It’s official, according to the most recent data on consumer sentiment: as Australians prepare for additional rate increases and as inflation continues to bite, discretionary spending is being dramatically reduced.
In the meantime, almost half of businesses reported rising operational costs, as per the latest ABS data. The business environment is getting more challenging due to labour shortages, supply chain interruptions, and other factors, and things could get worse before they get better.
This binary attitude towards leadership examines business and gender through two opposing lenses; that you can either be a compassionate, empathetic leader or a forthright businessperson. In reality, regardless of where a person sits on the gender spectrum, leaders today must be multifaceted and ever-changing.
Sadly, leadership in Australia is still far from equal. Women, non-binary people and those from minority groups and diverse backgrounds are still significantly outnumbered when it comes to leadership positions. For this to change, attitudes towards gender and the workplace must be reimagined to achieve true equality.
Moreover, despite the fact that the past two years have undoubtedly been among the most difficult, women leaders have encountered unique difficulties throughout this time, which has seen a fall in gender equality. Earlier, Dynamic Business stated that a poll found that women are mistreated and underpaid at work, with the national pay gap anticipated to reach $966 million per week or $51.8 billion per year.
The study revealed that gender discrimination remained the biggest driver of the pay difference, according to the economics of the gender pay gap issued by KPMG, Diversity Council Australia (DCA), and the Workplace Gender Equality Agency (WGEA).
The latest Xero Small Business Insights report, Crunch: Cash flow challenges facing small businesses, uses the anonymised and aggregated data of thousands of Xero customers in Australia to deeply dive into small business cash flow trends.
According to the study, 92 per cent of Australian small businesses experience at least one cash flow “crunch” month each year, which is characterised as a period when expenses outpace income. In Australia, 20 per cent of small businesses experience more than six cash flow problems annually.
Monitoring cash flow is critical in a high inflation environment as small businesses try to juggle expenses and revenues. The 6.1% year-on-year rise in the CPI in June shows that inflation continued to rise in the year’s first half. This is the highest inflation rate since the introduction of the GST, which means many small business owners have not had any experience running their businesses in such an environment. So how can a female founder strengthen her business’s resilience in the current business environment?
Ruth Thomas, the founder of the media and communications company ChangeMakers Media, spoke with female business owners to get their tips on fortifying their inner resilience, becoming adaptive, and thriving in the business.
Sarah Thornton, Founder, Finders Keepers says: “Inflation has definitely affected us directly, as a lot of our events have been on hold for two years already, which we’ve had to move to this year. Our supplier and services costs have gone up by 5 to 10 per cent for events and additional staff surcharges, so it’s hard for us to compare things to two years ago. Financially, it’s a whole different game, and it’s been challenging.
“During these times, you’ve got to have creative courage and resilience to try new things. Staying in business is an act of bravery at the moment, which includes riding the ebbs and flows. I’ve definitely learnt a lot about being able to weather the storm in the last two years. You need to be able to get back to basics or change the things you do in business.
“People think they can’t change anything and can’t batten down the hatches, but understanding your profit and loss and numbers is key to knowing what you actually need to survive. However, having a support network and being part of your community as a business is everything. If we didn’t have the community supporting us, we wouldn’t have lasted. If your business doesn’t have a heart and soul, it won’t survive the tough times.”
Anna Ross, Founder Kester Black says: “I launched my first six nail polish colours in 2012 but didn’t stop my full-time job to run Kester Black full time until 2016. When the pandemic hit, we had to lean up. We moved to work from home and stopped packing and sending our own orders. We also had many supply chain issues, with some of our stock taking 14 months to arrive. While these were all challenges, facing obstacles as a young female business leader is something I’ve become accustomed to.
“As a female entrepreneur in the cosmetics world, I often work with or alongside large heritage businesses that are generally owned or managed by men. Unfortunately, young female entrepreneurs are not taken very seriously. But as a creative, I’ve always thought differently, plus I simply don’t take no for an answer. I spent a year emailing a supplier who wouldn’t work with me initially because he said my company was too small. Finally, he took me on, and within a year, Kester Black was their second largest customer.
“Regardless of what’s happening in the business or economic climate, it’s really important that young female entrepreneurs reach out and ask for help. Find mentors and build your connections; doing so helps you with the challenges that come with business and build you into a success. Developing resilience, in tough and good times, as a female business leader is essential; it helps you learn to adapt and forces you to be smarter.”
Jessica Ruhfus, Founder & CEO, Collabosaurus says: “The unpredictability and constant need to adapt quickly over the last 2.5 years have been exhausting for so many businesses. Many of our clients experienced burnout, as did I and, sadly, there’s no easy road ahead as we face more dramatic changes in the economic landscape. At Collabosaurus, we’ve seen both immense growths as well as sharp losses and stagnating periods. Challenges, rejection, tough conversations, and life-altering decision-making come with running a business.
“Throw a global pandemic, recession, major political shifts and flooding into the mix and your capacity for resilience increases out of survival. After burning out, another necessity was to reassess priorities and health, which has been a great positive shift. It’s easy to get caught up in self-doubt and blame, especially when there are external forces at play, but we all need to be easier on ourselves. Connections and relationships are truly everything; I wouldn’t be here without my amazing network of friends, colleagues, clients, team, collaborators and brand partners.”
Kellie Brown, Co-Founder, Fig & Bloom says: “We launched into a new market in Brisbane during the thick of the pandemic, which had its challenges. However, we’ve been open for 10 months now and are understanding our differing markets better than ever. Throughout the past year, we faced two main challenges with this expansion, including developing a culture of excellence with a brand new team and affordable customer acquisition.
“Staff turnover in our industry is quite high, and over time we’ve acquired the ability to recruit, select and train staff quickly. Having strong core values in place and living and breathing those values has been key to our success. We want our team to dream big, and we support ambitious and creative people on their journey. During difficult times I’ve had to be really firm but fair. However, doing the hard things with compassion, love, and kindness has been essential.”
According to Louise Southall, an economist for Xero, inflation has a big impact on small businesses as they struggle to maintain cash flow and remain profitable in a situation where expenses are rapidly increasing.
“It has been a busy few weeks in terms of economic news, with the inflation data and the Reserve Bank Board meeting today. Much of the attention around inflation and interest rates are focused on how households cope. But inflation also hugely impacts small businesses as they try to maintain cash flow and stay profitable in an environment of rapidly rising costs,” Louise said.
“Small businesses relied on their trusted financial advisors more than ever during COVID. But now is not the time to relax – monitoring costs and ensuring prices are set high enough to stay profitable is critical. Small businesses can quickly find themselves under cash flow pressure when costs are rising so fast, not charging enough to cover their expenses.”
Bridging the gap
The research also contains a breakdown of the gender pay gap by income quintile, demonstrating how gender discrimination, a lack of advancement opportunities, and underrepresentation in management affect women throughout their careers. In fact, the World Economic Forum estimated that on a global scale, it would take 257 years to reach economic parity between women and men.
Despite this, two-thirds of new businesses created in Australia in the last decade have been founded by women, according to Xero, and the last 20 years have seen a 46 per cent increase in female-owned businesses.
More needs to be done to guarantee female entrepreneurs survive these challenging economic times, despite the newly elected Labor party promising increased assistance for women in regards to equality, financial equity, and business.
Read more about the online event hosted by One Roof and Pin Payments this month on August 18, discussing resilience, businesses and advice for female founders.
Pin Payments are also sponsoring access to 12 months of business support through One Roof’s memberships for 5 women-led businesses.
Each business owner has the opportunity to elevate a fellow female founder, creating a positive domino effect of much-needed access to business resources, coaching, networks and more for women in business. Apply via the One Roof Website.
For more information on the event, visit https://events.humanitix.com/unstoppable-female-forces-women-and-the-future-of-online-business.