key is getting small business owners engaged in using the tools they have access to. Too often people don’t want to know the extent of a theft problem.

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Google mall, the landlord emerges?

Google has been good for advertisers – small and big business alike. The decision to buy a stake in AOL and give preference to certain ads, effectively based on spend, demonstrates Google’s pragmatism. It also shows Google acting more as a landlord than the Google of the past.

One thing I and others liked about Google was the fairness of how it effectively auctioned advertising. Thanks to the AOL deal all advertisers are not equal. Small business may be the loser.

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Small business doing well online this Christmas

This report from the New York Times quotes Forrester Research in talking about significant growth for small business online. It says that small business is set to get 45% of online sales this Christmas compared to the 42% it achieved last year.

Call me a cynic but the more there is competition for real-estate in the form of online ads at Google and the like, the cost of the real-estate will rise.

This is why its important for small businesses to have a multi layerd strategy for attracting traffic and sales. Relying on Google, Yahoo or similar puts you at the mercy of their pricing. Sure they should be in the mix and it’s easy to use them to build traffic but the key is to reduce reliance once your business model is operating efficiently. No cost visits are far more preferable than a per click cost visit.

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How to spend the $11billion budget surplus

The government could consider investment in small business when deciding what to do, if anything, with the forecast $11 billion budget surplus which was announced this week:

  • Offer a small business investment allowance for capital investment where productivity and competition gains are expected. This would cover investment in plant and equipment, IT and the like. Provide faster write off and a bonus 40% tax break. This worked well in the Fraser years. I’d suggest that the break applies to businesses with a turnover of less than $15 million. Key to the tax break would be a rule that the maximum benefit would be available if the capital is purchased from another small business.
  • Pay a cash rebate for any new permanent positions created by small business. This could be more valuable than the first home buyers scheme.
  • Put more funds into small business ombudsman or similar programs in the states so that small businesses have more champions fighting for their rights.
  • Provide matching funds for any employee training funded by a business beyond $500.00. The better trained people are the more effective they become and the more likely they are to stay at work.
  • Pay a business start up grant of $20,000 for your first business start up, $15,000 for your second and so on. Entrepreneurship is crucial to a growing economy.
  • Cut company tax for small business.
  • Big businesses access many tax and other breaks which, in many cases, keep them going. Small businesses would use similar benefits well, since their owners are less like to take the cash and run – given that they are in business for independence and lifestyle ahead of money.

    The ideas above are just a start. It would be good to see the government engage in dialogue on this.

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    The value of service

    We started a new business four months ago. Something small which does not detract from our core business but is a nice add on nevertheless. (We did this to extend our knowledge of pure online operations in advance of enhancements to our point of sale software.) Anyway, this new start up is being promoted solely through sponsored links with Google and Yahoo. It’s in a competitive marketplace where price and service are key. When customers go to our website and order we advise how long delivery will take. The delivery time estimate is the actual period plus a day of grace in case things go wrong. We’re clear on our timing requirements to make shipping cut off each day. And our price point is keen.

    The result, four months on, is great growth every month. We’re about six months ahead of where we expected to be at this point.

    The really good news, however, is the customer feedback. Since this is purely on online play we had expected only limited return business. Don’t know why. Each day we’re getting at least one and often more email(s) from customers raving about the service and letting us know that they are actively recommending us to others. We can see from direct access to the website, compared to click throughs, that this word of mouth is working for us.

    The experience, even though only four months old, reinforces to us the importance of customer focus. Put them first every time, deliver on time and for a fair price and the business will grow and grow. This is the small business advantage. A small business should beat a big business of customer service every time.

    We’re revising our plans, working on making our service even better and building a business plan which compressed two years planned growth into six months.

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    Customer loyalty programs: small business versus big business

    In my retail newsagency customers who purchase 11 magazines in eight weeks can choose a magazine up to the value of $10.00 free of charge. The average magazine purchase is $4.50 and the average redemption $5.00. This equates to a 10% discount.

    Over at Coles, if you purchase $49.50 worth of magazines, you accrue around 10 FlyBys points. FlyBys points can be redeemed for gift vouchers. You need 13,500 points for a $100 voucher. That equals 675 points for my free $5.00 magazine. So, I need to spend $3,375.00 to get a free $5.00 magazine.

    Now from time to time FlyBys offers bonus points but a check of the Coles website and considering the range of product in store, current bonus items account for less than 1% of the products they carry.

    Which deal is better? The Magazine Club Card I offer in my small business newsagency or the FlyBys offer from Coles?

    I’ll let you decide.

    State Governments ought to regulate to force businesses to prominently publish in store and on receipts a present value for each point accrued.

    Small businesses, like mine, ought to promote the benefit of their loyalty campaigns by directly comparing the reward per dollar with the likes of FlyBys. While occasional bonus offerings make FlyBys points more attractive, this is not happening enough. Most small business loyalty programs I have seen reward sooner and with more value than their big business counterparts.

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    Dragon’s Den renewing interest in entrepreneurship

    I haven’t seen the Network 7 Dragon’s Den TV show yet but plenty of people have told me to see it. Entrepreneurs pitch their ideas to the ‘dragons’ inviting them to invest. I am intrigued that so many people have told me to see the show. They go on to talk about specific ideas pitched and why they would or would not work. Some then go on to tell me their ideas for a business. [I guess they’re talking to me thinking I would be into the show – I’m not that much of a TV watcher – as I own three businesses and am close to the launch of my biggest and scariest start up yet.]

    If my experience is anything to go by, Dragon’s Den is awakening entrepreneurial discussion and motivation like nothing I’ve encountered in recent years. This has to be good for business and for the economy. Getting people to make their dream a reality encourages others to dust off their ideas for a business. Anything to boost confidence in entrepreneurship.

    Just when I thought the majors were stifling the entrepreneurial spirit along comes something like this. Well done Dragon’s Den – I promise to watch next week.

    Starting a business from scratch is enormously challenging no matter how big or small. The emotional and personal stakes are always high. To have more people understanding of these and how much of oneself is put on the line is good. It humanises the business birthing journey.

    What would be interesting to me is some kind of knockout tournament (on TV) based around entrepreneurial skills among some of the people featured on Dragon’s Den and some big business people. Let’s see who has the strongest passion for building businesses and the best strategy.

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    Small business blues

    Howard Bursen wrote Small Business Blues in 1984. It has featured on many folk albums since. Small Business Blues is one of the first songs I can recall warning about the impact of globalisation.

    Then they put in a mall selling all kinds of junk
    Like stamped our plastic shoes
    And the hard working folk watch their business go broke
    We got the small business blues

    This song is as relevant today as it was 20 years ago. More so even.

    They’s squeezing people right out of business
    In the name of free enterprise
    There’s 10 million folks out of work today
    And the corporate skyscrapers rise

    Small business is doing it tough today. I’ve had my own business for 25 years and this year have been asked to help (in one way or another) more small businesses in trouble than ever before. While some are in trouble because of poor management many are in trouble because they cannot compete with cheap imports or big businesses eliminating service, cutting costs and selling cheap.

    Just look at any of the major retail outlets. Despite what their TV commercials say, smiles and service are gone. They cost too much. At the small businesses which compete with them the smiles are there because that’s where they understand the value of customer service.

    We can bleat and moan all we like about our big business competitors. The only action which counts is the action of spending. The less we, as small business owners, spend with our big business competitors the more pain we inflict. We could consider Howard Bursen’s Small Business Blues from 20 years ago as a call to action this Christmas, a call for us to support small business with our own gift buying.

    This was all on my mind today reading the page one story in the Australian Financial Review about big business wanting to ensure that their multi billion dollar tax breaks are safe. Big business gets all the breaks and support from government. Small business gets a pittance by comparison. Again, the only way to protest is in our spending. Ignore them with your spending and they may get the message.

    Tell your friends.

    Don’t say America’s gone lazy
    It’s the economy’s gone crazy
    And if we don’t make a change we’re gonna lose
    We got the small business blues

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    The frustration of banks

    Our software company processes anything from five to ten times the value of our retail business in credit card and eftpos transactions yet our retail business has fees which are 25% less than our software company. After pleading with the bank to provide more equitable fees for our software company we’re still a way off reasonable progress. Only the threat of moving to another bank gets them interested enough to at least consider some movement.

    We’ve been with the same bank for almost 25 years. It’s been a good relationship. However, the hoops we’re now having to jump for even straightforward business mean it may be time to look around.

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    Wal-mart, Australian workplace reform and a great new documentary

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    This movie has just been released in the US. It does not have a release date here in Australia yet. I bought my copy through amazon.com.

    I didn’t know what to expect when I started watching this film. I was wary of some recent movies in this big corporation attack genre recently which have occasionally allowed emotion to get in the way of facts. Documentaries attacking any business cannot afford to get a single fact wrong for doing so taints the whole project.

    While I have yet to see any response from Wal-mart, this film presents its information through the voices of ‘witnesses’ in such a way that the likelihood of truth is very high. And that’s what makes this film so depressing. Wal-mart is not good for many of its employees, the consumers it sells to and the overseas areas where its low paid manufacturing work force is sourced. It’s health, security and tax track records seem to be appalling – against the backdrop of stellar profits.

    The film finishes on a bright note documenting the success of many communities fighting plans by Wal-mart to enter their town. It reminded of the protests recently at Maleny against Big W coming to town and the protests by pharmacists trying to stop Woolworths getting pharmacies in their supermarkets.

    I’d suggest that watching WAL*MART the high cost of low price is essential for anyone who owns or works in an independent retailer or any small business for that matter. Despite the depressing data presented, the film is a call to action to individuals and communities across the country to be socially responsible and stop the pursuit of size and profits at all costs. It gave me hope.

    Watching this film should be mandatory for all federal parliamentarians as they consider the workplace reform changes. They have to decide whether they want Wal-mart work practices here.

    Besides the giant Coles and Woolworths corporations, in Australia there is another corporation acting in some ways in a Wal-mart like manner is the government owned Australia Post. They are sourcing more product in China and at what cost to employees there? They have a retail development strategy which hurts independently owned retailers. They enter a space already well catered for and take business under the umbrella of their government protected brand – leveraging an unfair advantage.

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    Workplace reform disadvantages small business

    The workplace reforms which seem likely to pass through the Australian Parliament this week disadvantage small business because small business owners are, in my view, more prone to decisions of the heart whereas big business managers can only be driven by shareholder return.

    Small business owners take many factors into consideration in making decisions including their own return. However, other factors such as the impact on the community, impact on employees, lifestyle etc all play a role in day to day decisions. Across at big business it’s more black and white and this is why the workplace reform legislation disadvantages small business.

    Sure there will be some small business owners who use the legislative changes to cut labour costs. Many will not as they consider fair pay to be pat of the contract they have with the community at large. Big business is not, in my view, as socially responsible and will therefore achieve more of a labour cut and this will help them price compete more effectively against small business.

    Okay so it’s another big business versus small business rant. Be that as it may, the logic of my argument is sound.

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    Finding good employees

    We’re about to start looking for someone to join our help desk to fill a vacancy created as a result of a promotion (always a good thing). I’ve started playing with the text for an ad and it struck me how frustrating it has become. I bet that within 7 days of placing the ad online I’ll have more then 200 applications. Most will be lazy applications – a resume sent by an applicant direct via Seek. No cover letter, no effort checking the detail of the ad to make sure they are a good fit.

    I reckon we’re ready to move beyond resumes and into vacancy ad responses that use some of the rich tools people have easy access to. Anything to make the short listing process more certain. So I’m toying with establishing some rules and refusing all resumes.

    I want to hear and see candidates talk. I want to see their answers to some questions. How they communicate and their interest in some topics is of more value to me at this stage than anything a resume can tell me.

    Then tonight in a fast food drive thru line I realised that I really should do is poach someone. You know, see the perfect candidate and see if they’d be interested. In the type of role we have attitude, communication and focus are key. Knowledge used in undertaking the work can le learnt whereas the other three skills cannot. So, in this drive thru line I encountered the ideal candidate. Multi tasking, happy, customer focused and he left me with the feeling that he meant what he said – none of the usual drop as they step through the corporate 10 point sales dance. The trouble is that I was out of the line and on the way home when I realised I’d missed an opportunity to ask if he was looking for a career change.

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    Major suppliers thwart cost reduction in small business

    My company serves over 2,000 small businesses and through our software they process data from over 80 suppliers. Electronic invoices and statements are crucial to cutting costs out of the back room of small businesses yet major suppliers refuse to provide data in a form which enables this.

    That these big business suppliers get away with such shoddy treatment of small business is appalling. They do get away with it though. Why? because many in small business don’t know any better.

    We’re lobbying on behalf of our customers and while there are some wins, too many major suppliers refuse to actively engage with small business on the IT front. It seems they prefer ignorance as a strategy for ensuring small business customers don’t have the data to enable better decisions.

    Okay I accept it sounds like a conspiracy theory. But why else would a major supplier stick with an IT strategy which costs each small business customer more than 8 man hours a month when adopting ome simple changes would cut that to less than one man hour a month. The seven man hour saving may not be much but once you multiply that across, say, 2,000 stores you have a saving of at least $250,000 a month.

    Big business can help small business cut operational costs by providing better IT links.

    I’m not about to name names here – I’ll leave that for one on one lobbying. The companies involved, however, are high profile names in several marketplaces.

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    Coles starts fuel price war. Is it worth it?

    14 cents off a litre of fuel the posters claim. It looks fantastic. But then you have to buy this and that and redeem these points and then you get the 14 cents off. The details are here.

    This campaign is a perfect example of why the various state governments should introduce regulations requiring disclosure of the real value of each point accrued at the time of purchase so the consumer can know how much their business is valued. My earlier blog post on this is here.

    The Coles campaign is enticing but the fine print confusing. How much am I really saving? For example I have to convert 1,000 FlyBys points to get 10 cents off but how much do I have to spend to get the 1,000 FlyBys points? Okay there are some special deals around right now which offer good FlyBys points. But in the main you have to spend plenty to get to 1,000 points. Coles has an obligation to be more transparent with consumers about their campaign.

    Small business owners can make ground here with their own campaign about real rewards for real loyalty. Coffee shops, newsagencies, pharmacies – many have in store loyalty campaigns which deliver substantially better value than the Coles deal. But consumers can’t tell because of poor government regulation and because small business owners don’t tell their customers how good their deals are compared to the Coles deal.

    I have a great loyalty program in two retail shops I own. I’m planning a better than Coles promotion to underscore the difference between what I offer and the massively promoted Coles offer.

    On the software front, we’re going to tweak our loyalty tools to help small business owners better communicate with customers about the real value of each point.

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    How do you engage small business owners to be business owners?

    At Tower Systems create software for independent retailers. We’ve been doing this for almost 25 years. We serve over 2,000 clients across Australia and New Zealand.

    The biggest single challenge we have on a day to day basis getting our clients to use our business management software beyond the most basic cash register replacement type functions.

    While many of our clients engage with the software and push it to its design and capacity boundaries, many do not and remain oblivious to what’s actually happening in their businesses. It’s like they enjoy owning the business but don’t want to understand. Some expect the software to understand for them. Others, well I don’t know.

    Every day in our business we talk about how we can improve engagement with the technology for the benefit of client businesses. It’s somewhat of a holy grail. We care about it because of our long history in the marketplace. We also care about it because of our affinity with the small business space. We believe in small business and will champion it at every opportunity.

    To deepen engagement we have tried free training sessions; newsletters; online forums; trade shows; business performance analysis and face to face visits.

    What we have found works best is face to face contact. It’s only through this that we can see whether they are good users or bad and whether they are serious about their business and are prepared to put in the necessary effort. Face to face we can measure how our pro bono effort will be received and valued and this will guide our investment. Of course the option is to ignore all this and just stick with making and shipping software. They may work for Microsoft. In the small business sector it’s all about engagement and that only happens when you are directly in front of the customer.

    So, we champion face to face one on one contact. This is where we shine and our customers learn the most. More often than not, through these face to face discussions we see people evolve and become more engaged in using the technology as a partner to drive the business.

    Software companies serving small businesses should consider face to face contact as a key part of their customer interface strategy. It pays for itself through referral business without any effort whatsoever. It’s also a point of difference as most software companies won’t have the drive or commitment to make it work. In our case I’d say more than half the growth we’re achieving is as a result of this effort at a better and more personal client relationship.

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    Self help group for new small business owners

    We get pretty involved with our clients, especially those new to business. Often they find themselves in difficulties they never imagined in the afterglow of deciding to become self employed. Too many major suppliers to these small businesses bully the new business owners to gain preferential payment treatment. This de-motivates the owners and speeds up problems for the business. Not enough of the larger suppliers I observe step back and genuinely work with a small business in trouble – and often these larger suppliers have caused cash flow and other problems through accounting mistakes and over/under supply.

    One solution I see is a self help group of new owners with experienced peer support and this is what we are establishing for our new owner clients. We are connecting new owners with some more experienced operators to check in with each other twice a week until the peer support person as certain that the new owner has a good grasp of all the pitfalls. We’ll support the group with free business analysis and regular phone and in person check ups to ensure that the business is in good hands.

    The four business owners already in the self help group are going well, two have turned the corner and have new energy for their businesses.

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    Loyalty marketing

    I’ve got the rules on my desk for ten difference loyalty schemes from major retailers and all are poor at best in terms of rewards. I’ve compared these ten schemes with ten from local small businesses and the small business loyalty programs are better by far. It is like comparing chalk with cheese. The small business schemes are simple to use and quick to reward. The national chain schemes require you to complete details and always use their plastic card with your purchase. (Of course this so they can find out your purchasing patterns.) The small business schemes like the newsagency magazine club card, the coffee shop card, the card shop card and the bakery buy 5 and get the 6th free are all about genuine reward.

    I would like to see the state governments introduce regulations requiring disclosure of the real value of each point accrued at the time of purchase so the consumer can know how much their business is valued.

    I know that if I spend $100 at one major department store I will accrue around 50 cents value in points for the sale. I know that if I spend the same amount on coffee I’ll get $15.00 worth of free coffees. If I spend $100 on magazines at my own retail business I’ll get to choose two magazines to the value of $10.00 each – that’s $20.00 value from a $100 spend.

    The lack of regulation is allowing the bigger businesses to get away with what I’d call loyalty theft. Small business groups ought to consider campaigns around how much better value of their loyalty programs.

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    Woolworths / Safeway and their smile TV campaign

    It’s interesting to see the latest Woolworths / Safeway supermarket campaign here in Australia. While there is a pitch about price, it’s really a feel good campaign about great service. Lots of smiling.

    It’s a great TV commercial. Breezy, upbeat. It sets high expectations which, if not met each time you visit one of their stores, invite harsh criticism.

    I don’t think people choose a supermarket based on a TV commercial focusing on great customer service or smiling. Those features are best demonstrated in store as that’s where I’ll lock the experience away to encourage the repeat visits. If you have to advertise that you do what should be basic retailing service then something’s wrong.

    Small businesses would do well to take this TV campaign as a reminder to focus on exceptional service. It’s true that exceptional service and a great shopping environment allows you flexibility on pricing.

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    On the trail of employee theft

    We spend a lot of time gathering evidence of employee theft in client businesses. We’ve developed some processes and rules of thumb which police in several states have found useful. The post recent case is in Queensland. In fact, one of our senior employees is out of the office for the next two days giving evidence at a committal hearing.

    What frustrates me about this case and so many like it is that our client had the tools available to see this happening and did nothing to mitigate his losses until they had mounted to a more noticeable level.

    The end result is more money stolen and us spending considerably more time helping the police and, now, the prosecutor.

    Frustration all round.

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    Advertising screen overload

    The retail world has gone advertising screen crazy. They are everywhere and in all manner of shops. There was a time when they were confined to supermarket checkouts, now they are deep within the store. Some are just visual, others have sound. Each is a flashy bouncy ‘come on’ enticing you to spend.

    I wonder whether retailers are going overboard. Small businesses are under pressure to bring more into their stores and that means that we as a software provider to small business are being asked to link into these screens and provide sales related visuals.

    I’m all for intelligent use of IT to drive sales. However, I wonder is small business could differentiate by providing a calm environment. An oasis if you will from the usual noise of retail. If a small business is noticeably more calm than a competitor will customer stay longer and spend more? I am sure that the marketing experts will disagree, in part because they need to be pushing the next big thing to justify their existence and in part because light and colour is more interesting than stillness.

    My point is that businesses contemplating these advertising screens need to consider what retail environment they really want to provide before copying the bug boys into the razzle dazzle.

    Maybe there is room for calm.

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    Workplace reform frustration

    I wonder how many other small business owners are frustrated with the Federal Government’s workplace reform changes. While I have not been able to escape the advertising blitz of the last month, I am yet to receive anything from the government, as a business owner and employer, which explains the changes.

    I’d much rather the government focus its attention on the challenges of small business in competition with big business as this poses a greater risk to employment in this country.

    Yeah I’m not happy with some aspects of our current industrial relations laws but there is no reason to strip away basic rights as these changes seem set to do.

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    Despair at small business and the lack of interest in business

    I despair sometimes whether small business has any hope at all against big business competitors. Not only in terms of operational costs (lease, labour and cost of goods sold) but also in terms of advertising buying power and brand discipline.

    The independence of small business, while admired by many, kills small businesses. The cost of reinventing the wheel in thousands of businesses even in the same sector daily makes of a debilitating overhead.

    My biggest concern relates to decision-making. Whereas national and international companies centralise decision making and base it on accurate and timely data, small businesses rely more on gut feel and while this may win on some situations in many it does not.

    I am concerned about this today because of another client on the phone and in trouble. While we will do everything possible to help them, the problem was evident six months ago in two or three crucial management reports available through our software. When asked by they don’t even look at such basic reports the response was “if I wanted to look at reports I would have stayed working for someone else”. I have looked at their data from six months ago as represented in these three reports and I can see falling traffic, the categories affected and even why the sales are falling.

    Now it may be too late because they have let one thing pile on another to the extent that they are in default with several suppliers. This business is their only source of income and it is backed by all of their assets.

    As I said, we will help them in every way possible. In the meantime, a question we have for ourselves is what could we do to have alerted them about the problem and if we had done whatever that is, would they have acted sooner? We have considered alters in the software and a range of other measures. However, it comes back to one key point – whether people using the software are businesspeople. Not even using some basic reporting tools is like driving a car while not looking at the road.

    We figure the best next step to encourage engagement is to tell stories like this one to our clients – to encourage engagement.

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    The Apple iTunes / Coles deal still rankles

    Big businesses move in circles many in small business cannot comprehend. Deals are interlocked favors which build layer upon layer and in a way which cuts out all other players.

    National and global corporation relationships are such that small business has no hope in achieving a level playing field.

    I’m not writing this to be critical of big business but to acknowledge the reality of the game. On the iTunes deal announced last week, Apple wants to sell more iPods, Coles has the retail network so it is logical that they enter into a mutually beneficial deal. Small businesses, like newsagents, never had a hope because Apple wouldn’t seem them on the radar as relevant. While newsagents have more stores than Coles, they lack the one think which Coles leverages exceptionally well our of their head office – market power.

    The only way small businesses and, specifically, newsagents, will be able to leverage in a way similar to Coles will be for them to create and or control products and services exclusive to their channel. It may be that the focus is on premium service, for example – service so good that customers rave about it. If newsagents can deliver that and have customers talking up the line that they prefer to deal with newsagents then suppliers will want to tap into the goodwill built through such service.

    I appreciate that this is less tangible than an exclusive product as such. However, it is something which newsagents and, indeed, all small businesses, can own today. But it’s a chicken and egg situation. You need great traffic to be able to serve enough well so they rave about you and you only get the traffic if you have good current product and right now you’re only getting this if you’re a big business mate and doing a reciprocal deal.

    Hmmm…

    Apple has tainted its image by doing a deal with Coles Myer and hopefully consumers will see it that way and not purchase recharge at Coles stores.

    In the meantime it would be good if our politicians researched deals like this from a policy perspective and assessed whether they are in the best interests of the consumer. The last time parliament research anything like this was in the late 1990s. Small business is not on their radar it seems.

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    Coles Myer, Apple and the social responsibility of cutting out small business

    Coles Myer and Apple have done a deal giving Coles group stores exclusive access to selling a prepaid card consumers will use for purchases at the new Australian iTunes store. They are using technology provided by Bill Express to manage the transactions.

    Newsagents have 50% more Bill Express prepaid outlets than Coles yet they are not part of the equation. Okay, that’s business. Deals between companies are done every day so why is this one different?

    Newsagents are a better fit with the typical iTunes consumer. Newsagents are better socially connected than Coles and this should sit well with Apple.

    Just as businesses have an obligation to buy Australian, so too should there be an obligation to seek out small business partnerships. Otherwise the big will get bigger and the small will cease to exist.

    I’m not proposing a free kick for newsagents from Apple. Rather, a commercial and more valuable arrangement than with Coles. Newsagents offer more outlets than Coles, equal compliance (through Bill Express) and a better consumer connect i this space.

    Newsagents have committed to $25K in hardware infrastructure to support the Bill Express network and to lose a logical fit such as with Apple must make many wonder about the value of the investment.

    I would like to see Government place an obligation on big business to somehow work with appropriate small business networks on deals like this in the future.

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    Australian government small business policy

    Why is the government demanding that Telstra compete in an open marketplace while it protects the best stores in the Australia Post retail network from open competition?

    Why has the government allowed Australia Post to aggressively pursue product lines sold by small business newsagents?

    Why has the government demanded that newsagents deregulate (in 1999) yet refused to open the sale of postage stamps to the same retail competition?

    Is the government prepared to compete with all small business sectors or will it restrict its enterprises to competing with newsagents?

    How does the government feel when its employees visit small business newsagencies, note retail prices for items and return to their PostShop and adjust sales prices?

    Does the government have a small business policy which is pro small business?

    Why will the government not set a policy of selling off the PostShop retail businesses to local small business people?

    Footnote: This is a repeat of what I have posted at my newsagency blog. I have posted them here because they relate to the small business issues I cover here. The two faced approach of the government on small business needs an explanation.

    The government operates 863 PostShop retail businesses. These businesses are increasingly competing with newsagents for general stationery, greeting card and related business. The old post office has become a retail chain and it is trading off exclusive postal products to grab sales which would otherwise have gone to small business.

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