It’s a question I’m often asked by business owners who are perhaps experiencing growth or are looking to expand their business – how can I raise capital ? In the current economic climate, it’s never been more difficult for SME’s to access this funding from traditional banks and so many business owners are having to think outside the box and look at alternative forms of finance.

There are 6 main options to raise capital that don’t involve bank finance –

Personal Capital

As the business owner you can lend money to your business from your personal wealth. If you have equity in your home and your mortgage allows for it, you could borrow money out of this and lend it to your business for mortgage rates. This is the cheapest form of capital however it comes with a high degree of risk. You’re risking your personal wealth for your business.

External Shareholders

Depending on where your business is in its life cycle you could consider selling equity to a third party or external shareholders. Think about what other values and skill sets your shareholders could also bring to you other than just capital. The downside of this option is that you are diluting your own equity in the business which may not be desirable as the business owner.

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Invoice Financing

Invoice financing is the number one form of business financing in the United States, United Kingdom and Europe and allows a business owner to unlock the cash that’s tied up in their unpaid invoices. The financier gets paid when the debtor makes payment so there are no repayments to be made. Typically, businesses can access up to 90% of the sale value of an invoice whilst continuing to offer credit terms to customers. It’s a powerful form of business funding and allows cash flow to be maintained.

Credit Cards

This is a short term fix with long term pain unless you can afford to repay the full repayments each month. It’s risky and can lead your business into a cycle of debt.

Online Lenders

There are many online lenders in the Australian marketplace and these can be a good option for businesses due to their fast turnaround and not requiring property security. The downside is they can be expensive and as with all loans make sure you can afford the weekly, fortnightly or monthly minimum repayments. As with credit cards, this can lead the business into a cycle of debt and we do see some businesses that have a debt stack, that is multiple loans.

Asset Finance

If your business owns equipment or other assets you may be able to unlock cash against those assets and use that money within your business. This is typically known as a “sale and leaseback” but be aware that you are converting an unencumbered asset into an encumbered asset. However this strategy may have tax benefits that need to be considered.

Crowdfunding

Rather than having significant investors, crowdfunding involves a large number of people funding a business or a project. Marketing is crucial for success as you need to convince people that your project is worthy of their investment. There are four types of crowdfunding – donation, debt, rewards and equity. Donation funding is where people give money without receiving any return. Debt-based funding, donors are repaid with incentivised higher contributions whilst equity funding sees backers receiving a share of the business. Reward-based funding offers tokens or discounts from the company. The disadvantage of crowdfunding is that it takes a huge effort and marketing campaign to get it off the ground and attract the level of funding you need for business growth.

SME owners may currently feel disheartened as access to capital tightens which is why it’s important to look at alternatives. Choose the right type of funding for the current position of your business and make sure it also aligns with your plans for the future. 

By Angus Sedgwick, CEO of OptiPay

Shippit, the leading Australian logistics technology platform, and Wix.com Ltd. , a leading global SaaS platform to create, manage, and grow an online presence, today announced a partnership whereby Australia and Singapore-based eCommerce businesses using Wix can seamlessly connect their online stores to Shippit’s multi-carrier shipping and fulfilment technology. This provides businesses with the tools to ship smart, optimise their fulfilment and have high-quality post-purchase experiences for their customers.

Through the partnership, from storefront to delivery, Wix and Shippit will help eCommerce businesses create a positive customer experience and scale their online operations at every stage of their growth. 

Highlights of the shipping and fulfilment integration include:

• Hassle-free shipping: Retailers have access to Australia’s leading carriers and competitive delivery rates, enabling businesses to offer multiple delivery options at the checkout.
• Synchronised orders: Once an order is shipped, it automatically updates and marks orders as “fulfilled” and adds tracking numbers in the Wix Dashboard, making it easier for businesses to track their orders and keep customers informed.
• Optimising shipping costs: With Shippit’s smart carrier allocation, retailers can automate manual decisions, providing greater control over shipping costs.
• Streamlining operations: Flexible pick and pack workflows and automated packaging decisions, enable consistent, fast, error-free fulfilment.
• Consistent delivery experiences: Powered by Shippit’s automated tracking notifications and an in-house delivery support team, retailers and their customers receive high quality care.

Commenting on the integration, Rob-Hango-Zada, Co-Founder and Co-CEO of Shippit, said: “Delivery is perhaps the biggest differentiator for retailers today. Australians have come to expect quick, transparent and convenient delivery options today; and their tolerance when those expectations aren’t met is low. 

“Shippit exists to bring retailers, carriers and shoppers closer together than ever before, ironing out the creases in a once-fragmented supply chain. Our partnership with Wix, which we’re hugely excited about, is our latest commitment to that mission, and will provide powerful shipping and fulfilment solutions to help Wix customers meet and exceed their customers’ evolving demands – from storefront to delivery.”

Shippit powered over 42 million deliveries in 2022 for over 4,000 retailers including Target, Myer, Cotton On and BIG W. Since its launch in 2014, $25bn worth of ecommerce orders have been fulfilled through Shippit – with 50% of all Australians receiving a delivery powered by Shippit in the last 12 months.

This integration is available to Wix users via the Wix App Market. 

For more information about Shippit, its services and its goal of powering 200 million deliveries without waste by 2025, visit: www.shippit.com/.

Amazon Web Services (AWS) announced its plans to invest AU$13.2 billion in its existing cloud infrastructure in Sydney and Melbourne from 2023 to 2027 to meet growing customer demand for cloud services in Australia.
 
This investment is estimated to contribute AU$35 billion to Australia’s total gross domestic product (GDP) by 2027, according to AWS’s newly launched Economic Impact Study (EIS) for Australia.
 
The Honourable Anthony Albanese, Prime Minister of Australia, said: “Digital transformation is integral to Australia’s future prosperity. A whole-of-nation effort is required to ensure Australia and its citizens and businesses can be resilient, secure, and prosperous.” 
 
“Economic and infrastructure investment from cloud providers like Amazon Web Services (AWS) helps create jobs, advances digital skills, boosts innovation, and uplifts local communities and businesses. The Australian Government acknowledges AWS’s investment into the nation over the past decade, and welcomes its planned investment over the next five years, the full-time jobs supported annually, and contribution to the nation’s GDP.”
 
This planned investment into AWS data centre infrastructure in Australia will support an estimated average of 11,000 full-time equivalent (FTE) jobs at local Australian businesses each year.
 
Rianne Van Veldhuizen, AWS managing director for Australia and New Zealand, said: “For over a decade, AWS has invested billions of dollars into Australia through infrastructure and jobs, and worked closely with the public sector, and local customers and partners, to be a force multiplier across the nation.”
 
“We are committed to positive social and economic impact, investing in local community engagement programs, workforce development initiatives, cloud infrastructure, and renewable energy project investments. Our plan to invest more than AU$13 billion into the country over the next five years will help create more positive ripple effects, further solidifying Australia’s position in the global economy.”

GoTo, the company making IT management, support, and business communication easy with flagship products GoTo Resolve, Rescue, and GoTo Connect, has announced findings from its IT Priorities: 2023 Report. The report, conducted by Frost & Sullivan and commissioned by GoTo, looked at the global trends of 1,000 IT decision-makers at companies with less than 1,000 employees. Among the Key IT Trends in Australia, the survey continues to see businesses consolidating tools, with 81% of Australian respondents considering consolidation of communication and IT management and support tools an important initiative for 2023. As an added benefit, this consolidation helps to alleviate the burden on IT, a goal of 97% of Australian respondents.

As economic uncertainty, scrutinised budgets, and overburdened resources continue to be the norm, IT decision-makers are faced with determining the right set of goals and objectives to maximise their investment, grow their business, and streamline their processes. The survey uncovered four main business objectives to ensure their organisation’s success and support for their employees and customers. These top objectives include growing revenue, improving operational efficiencies, reducing costs, and increasing customer satisfaction. The key trends uncovered in this survey will allow teams to reach these objectives.

“IT management and support solutions will see a lot of re-evaluating by organisations in 2023. Economic uncertainty combined with mounting pressures from customers mean teams will be strategically planning the best steps and investments to make,” says Lindsay Brown, VP and General Manager of APJ, GoTo. “As organisations look forward, it is important to consider the impact their decisions will have on budgets as well as their IT staff and teams, as this will cause a ripple effect through to the rest of the organisation. Consolidation looks to address not only reduced or reprioritised budgets, but also business productivity”.

Key IT Trends in Australia

• Consolidation for enhanced productivity and cost savings: 32% of businesses are planning to switch vendors to reduce costs. 82% of respondents consider consolidation of communication, collaboration, and IT management and support tools an important initiative of the year. 92% have completed, planned, or are in process with these consolidation efforts. The top reason for consolidation was to give solutions to the IT team that are easier to manage increase employee productivity, followed by increasing employee productivity, and then ease to upgrade and scale.
• With choice comes responsibility: Nearly half (42%) said it was very important to consider reducing the burden on IT when choosing new software, compared to only 35% last year. 71% of company leaders say they are more involved in the purchase process of products and tools than they were a year ago.
• Support IT teams with better IT support tools: 52% of organisations say they saw an increase in the IT workload in the past year. 98% of respondents said they want to reduce the burden on IT through the right software choice. 39% of respondents said that their reason for digital tool upgrades and change was driven by IT team preference.
• Hybrid work is still the preferred way to work: While the survey saw almost double the amount of in-office workers compared to when the same question was asked in 2022 (37% now compared to 19% last year), hybrid work still remains the gold standard with nearly half the respondents (47%) splitting their time between home and the office. Two-thirds of offices have official guidelines, with 67% of Australian businesses having a requirement regarding the number of days knowledge-based employees in the hybrid work model should work from the office.
• Find new ways to prioritise the customer: While businesses will only function if the right IT support and communication tools are enabled for employees, it’s equally important that externally facing teams have the right technology to seamlessly support customers. 63% of respondents plan to spend more on customer experience (CX) technology in 2023 than they did in 2022.
• Partners play a key role in decision-making: 46% of businesses choose a Partner versus 29% going to the solution provider directly to find new business communication and IT support tools.

For more information about GoTo’s IT Priorities Report, please visit: www.goto.com/it-priorities-report.

BABYBOO, an Australian ecommerce juggernaut with a global reputation that sells to customers in 145 countries, is part of the radical new breed of disruptors in the fashion-tech sphere. When Argylica Conditsis first launched her brand from her bedroom with $1000 she’d saved from her job at Pizza Hut, little did she realise she was sitting on a burgeoning multimillion-dollar global business destined for success. Then, a fresh-faced and determined 17-year-old from Baulkham Hills, today, Argylica (now 29), has turned that initial investment into a highly profitable global fashion empire that more than doubles its revenue year on year (135%+) with industry-leading growth and no external funding.

Built from the ground-up alongside her brother, William Conditsis (27), BABYBOO is one of Australia’s fastest growing tech companies with three global teams, 45 employees, 1.5M social media followers and company valuation of over $60M. Uniquely positioned in the fashion e-commerce space, each BABYBOO collection takes 6-8 months to create, from the first sketch to the final stitch. Designed in Australia with an extensive range of women’s clothing and accessories that resonates with a global audience, BABYBOO have cemented themself as a millennial and Gen Y phenomenon with cult-like appeal.

“When I started BABYBOO, I had no prior experience in the e-commerce or fashion industries, zero funding, zero business or corporate experience, no connections, no mentors, no social media followers, no capital; I was hungry, passionate…and perhaps a little naive,” says Argylica Conditsis. “However, I’ve always had a creative personality and always loved fashion and think one of the greatest skills in the 21st century is determination, thinking big and acting bold.”

Nurturing and leading a multimillion-dollar company at such a young age has had its challenges, but it’s an attribute that’s been crucial to BABYBOO’s skyrocket success. Proving there’s tremendous power when two leaders take charge, Argylica and William both have extremely hands-on roles within the daily operations, each playing a crucial part in the company’s innovation, growth and success, setting them decades ahead of their competitors while amassing a net worth in excess of $40M.

“As a young, female entrepreneur I am fiercely independent-minded and innovative, however all my decisions are guided by the BABYBOO community. The culture we’ve cultivated has a shared purpose among its members, and what I’ve learnt is to constantly listen and learn from these people and adapt, be it our team or our customers. At BABYBOO, we don’t just see ourselves as a website where you come to buy a dress – we see ourselves as a brand that fulfills aspirations. Our obsession with achieving this is clear on paper – what we used to turnover in a year we achieve in a month,” says Argylica.

With the goal of using their platform to pay it forward and inspire women and girls all around the world to do great things, disrupt and be confident, BABYBOO’s weapon for its extraordinary victory is optimising social media and making a progressive contribution to their audience via body positivity and showcasing people of all cultures.  

 “The face of retail is changing dramatically with countless established players losing their competitive edge or struggling to make a profit amid rising costs. At BABYBOO, we’ve used it as an opportunity to do things differently. For example, while the pandemic brought an influx of ‘online retail-therapy’ demands, our sales initially took a hit as we are predominantly an event-wear brand. However, we pivoted quickly and diversified our product range, introducing a lounge-wear collection that then saw site visits increase by 54% and revenue increase by 44% in the 30 days post-campaign compared to the 30 days prior,” says William Conditsis.

Outside of BABYBOO’s financial successes, giving back and inclusivity is also a pillar for the brand, such as promoting diversity in the workplace and partnering with not-for-profit organisations, including donating $2M worth of usable inventory to multiple charities over the past 24 months.

Living proof that a degree isn’t the only road travelled to success, both Argylica and William are university drop-outs that turned their passion into an 8-figure empire. Argylica is the Founder, CEO and Co-Owner of BABYBOO, leading the roles of Creative Director  and Head of Product with a focus on setting vision and growth-hacking. William is the Director & Co-Owner, leading the roles of General Manager and Head of Brand with a focus on scalability, brand positioning and ensuring all departments operate cohesively. In 2021, BABYBOO was recognised as the 12th Fasted Growing Companies in Australia by the AFR and part of the 100 Fast Growing Companies in Asia Pacific by Deloitte.

The latest National Housing Finance Investment Corporation (NHFIC) State of the Nation’s Housing 2022-23 report confirms builders’ concerns about achieving Australia’s housing needs.

Master Builders Australia CEO Denita Wawn said the report is more evidence that we are falling well short of the 200,000 homes needed each year to keep up with demand and address housing affordability challenges.

“Rising interest rates and declining sales for new home construction is weakening the pipeline of new housing, which is compounded by a stronger than anticipated recovery in migration.

“There is fragility and volatility in the industry at the moment that has been a consequence of businesses working predominantly with fixed price contracts that were set pre-covid.

“The industry has been relatively resilient over the last decade. Some of the insolvency data we are seeing coming through is a reflection of the challenges over the last 18 months, and we hope the worst is behind us.

“But we are alert to the combination of rising inflation and interest rates, labour shortages and unnecessary government hurdles which are making it difficult for builders.

“A strong building industry is the foundation of a strong economy. The inextricable ties between construction activity and the broader health of the economy are again on display in the current environment.

“To achieve better housing affordability and keep up with demand, changes need to be made to the way we do things, now and over the long term.

“The government needs to take the necessary steps to ensure interest rates do not need to rise any further and take some of the heavy lifting of our correction off mortgage holders and business owners. From here, there are no easy choices.

“There needs to be a conversation around fixed-price contracts and appropriate risk-sharing between banks, developers and builders,” said Ms Wawn.

Master Builders’ Delivering the housing needs for all Australians recommends policies around housing supply, workforce, supply chain risk and cost pressures, simplifying regulatory settings that support investment in housing and business productivity.

“Governments must lift the handbrake on the building and construction industry by bringing down the cost of doing business.

“We need around half a million new entrants into our industry by 2026 to ensure homes get built, and the broader construction ecosystem of infrastructure and commercial premises can be delivered.

“Governments need to look at what impact their regulations and policies have on the cost of building homes and on the cost of building social infrastructure; that includes industrial relations laws, the cost of planning and the need for more titled land.

“The Housing Accord is the start of this national coordination, but we can’t wait until 2024; action by states is needed now.

“There is no silver bullet; this will take a concerted effort by all levels of government working in collaboration with industry,” said Ms Wawn.