Australia is fast heading towards becoming a cashless society. But there are still segments of society that rely on being able to pay in cash.
With this in mind, the Federal Government is proposing new legislation that would make it compulsory for Aussie businesses to accept cash for groceries, fuel and other essentials.
What’s the impact of this likely to be for your small business? Let’s take a look.
Giving consumers the option to pay with cash
Research from 2022 by the Reserve Bank of Australia shows that 76% of Aussies pay using cards, while 13% pay using cash. However, there are demographic groups, generally the elderly and those in low income brackets, that still prefer to pay using cash.
Reasons for this can range from security worries and a mistrust of online banking, to the relative ease of using cash as a payment method.
To protect the rights of consumers that prefer cash over cards and/or digital payments, the Federal Government hopes to introduce legislation over the next two years.
Here’s the lowdown:
At present, under existing law, businesses do NOT have to accept cash payments. It’s proposed that legislation will be introduced to make it mandatory for businesses to accept cash as payment for groceries, fuel and other essentials. Cheques are to be phased out altogether as a payment option by September 2029. A consultation process will take place in 2024/25 and legislation will be introduced from 2026. There may be an exemption for small businesses, with details on this to follow.
Talk to us about the impact of a move to cash
If you’re a consumer-facing business selling essential items, and currently only offering cashless payment options, this change in legislation could have a significant impact.
Having to accept cash will require you to have cash registers, cash floats and to bank the money at the end of each day – practicalities that cashless systems had done away with.
Talk to our team and we’ll be happy to run you through the implications.
At the point of selling your business, getting a good price for the company will be a major goal. A key way to achieve this is to add value to the business as part of your ongoing exit strategy.
In this series, we’ll give you all the advice you need to plan your exit, add value to the business, negotiate a great deal and define your new pathway once the business is sold.
You’ve put blood, sweat and tears into this business. So, you’re going to want to achieve a sale price that reflects this hard work, giving you the funds to start the next phase in your journey.
Your potential buyer will be looking for a profitable, well-run business that can prove it’s a viable enterprise. To do this, it’s vital to look at core ways of improving the attractiveness of the company, gradually adding incremental value and allowing you to negotiate a good price.
Let’s take a look at some important ways to add value to the business:
Increase your profitability
A buyer wants an acquisition that will turn a profit. To boost the company’s profitability, look at improving your margins, reducing costs and increasing revenues. Ways to achieve this can include streamlining your operations, negotiating better deals with suppliers and increasing brand loyalty with your customers.
Strengthen your financial performance
It’s important to run a tight financial ship. Aim for the company to be in a positive cashflow position, reduce your ageing debt and strengthen the balance sheet to demonstrate financial stability. This will mean getting in control of your inventory and spending, being proactive about collecting outstanding receivables and exploring financing options, such as invoice finance or bank loans.
Nurture your customer relationships
Loyal customers spend more and provide a stable pipeline of sales and revenue. Building these strong customer relationships is a critical part of adding value, and can start by providing excellent customer service, offering loyalty programs and actively seeking (and acting on) customer feedback.
Invest in the company’s growth
A growing company is an attractive proposition to any buyer, so it’s important to continue investing in growth. Explore new products, services or markets to expand the business’s potential, add value and show the potential behind your business concept. The R&D, strategic planning and resourcing that’s involved will be an investment that pays off once you have an interested buyer.
Prepare for the due diligence process
Before a buyer makes an offer, they’ll want to carry out due diligence checks on the business. To be ready, you’ll need to get your financial records, contracts and other relevant documents in order, and make sure all the information is easy to find and access. Making these checks simple and straightforward helps potential buyers assess the business’s value and gain confidence in the company.
Talk to us about planning the sale of your business
Making your business more attractive to a potential buyer takes good planning, patience and a real focus on adding value. Starting this value-add process early is vital.
If you want to start adding value to the company, prior to selling up, come and talk to us. Our team can help you deliver an exit strategy that increases value and delivers a great deal.