Within a few moments, I saw this message from @SquigglyRick: “Write three sentences. Check Twitter. Write two sentences. Check email. Write one sentence, check Skype. Write nothing check everything.”

I laughed – whether out of mirth or despair, I’m still not quite sure. I know I recognised myself in these words; in the midst of my work that evening, I pulled away, checked my connections, looking for someone to divert my attention.

This is something all of us do all the time. There’s nothing wrong with it – just the opposite: it’s a good idea to take frequent mental breaks. We catch our breath, gather our thoughts, and move on to the next task, one sentence at a time. We did this before we had hyper-connectivity at our fingertips, when we might have gone for a walk, had a smoke, or just looked around to see if anyone wanted to chat.

Like it or not, we never need to leave our seats to find the others. Whether on our mobiles, tablets or laptops, all the people who can help us fritter away a few moments of spare time are always present, no further than our fingertips.

Other people are the purest form of entertainment. Someone always has something funny to say, something insightful, and something that might even change your life. Unexpectedly, someone might reflect your own feelings, as with @SquigglyRick’s poignant observation of modern life.

The lure of connecting with others tantalises us every moment we are connected – at this point, that’s nearly every waking moment. We constantly feel that gentle, sweet tug, reminding us that there is a world of diversion at hand, should we want to indulge ourselves a little.

More and more we say ‘yes’ to that temptation, spending our days sifting through our connections – on Facebook and Twitter, LinkedIn and Google+, text messages, voice mails, emails. The totality of our connectivity has come to absorb an ever-greater share of our attention. In less than a generation, digital connection has gone from next-to-nothing to almost everything.

This is as it should be. There is enormous value in connecting, because once we connect we begin to share with one another, learn from one another, putting that knowledge to work to improve our lives. We are smarter – much smarter – than we were before we were all connected. The answers to all our questions lay at our fingertips, offered up willingly by everyone who shares themselves with us. Who wouldn’t want that?

Yet for all of its wonders, the connected world leaves precious little room for ourselves. Communication is a dance, and like any dance, it requires full engagement. Two people, connected, can be quite intense. When it becomes three, four, or more, it becomes a party. Parties are hard work: when you’re at a party, you’re only thinking about the other people at the party. It becomes your whole world. As of right now, the whole world has become a party.

When we connect and involve ourselves immediately in the lives of others, we can’t be involved with ourselves. I don’t mean simple narcissism; rather, the critical moments of reflection that help us to understand ourselves. Those moments are not part of our connected lives, when we are amused, diverted, and sympathetic. None of this is bad, but none of it is all of what we are. We also need to reflect and meditate. Without the silence that comes from solitude, we can not nurture ourselves.

Friends in California have introduced the idea of ‘technology sabbaths’: a 24-hour period, once a week, when all devices are set aside. Carving out some quiet time on our chatty planet, they have drawn closer to one another, to their children, and to themselves.

Every morning, in meditation, I wait for my mind to calm, as the internal chatter gradually shifts from noisy to quiet. In that silence I have my greatest moments of insight. I can see both myself and others clearly, in a way I never could in the midst of the ongoing dance of connection.

Connecting is fantastic. So is disconnecting. They are complements, not opposites. But in our drive to connect, we’ve lost sight of the real value of silence.

During these long, hot summer days, when it’s too much work to do anything more than sit under the air conditioner, we have a unique opportunity to recover ourselves. Move slowly, thoughtful, and without a worry about the world beyond. It will take care of itself. It will carry on without you – and will bring you up to date, when you return to it. Remember the warmth of those connections, and let that warmth carry you into a comfortable solitude – alone but not lonely – where you can listen to yourself. You might learn something.

Mark Pesce is the co-inventor of the VRML, co-author of The Next Billion Seconds, and founder of Future St, a Sydney media and technology consultancy. He was formerly one of the judges on ABC’s The New Inventors.

The number of businesses calling it quits was down 10% compared to the third quarter of 2011, but up more than 40% for the year.

“There is an increasing risk that the global economic slowdown will intensify the upward trend in insolvencies,” said Christine Christian, CEO of Dun & Bradstreet, in a statement.

“Despite recent rate cuts, there is a palpable lack of confidence in the current operating environment. This is obviously one of the side effects of long standing global uncertainty and can often be enough to deter businesses from entering the market, irrespective of actual conditions,” she added.

The amount of new businesses starting up in the last quarter of 2011 fell 11% compared to the previous year as well. According to the report, business failures were most common in the finance, service and construction industries.

“Outside the mining sector, sentiment is generally still poor and the strong Australian dollar is straining profits. This could lead to an increase in business failures in 2012,” said Christian.

Dun & Bradstreet’s findings also pointed to Australia being at the same level of risk as countries directly linked to the euro-zone debt problems, such as Italy, Portugal, Spain and the UK.

“In Australia, rising insolvencies are largely being driven by poor sentiment outside the mining sector and a tightening of credit. This will have a knock-on effect on businesses as cash flow becomes more strained,” continued Christian. “Cash flow is the mitigating factor here, particularly for small businesses who feel the effects a lot faster than larger companies with cash reserves to match.”

Small businesses with less than 20 employees recorded a large spike in failure rates, with Dun & Bradstreet noting a 48% year-on-year rise in insolvencies.

“Businesses should take precautionary measures to reduce their level of financial and operating risk. Changing market conditions will no doubt have an impact on all businesses, but it is above all good cash flow management that is the key to running a successful enterprise,” said Christian.

Did you believe when you started the business that you would have the level of success you’re having now?

I look back seven years ago and remember the day I started to jot down notes to begin my business plan. I was 26 back then and had a little less fear about the business world and you could say a little more guts. I thought big from the start and this ignited an energy that got the ideas flowing through me. The fact that I had so much confidence from the beginning enabled me to start on a positive note.

What was the biggest challenge you have had to overcome in the day-to-day of the business?

The biggest challenge I have had to overcome in the day to day running of the business is breaking myself away from the computer, mobile phone and iPad. I’m always monitoring the traffic on the site via the back-end system, I get excited when I see the different levels of customers searching and buying and get even more excited when I see return customers. I have well over 200 emails daily and they are pretty much replying to customers and wholesalers, the emails consume me and it’s hard. I find myself cooking and emailing at the same time quite often.

If you could go back and give yourself advice when you were launching your business, what would you say?

To be quite honest I feel I did everything right in starting the business as I went with my gut feeling and plan. I had a target market I was going to attract and played on that from the start. I didn’t over capitalise, I went in positive and confident, and was able to stick with my business plan and structure. If I hadn’t liaised, researched and written a business plan I don’t think I would have succeeded, it was just so important to have the right foundations and build on that.

No one is perfect and, yes, perhaps some advice I would give myself is that I could have spoken to more successful business people and surrounded myself with experienced business mentors.

There are a lot of negative stories in the media about the state of bricks-and-mortar retail; do you think this carries over into online retail?

Personally I think there is demand for both bricks and mortar and online retail. I can’t see the online retail sector completely taking over the shopfront store trade. Both are needed in our new technological world to help feed off each other. I took the online shopfront approach first, as my industry is all about a delivery service.

Online retail doesn’t mean the end of the bricks and mortar stores. Consumers will always require special service and assistance. Trying items, touching, feeling is always needed by anyone purchasing something. There is also the social aspect of shopping, it is all about enjoyment, fun, something to do and the overall experience.

What’s your strategy for dealing with the competition?

I love competition, it’s healthy. It actually gives me a buzz to know that we are being watched daily and monitored by our competitors. This is why my strategy is to always think ahead and know what’s around the corner. I keep up to date with the trends and focus on our target markets and demographics. I like to eliminate competition by being unique and setting the business apart from other hamper companies. I hate being the same, so I’m constantly changing and updating things. I certainly don’t like to be copied either.

It’s important to take a holistic look at where your business stands with respect to what it owes and what it has earned, before you deem a busy month to be a financially successful one. Here are four things to take into account when tracking the success of your business.

Cash is king

A freshly minted invoice may feel like a significant mark of success, but it’s unwise to treat your business’ turnover as a measure of how well it’s performing.

“Cash flow is the one that really tells you how you’re going,” says Sophie Andrews, owner of Accounts Studio. “You can have a really high turnover but be making no money whatsoever.”

By cash, Andrews means the funds that are at your immediate disposal, not those you’re expecting from invoices sent out or for work done.

“Cash flows are your sales inwards and the cash that you’re collecting from the operations in excess of all the expenses you have, including the drawings of owners,” explains Ian Harris, a director in B + I Lockwood Accountants. “If they’ve got a positive cash flow, they’ve got a fighting chance. If negative, they will find themselves at the mercy of the banks in due course.”

A business might be invoicing for hundreds of thousands of dollars every month, but debtors might only be paying these invoices after 60 or 90 days, leaving a significant gap between what’s on paper and what’s in the bank. This can make the business appear to have more immediate financial flexibility than it actually does.

“It means all their suppliers and wages still have to be paid on time, but it squeezes the cash flow,” says Harris. “Someone can see sales have been really good the last couple of months, but if some of those sales are now going to take six months to collect rather than sixty days to collect, they could be in trouble.”

Accounts Studio’s Andrews suggests businesses look at historical data for both turnover and cash flow when trying to figure out how much they can afford to do in the short term.

“If they get 30% of their income actually paid each month by the end of the month, that’s what they can count on as an average to forecast it’s going to come in each month,” she says. “Then they look at their fixed costs they’ve got to pay each month (rent wages etc.) and then look at what’s left over. That gives them the true impression of how much money they’ve got to play around with.”

Liquidity

Liquidity is a term used to describe the capability of a business to pay off its short-term debts and creditors. If a business has poor liquidity, then it’s especially vulnerable to the cash flow difficulties that slow debtors can cause. Andrew Graham, national head of business solutions at RSM Bird Cameron, says businesses should take time to calculate their liquidity ratio, which is the measure of immediately usable assets against outstanding debts.

“If it’s on a 1:1 basis, then everything’s going well,” he says. “That means that if they realise their current assets – being their debtors, their stock, and their cash – they’d be able to meet their short term liabilities in terms of their creditors and any short term debt.”

A ratio of less than one means that the sustainability of the business is tenuous, as it wouldn’t be able to resolve its short-term liabilities out of its current assets in case of an emergency.

“You’ve got to be a little bit careful with that, too, because what’s included in their current assets is their stock, and you can’t liquidate stock into cash overnight,” continues Harris.

Your business may have $100,000 worth of stock on its balance sheet, but only 80% of this could be liquidated quickly if need be. For this reason, Harris suggests it’s good practice to consider excluding stock from your current assets when calculating a liquidity ratio.

Staff value

Aside from measures of cash flow, turn over and liquidity, the value and productivity of a business’s staff can help to give an impression of how well a business is tracking.

“The main ones would be your cost of goods and your wages,” says Accounts Studio’s Andrews.

She explains that, as a service-based business, she “drills down” into the details of how much profit Accounts Studio makes per staff member, per hour.

“That way, you can forecast,” she says. “You can look at your staff levels and see you need more people at a lower level, because you’re not making enough profit overall on the staff, and bring your wage costs overall better into line.”

The flipside of wage cost is productivity; the more productive your staff, the greater the margin you’ll make on them as a business resource.

“I’ve seen cases where, in an air conditioning refrigeration business, people were going out and charging $3,500 a day, and were being paid for an eight hour day, but were less than 50% productive in terms of the hours they were working and the hours they were being paid,” says RSM Bird Cameron’s Graham. “Being able to track staff productivity is important. If you can get an uplift in productivity, it certainly improves the profitability of the business.”

Graham claims his business also looks at the number of absentee days taken by staff as a measure of financial productivity.

“If the people that are working in the business aren’t engaged and are taking sick days on a Friday or a Monday, that’s going to affect the productivity of that particular business, and it certainly can impact on a business’ profitability,” he says.

Benchmarking

Another excellent way of gauging business performance is to compare your figures to those of similar companies in the same industry. This is called benchmarking.

“A benchmark is an average of what others in your industry are doing,” says Accounts Studio’s Andrews. “It gives you an idea of how your business should be performing.”

An accurate idea of how your business compares to similar entities in its industry is essential; when it comes time to sell, you need to be able to demonstrate its worth relative to similar companies in the industry.

“We use benchmarking to get a bit of a feel for things,” says B + I Lockwood’s Harris. “It certainly allows you to ascertain where you are at with respect to the average. You can get a feel for whether your rent is higher than what your other compatriots have, whether your wages bill is higher than what your other compatriots have, and so on.”

The Australian Taxation Office (ATO) calculates benchmarks for a number of different industries based on information gleaned from BAS statements and tax returns submitted by small businesses. A wealth of industry-specific small business benchmark data is available on the ATO website.

Aside from helping to show how a business is placed in its industry, benchmarking can help to reveal inefficiencies in your business that might not have been discovered otherwise. B + I Lockwood’s Harris suggests that, although benchmarking statistics can sometimes be inaccurate or misleading, the process is a valuable one to go through, as it requires owners to carefully consider and improve deficient areas in their business. Andrews relates that a hospitality client of Accounts Studio managed to streamline its costs considerably after comparing them with those of similar businesses.

“Their cost of goods were great, but their wages were about 10% higher than the industry average for their size,” she says. “That is an industry where there’s a very fine line between making a profit and not, so it’s really key that you get those key performance indicators spot on, otherwise you’re just not going to make any money. In that case, the business would have to sit down and look at their rostering, and whether they’re over-staffing”

B + I Lockwood’s Harris suggests that if businesses want to get the most out of the process of benchmarking, they should go beyond the averages provided by the ATO.

“The benchmarks that are really useful are the ones that pull out what the top players are getting in terms of profitability and gross profit margins and so on,” he says. “Then, compare yourself to the top players and see what they’re doing that you’re not doing, and ask how they’re getting those figures.”

He also advises business owners go a step further than reading figures about the ‘top players’, and to get the information firsthand by contacting the owner of a business that’s similar, but not competitive, to theirs.

“What you do is you just go and talk with them,” he says. “If you were able to directly communicate with them and understand what they’re doing in their business that you are not doing, that’s where you will really learn.”

Benchmarking a business against those with similar characteristics in other industries can sometimes also shed new light on its processes and efficiency. Harris explains that Sydney-based Pioneer Concrete took this approach when trying to refine its concrete delivery services.

“They benchmarked themselves against a pizza delivery service,” he says. “They asked themselves ‘what do we learn from looking at the pizza operation, and how could we change our processes in getting our concrete onto the sites quicker?’

“That’s where the real learning comes in benchmarking. Looking at some other industry altogether that has a similar outcome but different processes.”

Image credit: Thinkstock

Mr Zuckerberg’s stake in Facebook is estimated to be about $23 billion. He also holds options to buy another 120 million shares at just 6 cents each. In its IPO filing, Facebook values its shares at $29.73. At that price, Mr Zuckerberg’s options would amount to $3.6 billion.

However, analysts are predicting the shares will change hands for more like $40 each in which case his options would be worth more like $5 billion.

Big windfall with strings attached

The windfall he will receive upon exercising these options will be treated as ordinary income, and Mr Zuckerberg will face the not so ordinary tax bill of up to $2 billion if the $5 billion predication is realised. Whether this will make this the largest taxpayer in US history remains to be seen, but all reports indicate the social media scion as taking it all in his stride. While lawyers and tax specialists alike weigh into the debate as to whether he could have and should have structured his interests in a more tax effective way, the argument is purely academic.

What is even more interesting is how much income tax he will end up paying on the rest of his stock that he doesn’t pay immediately. And this is anyone’s guess, though the thinking is that this will be negligible if anything at all.

Remain tax free

You see, he can simply use his stock as collateral, and borrow against this tremendous wealth to sidestep tax liability. If he takes a leaf out of Steve Jobs’ book and decides to hold onto his shares and never sell any of them, his beneficiaries will only be taxed on any appreciation in value since his death when they eventually decide to sell. This means that the entire appreciation of the shares during his lifetime will remain tax free.

Of course tax laws all over the world can be stubbornly complicated and confusing even if you don’t have Mr Zuckerberg’s incredible wealth.

Indeed, all too often, tax bills become payable long before you receive the income. For instance, income from vested share options or share plans can only be realised years later, yet you’re liable for the tax bill more or less straightaway.

This scenario presents two challenges, the first of which is the need to fund the tax bill yourself without the help of the income. This is akin to having to pay income tax on your salary without actually receiving the salary. For most people this means having to borrow it or dip into their savings.

The second challenge is that the vested shares could decrease in value or end up worthless, yet you don’t get your tax back. The risk of the share price fluctuations resides with you, not the ATO. So if you had to borrow to fund the tax bill in the first place, and your shares actually decrease in value, then you’ll end up with a debt and a depreciated asset!

How you structure your business and stock options or even your remuneration package can have a profound impact on your tax liabilities, as well as eliminate risk to your assets in the event of litigation or bankruptcy. Whether you are a sole trader, setting up a partnership, growing a company or planning your IPO, establishing the optimal structure for your business today will affect your long-term business success.

Ashleigh Swayn is CEO of Countplus mbt, a leading chartered accountancy practice offering accounting, financial planning and finance expertise.

There are many positives to expanding your franchise and becoming a business franchisor. As a franchisor, you learn to create and maintain relationships with franchisees. This relationship management is critical as the better your relationship is with your franchisees the more successful your franchise business will become.

The more franchisees you have the more your market reach will expand. Your brand awareness and loyalty will also increase, as will your revenue.

Building a franchise, however, can be a tricky business and it is always a good idea to seek legal or professional advice if you are unsure of what to do. These professionals can be easily found through franchise associations such as the Franchise Council of Australia.
If you would like some quick advice or to find a specific franchise professional, industry specific online directories such as FranchiseBusiness.com.au are great places to find what you are looking for.

However, it is important that before you decide to create your business into a franchise, you understand the basic responsibilities of a franchisor. It should be in your best interest to have successful franchisees and understand what types of products, services and support they will need in order to make their business successful.

Territorial protection

This is an important responsibility especially as your franchisee numbers grow. It is crucial for the success, as well as the happiness, of your franchisee that you create territorial borders. This is so no new franchisee can penetrate the existing franchisees’ market and diminish their customer numbers through unnecessary competition.

Promotional materials

As the business owner, it is your responsibility to make sure all franchisees have access to promotional products. This includes, but is not limited to: posters, flyers, brochures, competition entry forms, loyalty cards and promotional giveaways such as badges or ‘buy one get one free’ coupons.

This is so your franchisees offer the same promotions and discounts regardless of where they are. Of course it is always great to put a spin on the marketing products to suit their environment but making sure your franchisees are always offering the same thing is very important for the customer.

Product Management

Making sure that you keep track of what supplies are going where and what each franchise is ordering is important, as waste and expenses must be monitored and kept to the very minimum in order for the franchise to run efficiently.

It is also important to maintain the standard of the product among all your franchisees. Selling quality products in one location and less quality in another is not ok and can ruin the reputation of your franchise. Customers expect each franchise to be the same and provide the same service and quality regardless of where they are located.

Support and training

It is important that you maintain a high level of support and training for each franchisee as not all will have experience in running a business. Additionally, there may be some aspects that need support from other people, such as financial support or legal support. It’s a good idea to have a network of trusted professionals around you that your franchisees can also use.

Also, it is important that you train your franchisees either externally or on site, and that you provide them with a training manual. Be sure to train all franchisees the same way so as to promote the same values, beliefs and professional service within each location.

Consistency is the most important aspect of running a franchise business and it is the franchisor who is responsible for maintaining consistency through everything in the business. It is important that, before you begin your franchise business, you understand and prepare for the responsibilities of being a business franchisor.

Raffael Fernandes is an account manager at FranchiseBusiness.com.au, the official online business directory of the Franchise Council of Australia, listing franchises and service providers. Owned and operated by Catch, an online division of Reed Business Information Australia, FranchiseBusiness.com.au provides a comprehensive central online source of franchise opportunities and industry updates and news.

So is this finally the year of mobile? It could very well be. Consider a few statistics:

Mobile phone ownership in Australia now stands at more than 80% of the population, and nearly 60% have smartphones (second highest proportion in the world), which they’re using to access the Internet any time, anywhere.

According to Nielsen, Australians are the biggest users of social media in the world, with nearly half the population spending nearly seven hours per month on Facebook, Twitter, etc. A high percentage of this social media use is via mobile devices.

The percentage of people who store data in ‘the cloud’ (remote servers rather than your own hard drive) is more than 65% in Australia.

Mobile web adoption is growing at a rate eight times faster than the desktop web. At the end of 2010, 12% of all Google queries were coming from mobile devices, exhibiting a 3000% growth rate over three years.

Internet traffic via mobile devices is set to eclipse the amount of traffic coming via desktop devices either late this year or early next year. When you consider the growth of the internet in recent years, combined with the fact that 10 years ago it wasn’t even possible to access the internet wirelessly, this figure is absolutely mind-blowing.

A study released this week showed that nearly 70% of tablet users regularly use tablets in their bedroom (mainly for reading books – get your mind out of the gutter!), while 63% use it to multi-task while in the lounge room.

That above study ties into numbers from Google that show that mobile web use peaks at 11 p.m. and on weekends, the exact opposite of desktop web use.

I could go on and on, but suffice to say that if you have on online presence, you can no longer just rely on optimising how your website looks and works on a desktop device. You need to be accessible on all devices – and your mobile presence needs to work.

Is the answer to create an iPhone app? As a small business, the answer is probably no. An iPhone app is what is known as s ‘native app’, which means it will only work on an iOS device (iPhone, iPad or iPod). iPhone apps can be quite expensive to develop, and as popular as Apple is, you’re limiting your availability, ignoring Android and thousands of other devices that people use to access the Internet.

A more efficient way to tackle this is to focus on ‘mobile-optimising’ your current website. This means looking at how your current website appears on a mobile device and getting your web team to redesign your important pages so that they are easier on the eye and easier to use via a mobile device.

This doesn’t mean an app is out of the question per se. The solution may be to develop a ‘mobile web application’, which, without going into too much technical detail, means you can create a shortcut that can be downloaded onto a mobile device that looks like an iPhone app, but which instead of opening an app, takes you to a mobile-optimised site.

This may not look quite as sexy as an iPhone app, but it will be available on all mobile devices, and it is much easier and cheaper to update. Your customers can also interact with you in real time, just as they can with your current website.

So, get on your smartphone or your tablet and take a look at your website. If you don’t like what you see (prediction: You probably won’t. A recent exercise by a marketing website showed that nearly every major bank in Australia had a sub-par mobile presence), have a chat to your web team about what you can do. And if your current developers can’t offer you some simple steps to improving your mobile presence, it’s time to look for a new technical partner.

Dr. Ray Welling is the director of digital strategy & communications for healthcare communications consultancy Vivacity Health. He also manages a small digital content agency and strategic consultancy and lectures in marketing at Macquarie University.

After receiving a large number of complaints from rival internet providers, the ACCC launched an inquiry into Telstra’s supply of wholesale ADSL services in December 2011.

As a result of that inquiry, the ACCC has opted to make wholesale ADSL a ‘declared service’ (effectively regulating it) to address concerns that Telstra was using its copper network and market power to impede the competition.

The ACCC has made an ‘interim access determination’ which fixes the cost of wholesale ADSL services for a standard ADSL line at $25.40 per month for connections in major metropolitan areas (called ‘Zone 1′), and $30.80 per month for regional and rural exchanges (labelled ‘Zone 2′ and ‘Zone 3′).

David Kennedy, research director at Ovum, points out that while Telstra does not publicly reveal its existing wholesale rates, it does report its earnings.

“Telstra actually publishes an average revenue for its wholesale broadband services – it’s in their accounts,” explains Kennedy. “The amount that came out in their results just last week was $36.60. That’s the national average for a connection.”

Kennedy believes that the majority of this saving will be passed on to business and residential users, as the markets are generally quite competitive in most metropolitan (Zone 1) areas.

“The one thing that we don’t know is how many of Tesltra’s wholesale lines are in Zone 1 versus the other zones,” he adds. “Because of that, it is hard to judge how this will affect their revenues overall, but clearly in Zone 1 areas it is going to affect it to a significant extent.”

With prices pegged, the ACCC believes it will help competing internet companies to provide services to the 11% of premises where Telstra’s network architecture has prevented them from using their own infrastructure.

“As a result of these decisions, end-users can expect to have access to a greater range of competitive fixed-line broadband internet service offerings,” claimed Michael Schaper, acting chairman of the ACCC, in a statement.

Telstra reacted by making a statement to shareholders expressing the company’s disappointment with the decision. The nation’s biggest telco believes that market conditions do not justify increased regulation of the copper network it inherited when it was privatised by the government.

In the statement, Telstra also referred to its focus on completing the structural separation the ACCC requires in order to ratify the $11 billion deal with the National Broadband Network (NBN) Co. Key to that agreement is the eventual decommissioning of Telstra copper and cable networks in areas that receive the NBN.

The ACCC has launched a further inquiry into ADSL pricing, in order to set a final access determination for wholesale pricing. The interim decision pegs prices for the next 12 months, while the final access determination will lock them until 2017.

“What has to happen now is an access determination has to be made. [This] will see out the terms and conditions with which Telstra will provide access to these networks,” says Ovum’s Kennedy. “That’s where I think the focus of the lobbying will now be.”

Before the final access determination is made, the ACCC has invited all interested parties to make a submission before the end of March.

According to the ACCC’s discussion paper on the public inquiry for a final determination, failing to comply with the findings carries severe penalties.

“A breach of either a carrier licence condition or a service provider rule may lead to a pecuniary penalty of up to $10 million for each contravention,” reads a section of the paper. “Action to enforce an access determination may also be taken in the Federal Court.”

The research shows that 1.4 million media tablets were sold in 2011, and the group is projecting that more than 2 million will be sold this year.

“The media tablet audience is also growing rapidly as device proliferation continues unabated, especially within families, where a device is often shared between two or more people,” read a statement from the company. “The rapidly growing audience is creating unprecedented opportunities for media publishers that are delivering their content via dedicated applications.”

Telsyte is predicting that sales will reach 5 million media tablets per year by 2016, and that half of Australia’s population will be using one by then. The study also revealed that 76% of sales last year were Apple’s iPad line of devices.

Last year was a big one for the tablet market, with a number of major releases such as Apple’s iPad 2 in March 2011, as well as the sensation Hewlett Packard caused when it announced it was pulling out of the tablet market, triggering a firesale of its TouchPad devices that caused a massive rush to snap them up for as cheap as $99.

December 2011 also saw the infamous ‘Apple versus Samsung’ series of lawsuits over the Samsung Galaxy Tab 10.1 come to a close, and the Galaxy Tab finally going on sale in Australia.

Liddy D+D, a homewares design company that he runs with wife Alex Liddy, offers a range of dinnerware, coffee mugs and other homewares. Their 15 staff handle products including the Ciroa brand of tabletop products and Miniamo kids’ kitchenwares, as well as a broad range of custom designs; all are designed in Australia, manufactured in China and shipped to retailers in 20 different countries.

With a global business footprint, the company’s operations involve carbon-heavy activities such as logistics and manufacturing. Because most of the company’s suppliers operate offshore and outside the law’s jurisdiction, direct cost increases may be relatively low – but Liddy concedes they’re likely to be a factor as the company is hit from all sides by carbon costs passed down its supply chain.

Industry groups were slamming the tax long before it was passed into law: the Australian Retailers Association, for example, has said the tax “ultimately has no environmental benefit and will mean disastrous economic impacts for Australian retailers.”

Lobbyists from mining, natural resources and other industry representatives have been equally up in arms. But Liddy has gotten great value from his own industry group, the Australian Gift & Homewares Association (AGHA), which has been providing carbon-tax updates for small businesses too busy with day-to-day operations to maintain intimate knowledge of the issue themselves.

“Like most small businesses, we tend to spend most of our time on what we actually do: designing products, looking after staff, looking after customers, and looking after cashflow to survive,” says Liddy. “We’ve been keeping a watchful eye on the carbon tax, but the AGHA have been have been very good in advising us on where the impacts are likely to be.

“Members have been worried about how the carbon tax is going to come through in terms of freight, [supply] costs, electricity costs, and so on.

These are all direct impacts that could raise the cost of running the business quite substantially – and for a small business like ours, none of this is within our control.”

Watching, waiting, counting

While they’ve heard the take-home one-liners from the histrionic political debate on the issue, many small business owners may still be unsure of exactly what was passed on November 8.

The current legislation, called the Clean Energy Bill (CEB), is an emissions trading scheme (ETS) that provides a market-based mechanism by which ‘carbon credits’ can be bought and sold.

While an ETS allows companies to maintain their current high levels of pollution by purchasing credits from more-efficient operators, natural market dynamics will encourage companies to reduce emissions and sell their carbon credits to larger polluters to lower their costs. Currently, Europe, China, parts of the US, and South Korea have an ETS in place or are developing one.

The Australian version, Labor’s CEB, will not implement an ETS until 2015; until then, the scheme will function directly as a tax on the country’s 500 largest polluters. All will be measured and reported upon – as many have already done for years – and levies of $23 per tonne of carbon emissions will be paid to the government as a fixed tax.

Most of this funding will be returned to the community in the form of investments in clean-energy generation, rebates against expected increases in electricity and other prices, and other discounts that Prime Minister Julia Gillard has argued will make the net effect of the tax near to zero. Such remuneration is estimated at around $1.5 billion by the second quarter of the tax’s operation alone.

In an ideal world, a net-zero policy might not be so bad. But many businesses are concerned that, rather than being driven to cut the tax they pay by reducing their emissions, large polluters will simply pass on their carbon-tax costs across their customer base, creating a cascade effect that will leave small-business operators with higher prices on electricity, petrol (which is initially exempt in low quantities), logistics, manufacturing and other services.

With nobody to whom they can pass on their input costs, small businesses will either have to raise their prices – and risk losing customers – or learn to bury the cost hikes in reduced margins, maintaining their pricing to stay competitive. In this way, the tax could have a significant effect even on small businesses that are far too small to be counted within the government’s 500 largest-polluters list, simply from the supply chain effects.

Counting the cost

Liddy, for one, will be talking extensively with his suppliers to assess the real impact of the carbon tax on his operations. This is a good idea for any small business, which can not only use that information to accurately assess the change in their input costs, but it can also canvass the market to identify new suppliers. Specifically ones that have opted to implement CEB-driven change in order to increase their competitiveness through lower costs.

Gerry Magee, senior energy emissions manager with greenhouse-gas consultancy Energy Corporate, predicts the carbon tax will hit small businesses in a number of ways. He believes that electricity bills will go up by approximately three cents per kWh. Magee is also forecasting a 130%–800% increase in the cost of carbon-rich refrigerants used in air conditioners, refrigerators and freezers; petrol price rises for heavy vehicles of around 6c per litre, as well as increases in council rates due to the disposal of packaging, food and other decomposable waste.

In the short term, the carbon tax will cause significant confusion, just as passage of the CEB through the House of Representatives fuelled reports of taxi drivers trying to extract ‘carbon tax surcharges’ from incensed customers. Recognising the potential for price gouging, the government has directed the Australian Competition and Consumer Commission (ACCC) to watch out for price rises exceeding 0.7%, which may be punishable with up to $1.1 million in fines.

Yet with just $12.8m allocated to the ACCC for enforcement, many observers question how much of a role the body will actually be able to play. Because the production of carbon is well understood and the costs easy to derive, it’s a good idea for small businesses to source information about their suppliers’ operations and do their own calculations, track cost spikes, and decide whether price rises are appropriate or not.

“A lot of small businesses will find themselves caught up in the reporting aspects,” Magee warns. “Some companies have to track the emissions on their worksites, and will have to collect that data from their contractors.”

Opportunity beckons

While the carbon tax may represent an increase in input prices for many small businesses, others will find the increased environmental emphasis it fosters to be a vindication or an impetus to improve their own operations.

Liddy, for one, has recently introduced changes such as forcing employees to turn off all computers at night, changing fluorescent lights to more environmentally-sound versions, consolidating all of the operational servers into just one device, and other small initiatives.

“We’re doing all the little things that we can think of that are good for the environment,” he says, “but in the end we have to accept the price changes and make the best of it that we can.”

Facilities-intensive businesses may find greater benefits from using the carbon tax as an impetus to upgrade equipment or revisit operations. This has been the case for Ferguson Plarre Bakehouses, a Victorian bakery franchise that has worked greenhouse-gas reduction into its corporate image for many years and has seen dramatic savings since it moved into a highly efficient new main office in 2007 and began implementing a range of carbon-reduction practices.

Before that move, Ferguson Plarre was producing its products in an old building that was not climate controlled. Erratic temperatures and humidity levels not only made quality control and management of baked-goods stock difficult, but also had fostered quite inefficient environmental practices over the years.

By implementing tight climate controls throughout its entire new facility, Ferguson Plarre has cut total energy consumption by 40% despite now occupying what he refers to as an ‘Esky inside a shed’ that’s three times the size of the old building.

“If we were as inefficient here as we were in the old place, we would be spending $200,000 to $300,000 a year extra in power and gas, and that was the total cost of our environmental initiatives during the build,” Plarre says. “We had a one-year payback.”

Carbon-reduction initiatives are everywhere within the company. A sign at the front of the new bakery, for example, continually displays its electricity, gas and water usage. In addition, efforts to re-route waste by sending old foodstuffs to a local piggery, for example, have cut landfill volumes by 90% and slashed rubbish pickup costs accordingly.

The bakery’s ovens also use ‘heat recovery tunnels’ that route hot air outside the building in summer and direct it internally to heat the building in winter. Other heat exchangers collect heat from freezer and refrigerator motors, then use that to preheat some of the water used in the baking process.

“The first 30% of abatement in emissions is generally achieved by innovation, and thinking about how you can get your energy footprint down,” adds Plarre. “It’s nothing more than implementing lean management at an energy level.

“There are some businesses that don’t have the ease with which to innovate and change their businesses, but there’s a positive return on investment for those that think about it and do more than just paying it lip service. With the initiatives we’ve done, we think we are more than prepared for the carbon tax.”

Other companies see new opportunities not in improving their own operations, but in offering technologies that will help other companies reduce their carbon-tax footprint. Melbourne-based LogicalTech, for example, has developed new low-powered LED panels that can be joined together to produce large digital advertising displays. With no fans and low power consumption, they offer lower running costs compared to existing power-hungry display billboards across Australia and, especially, Asia.

With the carbon tax coming into play, CEO Mario Misso sees great opportunity in spruiking the technology to companies that see growing environmental awareness as a trigger to reduce their own impact.

“It’s a good thing that people are more and more conscious about what environmental footprints they deliver,” he explains. “Even if the tax does nothing else, it will get people to think about how they should be behaving and consuming in the future. It’s going to force a professional group of people to be more regimented in the way they do their business.”

Moving forward

While he sees opportunities from increased environmental awareness, Misso is waiting for more details about the carbon tax legislation in practice before he moves to make dramatic operational changes.

“Until it actually happens and we know what it’s going to look like, we can’t do anything,” he says. “There are software applications you can buy and plug into your financials to manage carbon reporting, but at this stage we’re going to wait and see what transpires.”

The predominance of leases may limit many small businesses from directly modifying the buildings they’re in, but operational and fixtures changes can still deliver benefits. It’s also prudent to revisit service contracts for logistics operations, for example, and leasing arrangements for fleets of cars.

Malcolm Noyle, fleet strategy manager with leasing specialist FleetPartners, warns that improving the carbon footprint of a lease fleet isn’t just about replacing all cars with Toyota Priuses: hybrid cars’ energy-recycling technology works best in stop-and-start traffic, for example, so businesses with many long journeys won’t see their environmental benefits.

“The impacts of the carbon tax are going to bring about a greater focus on cost and overhead,” explains Noyle, noting that the carbon consumption of cars is well understood and calculators are readily available to simplify your impact assessments.

“One option is to change vehicles, but another is to analyse the business case for those trips. Is it necessary for Joe to drive 40km to see a client when the meeting could be done as a videoconference over Skype?”

It’s also important not to get carried away. There’s no point spending more to reduce your carbon footprint than you’ll save in costs. “We won’t do anything that doesn’t generate a commercial return on investment,” Plarre says of his bakehouses.

“What would be the point of being an altruistic, green-loving company and not existing in five years, allowing our less energy-efficient competitors run the market?”

In the end, avoiding the carbon tax is going to be difficult, so small businesses will benefit the most if they figure out the most cost-effective way to embrace environmental initiatives, both internally and externally.

“I can’t see small businesses getting into carbon trading to offset emissions,” says Energy Corporate’s Magee. “The best advice is simply to become more efficient, reduce waste, use less energy, switch over to non greenhouse-gas refrigerants, reduce the amount of organic waste sent to landfill, and so on. It’s the same things we’ve been doing for 20 years – it’s just that now it’s going to cost you more not to do them.”