Peter Strong: Our business associations are world class, so use them wisely

Small business associations and their members have just received a new focus and its great timing. We now have a ‘Small Business Hub’ in Canberra.

The members of the Council of Small Business of Australia are industry associations and the like. They join COSBOA because they have small business people in their membership or as their main focus. They know that COSBOA is unambiguously about policies and activities for small business people.

Business associations are important. Our regulators tell me that they have fewer problems with business people who are members of associations. That makes a lot of sense and sends a clear message to business people — join an association.

Business associations have been around for a long time. The Marseilles Chamber of Commerce can claim to be the world’s oldest current business organisation, dating back to 1599. Business NSW has been around since 1885 and the Fremantle Chamber of Commerce dates to 1873. Archaeological evidence shows that business guilds date back as far as the Assyrian Empire.

In recent years associations have become even more essential to our society and our economy. But why are associations so important and what traits do good associations possess?

They are important due to various reasons:

• the need for business people to have access to up to date information on a range of issues relevant to their business;
• the speed of change in the world of business creates an imperative to get that information quickly;
• governments and policy makers need to be informed from experts on industry needs;
• the need for a central group who can represent business needs in the national debate;
• and the increasing demand from the general public that businesses are seen to be compliant with regulations. (As we know change and compliance have become huge issues.)

It is essential that businesses, regulators, policy makers and the community keep up with change, understand what that change means and what further changes are needed to deal with change (change overload!). Business associations are best placed to communicate these issues.

The greatest strength of a business association is that it knows its particular industry, it knows how to communicate with its members and it knows the culture of that industry.

For example, business people in the transport sector (owner-drivers) have a greater focus on road safety and keeping their license than those in retail. Service station owners will focus on safety with more vigilance given they deal with a highly combustible product. Retailers will focus big time on customer service, while pharmacists take pride in their knowledge of customer needs and also an ability to manage a very complicated GST regime. The list goes on. With the constant change we have a growing need for business people to join their relevant association so they can stay up to date.

To highlight the importance of small business associations the Minister for Small Business Craig Laundy recently opened a new and vital resource that has been developed by the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell.

Carnell and her team have developed a business support centre, the Small Business Hub, for associations to access when visiting Canberra. This is a place where association executives and their members can make a base when they visit Canberra. A place to work with access to Wi-Fi, coffee and tea, desks, meeting rooms, teleconference facilities and printers. A bit like an airline lounge for small business supporters (sadly, but responsibly, without the gourmet food and drinks). It’s a place to use as they pursue meetings with politicians and their staffers and with other key players from their industry sector. Policy makers from the bureaucracy can also visit the hub and meet with us instead of us catching cabs around the city.

The fact is and always has been that the great majority of businesses — big, medium and small — are compliant and efficient. It is in the interest of industry associations to support these businesses and their employees. It is also in our interest to support regulators in their pursuit of those few who do the wrong thing and give the rest of us a bad name.

The traits of a good association are simple: professional and transparent corporate activity; respect from regulators; seen as a valued supporter from their members; open communications; and good change management practices.

So what can we do? How do we engage with our associations? Why is this important?

If a government or a private sector business or researcher wants to get the right information then they need to consult with the people that are affected. Rarely does policy affect all small businesses; it will affect some more than others. A policy around road transport is obviously important to the transport-based associations but who else? The service station sector and the large vehicle repair sector will also have opinions and need to be consulted, while other less relevant associations can be left out of the loop. Associations can help target consultations so that feedback is coherent and relevant.

Currently too much consultation is based on box ticking — “yes Minister we consulted with small businesses, ten of them” — rather than gathering information that will inform policy and ensure there are fewer than the normally accepted unintended consequences. Most of our regulators are good at consultation, including the Fair Work Ombudsman, the Australian Taxation Office, the Australian Competition and Consumer Commission and parts of the Australian Securities and Investments Commission. The Reserve Bank of Australia has also recently increased its communications with the small business sector.

Better compliance and better communications come from quality business associations. So, increased support for associations makes a lot of sense. Well done Minister Laundy and Kate Carnell.

NOW READ: Peter Strong on what small business achieved in 2017