TRANSCRIPT
Ruth Tate is a UK-trained fashion designer running her own boutique in Sydney’s inner west.
“I come up with the original designs. I do all my own patterns, I make the prototype, do the fittings, grade all the patterns to the individual sizes and the majority of them are made here, or made in Sydney.”
Ms Tate is also among Australia’s two-and-a-half million small business owners feeling the pinch this year as running costs rise.
“Rents have gone up 10 per cent this year. They did last year as well. Fabric costs have gone up, linen in particular. The margin's smaller so yes, it is stressful!”
So, Ms Tate has come up with a clever solution, sharing floor space with the Italian restaurant next door.
“They come in at 5:30, move all of my furniture and my racks, and tables and chairs are stored downstairs, they're all brought upstairs, cutlery is brought in, napkins, glasses, all of that. And then it becomes a restaurant.”
The extra table space brings in more revenue for La Favola (FAR-vol-ah) owned by Italian-born chef Fabio Stefanelli – especially on busy nights like
“So how it works for me and Ruth, we have a deal. She's very nice person and I am very happy to have the collaboration with this fantastic woman. Every people walk inside the Ruth Tate they say ‘Oh wow, this is something new, something special’. And they feel very different atmosphere!”
As well as increasing income for Mr Stefanelli the collaboration offers benefits to Ruth Tate, too!
“Every couple of weeks they have like a private party for the fashion design and this is how we pay back. We pay with our food, we pay with our hospitality, our Italian way to say thank you for that one. Lots of diners, they like what we are doing and we have lots of customer come back the day after to buy the clothes from Ruth.”
For many owner-operators, it’s getting harder by the day to turn a profit, according to Australian Small Business and Family Enterprise Ombudsman Bruce Billson.
Many small businesses are telling me this is as tough as they've experienced it. The recent survey suggested one in four small businesses has no cash reserves. And 46 per cent of small businesses are not profitable right now. But let's also think about those self-employed people, those people who pursue their own livelihoods as contractors, as gig workers, as specialist advisors, we've found that three quarters of those self-employed people are actually taking home less than average total weekly wages. So, no rivers of gold for many in the small and family business community.
So, collaborating with a neighbour to boost income is a win-win for Mr Stefanelli, at a time of constantly rising expenses.
“I feel very, very stressful for the economy. The running costs is completely changed. The electricity almost double the price compared when we opened. The price of the product is very, very high. We almost doubled our food cost compared over two years ago. This winter was disaster - not only for me but I think for many restaurant it was very quiet.”
Sharing space is an initiative welcomed by Small Business Ombudsman Bruce Billson.
“It's a great example of the ingenuity that you see from small and family businesses. It's the kind of ingenuity that drives innovation and improvements in productivity, just what we need right now.”
Recent data from credit reporting bureau Creditorwatch revealed that thousands of private Australian businesses have failed over the past six months due to defaulting on substantial tax debts. CEO Patrick Coghlan explains
“We expect to see ATO tax defaults continue to be registered at larger and larger numbers and of course that's going to have an impact on the number of insolvencies taking place. Pre-Covid, the ATO was owed about $25 billion now, it's over $50 billion, so it's doubled. So, they really need to get on top of that because that money, that cash in the bank that the government is trying to collect, can be used for schools, can be used for housing, can be used to support struggling people and businesses as well.”
Mr Stefanelli has tried cutting costs by buying produce direct from the market. But he says increasing revenue has more impact.
“I think I found a good solution for me and for many other shop because to have a good neighbour is the best way to run a restaurant. I hope this summer is pumping back again because I need to be otherwise it’ll be - it's tough.”
For Mr Stefanelli and Ms Tate collaboration is about more than being good neighbours, they’re becoming good friends, too. And they have this advice for others struggling.
“Be creative and think about ways that you can extend the use of your shop for someone else who might need the extra space.”
“I think it's something smart for small restaurant. Instead of fighting with your neighbour why you don't do collaboration?”
