Business SA hoping for ‘remarkable turnaround’
Business SA lost a third of its staff and revenue dropped by more than 15 per cent last financial year.
Business SA lost a third of its staff and revenue dropped by more than 15 per cent last financial year, but chief executive Martin Haese has his sights set on a “remarkable turnaround” this year which he says is already gaining traction.
The organisation’s financial report for the year ending June 30 shows the loss of a key training contract and a restructure led to a fall in staff numbers from about 75 to 50.
But Mr Haese said staff numbers had climbed back to 60 and member numbers had grown by about 860 over the calendar year, aided by a new membership structure introduced in September.
Mr Haese said the organisation, which was “largely privately funded” by fees from members, had proved its ability to be responsive to the needs of members and the business community over the past 12 months, when the COVID-driven demand was enormous.
He said the proof would be in the figures at the end of this financial year, but the organisation was on a path to long term financial sustainability.
“Business SA is not driven by profit for profit’s sake, but it must be more driven by financial sustainability otherwise it’s not in a position to service its members, and we’re on that path,’’ he said.
“In so many ways last financial year was planning and implementation. We put a new strategic plan in place, we put a number of new governance protocols in place. We’ve done a lot in terms of looking at the strength of our team and aligning our team’s competencies with that strategic plan.’’
Mr Haese said “the pendulum has shifted materially’’ in the current financial year from a bottom line and cash perspective.
“We’re exceeding actual versus budget on a year-to-date basis quite strongly, so we want to make sure we continue that trajectory,’’ he said.
“Last year was a real coalface year because the need was so acute, for both our advocacy services and also for our commercial services.’’
Mr Haese said the membership growth was strong, and the organisation was committed to providing value to all members.
The financial report shows that the business lobby group experienced a $1.7 million fall in revenue to $8.67 million.
The wind-down of a training contract with Apprenticeship Support Australia, which contributed $2.24 million in 2018-19 and about $1 million less the following year had a large impact.
That contract is now over and will contribute nothing this financial year.
Business SA’s report says there was also a rationalisation of executive and support roles.
The organisation made an operational loss of $34,000, compared to a loss of $98,000 the previous year, however the loss increases to $527,000 once depreciation is factored in.
Staff costs fell from $7.89 million to $6.63 million.
“After several years of financial losses, the operating performance of the organisation is on an improved financial trajectory, the full benefits of which will not be realised until the 2020-21 financial year,’’ the report says.
The report says Business SA’s strategic plan lays the foundation for a “leaner, more agile and more relevant organisation’’.
“One of the key initiatives is the new membership model which is launched in the 2020-21 financial year, the objective of which will be to better align Business SA’s products and services with the stage of life of a member’s enterprise.’’
That new membership model was launched in September last year and the organisation also launched a business broking joint venture with Ray White this financial year, which will aid business sales.
Key management remuneration increased from $1.22 million to $1.32 million, which includes compensation for board members.
Business SA refused to reveal what its senior executives including Mr Haese, are paid.
The organisation received $540,000 in government stimulus income, including JobKeeper and Cashflow Boost stimulus payments.