Produced in collaboration with SBS Chinese
TRANSCRIPT
Business is brisk at a Chinese restaurant in Sydney’s west. It’s one of many run by Jennifer Du, who migrated from China’s Shanghai.
“In China maybe we use dim sim as a main food, but here we use dim sim as an entree. So, then stir fry, then bit of seafood. So, it was very successful as a concept.”
It’s so successful, in fact, that since 2007 Ms Du has grown her business empire from one restaurant in Sydney’s Ashfield to 19 separate venues today – 11 of them franchises.
Taste of Shanghai Group celebrates the flavours of Northern China and Shanghai, and was inspired by her chef grandfather.
“Because he's working for a five star hotel back to that time. So, every dish, every meal was fantastic. I always thinking ‘thank you for my grandpa’. He look after me when I was young and he gives me so many good memories. Then it's given me sort of a spritz to carry on this business.”
However, Ms Du admits running a large hospitality chain this year isn’t easy. Like most of Australia’s 2.5 million small business owners she is battling higher costs - struggling to
“We can't do anything. So, at the moment that part of the bill still very high. We try to increase a little bit to the menu price. But you've got your competitor as well so you can't just like using the calculation to do it, you have to watch the market as well. So that makes net profit really tight.”
According to a recent Asia-Pacific survey by CPA Australia, rising costs are the biggest impost on Australian entrepreneurs. Gavan Ord is its senior Business and Investment Policy Advisor.
“In terms of the costs that had the most detriment to their business, the actual number one cost that had the most detriment was fuel, followed by utility costs and insurance.”
And that’s not all – inflation may be below four per cent now but food prices have soared and remain high. Dave Yan owns De Lovely Cake Designs in Chatswood.
“In the baking industry, our raw materials have generally increased by 30 to 40 per cent in recent years, with some materials even doubling. Unsalted butter, previously you could buy a 500-gram block for $4, now it's $8. So, these are commonly used baking ingredients in our daily lives, and their prices have doubled. Considering this, the pressure on our business is significant!”
With business insolvencies rising, Australian credit reporting agency CreditorWatch says food and beverage outlets remain most at risk. CEO Patrick Coghlan explains.
“There's no doubt that there's certainly an elevated number of insolvencies and administrations at the moment and that will continue to climb. Unfortunately, hospitality: running a restaurant, bar, cafe is tough even in boom times. That's the honest truth and the brutal truth about it. So, when you then have all of these macroeconomic headwinds, inflation really starting to bite the consumers spending patterns, it becomes extremely difficult, near impossible for some to actually run a profitable business.”
With interest rates on hold and no cuts in sight – what kind of relief can the federal government offer in the May budget? CPA Australia’s Gavan Ord:
“The first focus of the government in this budget is to alleviate the cost pressures on business. Small businesses face similar cost pressures that households are facing. And these small businesses operate on very tight margins already. The small business energy rebate that could be extended again, but I think governments need to look more deeply at some of the costs they impose on business.”
Taste of Shanghai’s Jennifer Du says running a business seven days a week requires a more flexible approach to staffing.
“I would like government to cut to that penalty rate in a simple way to help us to pass this difficult time. It is really shortage of the labour makes things very difficult. Mainly in kitchen side, the dim sim side, also the front desk it’s really short of staff. We very much monitor our every week's profit and loss sheet. If it's too high, we come back to tell them look at your things, whether it's a wastage or whether it's too many people in one position, we got to adjust them. So, that is very important part of the figures in our business.”
CPA Australia’s Gavan Ord says addressing Australia’s staff shortage is a priority – particularly in hospitality and in construction where up to half a million extra workers are needed.
“It needs to come from migration, it needs to come from the training, upskilling of domestic workforce. And we also need to look at what we can do to encourage and support older workers to remain in the workforce. In terms of particular people coming into Australia and finding it hard to find work in their area of expertise, I think what the government could do, and working with industry associations, they could run training programs to upskill new migrants, new skilled migrants in the way the Australian workforce operates, understanding Australian laws and Australian conditions.”
CreditorWatch CEO Patrick Coghlan says despite an interest rate cut looking less likely this year, there are some green shoots.
“Where there is some positivity is those stage three tax cuts that are coming from 1st of July. So, if nothing else that brings relief and that's what it's designed to do in a sort of ideal scenario, it encourages some responsible spend that flows through to those industries that are relying on discretionary spend. But, of course, we don't want it to put pressure on the inflation read.”
Jennifer Du migrated 35 years ago and she knows first-hand how hard it can be building a successful hospitality chain. She has this advice for those struggling.
“I came in 1989, at that time the interest rate is 17 point something, 18 [per cent]. So that's why I'm not really scared of that part. To be successful is … I do involve in every detail of the business. You think you are owner, you can sit back, go to the holiday. Not in that way. Every single detail, you got to know!”
