Australia has 2.2 million businesses, of which 2,065,523 are defined as small businesses (employing less than 19 people). The ATO statistics show 96.7% of businesses use a registered tax agent to lodge their business tax returns.
So, with 96.7% of businesses using a registered tax agent, why are 260,000 small businesses failing every year? It really comes down to three factors:
- The majority of business clients get no business advice from their accountant – just the standard compliance services of bookkeeping, accounting, BAS and tax preparation.
- Of those rare businesses that receive some business advice from their accountant, it has no impact on the business’s success or failure rate as the advice is not up to standard.
- Small businesses receiving business advice and failing to implement. As Rob Nixon (formerly of Panalitix and also a co-founder) would say ‘they are suffering from FTI – failure to implement’.