Frequently Asked Questions About Business

Q. What are the main types of businesses in Ashfield?

A. Ashfield business is predominantly medium to small and having the following mix;

Ashfield CBD: Medical and Pharmaceutical Services; Asian Restaurants; Asian Groceries; General Stores; Fresh Meat, Fish, Fruit and Vegetables; Real Estate Agents; Takeaway Food; Aged Care; Personal Services; Professional & Financial Services

Ashfield - Parramatta Road: New and Used Car Yards; Motor Vehicle Parts & Accessories; Hardware; Furniture

Haberfield: Italian Cafes & Restaurants; Italian Delicatessens & Takeaway Food; Medical Services; General Stores

Summer Hill: Cafes & Restaurants; General Stores; Medical Services; Takeaway Food; Arts & Crafts; Variety Stores; Motor Vehicle Repairs

Summer Hill – Light Industrial (Minimal area): Manufacturing; Motor Vehicle Repairs; Furniture; Removalist

Croydon/Croydon Park: Takeaway Food; Grocery Stores; Variety Stores

Q. What assistance is available for small businesses?

A. Ashfield Council provides advice and assistance through its Economic Development Officer – duncang@ashfield.nsw.gov.au

The State government provides advice through the Department of State & Regional Development (Small Business) www.business.nsw.gov.au and State funded Business Enterprise Centres (closest to Ashfield located in Sydney)

The federal government provides assistance through AusIndustry www.ausindustry.gov.au and www.business.gov.au

Q. What do I need to do to start my own small business?

A. The two most overlooked requirements are planning and market research. It is essential to have a Business Plan that you understand and apply to achieving you long, medium and short term goals. It is also extremely important that you conduct some basic market research into supply and demand for the services and/or products that will be the basis of your business. Free advice is available from Ashfield Council and the State/Federal governments. This advice will determine, depending on the type of products/services you intend to offer, what other expert advice you may need from professionals such as lawyers, accountants, financial planners and lending authorities.

Q. Is it true that over 75% of new businesses fail in the first six to twelve months?

A. Yes; some sources claim that the failure rate is as low as 8% but this is for small businesses that have been in existence for over 5 years. There are many reasons why new businesses fail in the first six to twelve months but inevitably most can be traced back to the failure to seek the right advice, plan and/or do their homework (market research).

Q. What sort of structure should I use for my business?

A. Again this will depend on the type of business and the advice of experts but whether you are a sole trader, a partnership or a corporate entity be aware that the law places very strict controls on the operators of small businesses, there is no Get Out Of Gaol Free Card.

Q. What is succession planning?

A. Many small businesses are family businesses which leave it too late to share their intellectual property accumulated over time. When individuals leave a business or retire they take their years of experience with them and often the secrets of the business’s success. It is very important if the business is to be retained within the family that this information is imparted to the incoming family members sooner rather than later as they may not have the same abilities or long term interests. It is important if the business is to be sold or transferred that you can evidence the retention of this expertise and market knowledge otherwise disposal of the business at the right price may prove to be difficult at the very least. Expert advice is available on Succession Planning.

Q. What are private equity investments?

A. Private equity investments allow companies in the growth phase with undeveloped or developing products, to access funding for future growth. Australia is known for its inventiveness but when it comes to commercialising products or technology stemming from these inventions lack of capital and/or investors see it all disappear overseas. Fortunately this is now changing, for example, Cochlear has been a major beneficiary from the private equity industry and rewarded its investors with exceptional returns. While many investors associate private equity with high tech sectors, most private equity capital is invested in manufacturing, services, and communications.  The private equity industry in Australia has grown substantially over the past decade to become a major asset class for alternative investments in portfolios. Figures from the Australian Venture Capital Association (AVCAL) indicate that private equity investments have grown from $342 million in 1997 to $1.42 billion in 2001. AVCAL research also found that investments in private equity show average returns of 21 per cent per annum. Superannuation funds are the largest investors in private equity. For more information go to www.privateequitymedia.com.au  

Q. How can you invest in private equity investments?

A. For the average investor, access to the private equity sector is only available through a specialist fund. These funds offer exposure to a number of growing small companies, providing diversification and reducing the risk of potential losses should one of the underlying investments fail.  Private equity funds tend to either specialise in a particular sector or invest across several different sectors, depending on the fund managers’ investment strategy. There are 13 private equity funds listed on ASX. Although similar funds are available in the unlisted environment, a listed fund provides the additional benefits of liquidity and transparency– so you can sell your investment easily and be informed of price sensitive events, just like other shares. One example is ING PEAL, information including the prospectus, can be found at www.ingim.com.au/IPE/