Australia’s economy might not have been as heavily weighed down by the effects of the global financial crisis as that of other countries. Carefully coordinated reforms and measures implemented by central and federal authorities, which aimed to drive down debt and foster a development-suitable environment, have, indeed helped. However, one of the biggest plights of the economy down-under is that business confidence looks nowhere near attaining its past levels. Similarly, although start-ups can benefit from innovative solutions, such as virtualizing their headquarters (as we learned from http://www.regus.com.au/products/virtual-offices/index.aspx), the taxation system seems discouraging for a business novice.
For instance, one recent research report completed by the Institute of Chartered Accountants, has revealed that the collection of the Goods and Services Tax is costly and inefficient for small businesses in Australia. Of a small business’s internal compliance costs, 58 per cent go toward GST in Australia – compared to the 41 per cent it costs Canadian and British businesses, and the 38 per cent payable by South African small ventures. This is partly because there are more small businesses in Australia that are required by law to collect GST than there are in Canada and Britain. These lower thresholds end up costing a small company in excess of $11,000 per year, according to the ICA survey. There are many hidden costs to upholding GST compliance rules in Australia. In the long run, small local businesses pay some 50 per cent more than their counterparts overseas. The ICA press release also noted that small business owners are essentially being made to act like tax collectors on behalf of the Government; what’s more, not only are they not being paid for their services, but they end up sacrificing their profits for it.
One recent and highly successful case is that of a Tasmania native, who managed to turn his life-long passion into a practical hobby, which he eventually monetized off of, by turning it into a business. Stephen Welsh founded Shima Wasabi, also known as ‘Island Wasabi’, after seven years during which he learned everything there was to know about the traditionally Japanese spice. Wasabi is a powdered condiment, made out of dried plant roots, and in Japanese culture, it is often referred to as the ‘fifth taste’, since it is neither bitter, nor sweet, salty, or sour. Welsh’s operation was recently awarded the title of Telstra Business of the Year for 2012, but behind that success rests a story that ran for years and years. He is currently growing three thousand plants, but has invested into an expansion that will allow him to go triple and beyond with his culture—up to 10,000 plants.
From a business perspective, Welsh says he first focused on growing the venture in as organic a manner as possible. Now that he has become something of a celebrity figure, he plans to explore the new and exciting opportunities that have cropped up for him. One perspective would be to join an up-and-coming foodie travel project, which would help him expand his business into the state of Victoria. He is also engaged in talks that might make his wasabi plant go global, as investors from Chile, Malaysia, Indonesia and South Africa have all expressed interest in exporting his production savvy, expertise, and technical knowledge. For the time being, though, Welsh is focusing on keeping things simple and functional. He wants to take everything one step at a time and make sure he’s doing everything well. Only after he is satisfied with the results of his current endeavors will he decide to move on to the next step of the strategy. Taking things to a higher level might seem like the next logical step, but he wants to stay one step ahead of himself mentally – as that, he says, has been the key to his success thus far.