By Leon Gettler >>

WITH NEWSPAPERS closing down print editions in favour of online – or just closing down – more newsagents are becoming retailers, even opening coffee shops.

Ben Kearney, the CEO of the Australian Lottery and Newsagents Association (ALNA), Australia’s national industry body for the newsagent industry said this is becoming the way of the future.

He said the newspaper was now struggling with its margins, which affects the increases that the newsagents are able to get. 

He said when he started in the industry 10 years ago, he thought the situation with newspapers and media would have a more serious enormous impact.

“What I’ve realised is they’re more resilient as retailers than I had expected,” Mr Kearney told Talking Business.

“There is no doubt that traditional print media is a big challenge and will be an ongoing challenge for news agency businesses, but what we have seen is our members have certainly demonstrated a capacity to diversify their business and change their business model to adapt to that loss in revenue from those traditional print products.”

He said most of those that are succeeding have moved strongly into the area of gift products.

“If they’re succeeding, they’re outcompeting their local toy store, they’re outcompeting their local gift store, they’re introducing hybrid models,” Mr Kearney said.

He said a number of newsagents had opened coffee shops in their stores as part of the newsagency.

“We have seen some that are newsagents/bookshops, we have examples of newsagent/pharmacy,” he said.

“The retailers that are succeeding are just becoming better retailers.”

Mr Kearney said the media was changing its models and newsagents were hoping to work with media companies to develop partnerships,

He said there was scope for newspapers to get back to working closer with their communities which would see them working with newsagents.

“Newspapers have become far more a commoditized product. There is an appetite in communities for longer form journalism, particularly when it relates to communities,” Mr Kearney said. 

He said the ALNA was now conducting research at the University of Technology Sydney on how to leverage the traditional newsagent’s role as a community hub for news.

“The thing that has kept news agents resilient to a degree, and one of the things we do really well – particularly in local communities – is that we sell basic human interaction,” he said.

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness.

MOST BUSINESSES are increasingly reliant on plain text e-mails for vital internal communication and record-keeping – but it may be a mistake.

Plain text e-mails are not what employees need or want, according to research developed by software company, TechSmith.

TechSmith CEO, Wendy Hamilton said adding visual content to everyday tasks like e-mail and presentations has been shown to increase productivity and engagement. 

“E-mail is the lifeblood of how we communicate professionally, and that will remain true … but with visual evolution, adding screenshots or a short video to e-mails fosters better understanding, reducing the need for follow-up,” Ms Hamilton said.

“As the workforce becomes increasingly digitally savvy, visuals and video are necessary for employee engagement.

“Businesses that fail to adapt may find themselves lagging in productivity and even losing top talent.” 

TechSmith’s research showed that using visual content, such as short videos and static images, over text alone, saves time and improves performance.  Despite the growing desire for more visual content in workplace communications, research undertaken amongst 4,500 office workers, showed many businesses were sending more plain-text emails — and that may be causing problems.  

A scientific trial to find out how visual communications impacts business performance found two thirds (67 percent) of employees were better at completing tasks when communicated with by video or text with images than by plain text.

Ms Hamilton said ‘disappointing’ communications were impacting employee engagement as well. Over a third (36%) of employees have been demotivated by poor company-wide communications, she said.

“More than a third (38%) of employees believe they would be more engaged if corporate communications were more inspiring than they are today,” Ms Hamilton said.

The research showed half (50%) of companies have increased their use of email recently; almost half (47%) of employees thought their company relied on plain-text email to communicate; and only a quarter (25%) of employees had received a video message within their companies.

“Employees are in a constant barrage of content that often threatens to overwhelm them,” Ms Hamilton said. “And, despite evidence that visual content is easier to digest and increases productivity and engagement, today’s businesses are twice as likely to be increasing their use of plain-text email over any other type of communication.”  

The business research utilised by TechSmith was conducted among 4,500 office workers from across Australia, Canada, Germany, Austria, Switzerland, France, the UK, and US in December 2017.  The scientific laboratory test was conducted amongst 125 office workers in January 2018 by an award-winning doctor in behavioural economics, Alastair Goode.

www.techsmith.com

Business communication methods that have increased in use over recent years:

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By Peter Maynard >>

IF YOU THINK cyber security is an IT issue, think again. Fast.

Despite two decades of information technology (IT) weaponry, cybercrime attacks and breaches are only escalating. The reason has surprisingly little to do with software.

Fortunately, cybercrime is starting to be identified for what it truly is, a whole-of-organisation risk that requires a much broader strategy than a good firewall and some anti-virus software. 

Good cyber security guidance has always been difficult for small-and-medium enterprises (SMEs). Typically, it’s via internal IT teams or external IT providers. These guys will often have the latest tech solutions, but it’s simply not enough anymore.

Cyber criminals have shifted focus from frontal tech attacks to the largely unguarded side door, otherwise known as you and your people. Fake websites, fake emails, dangerous attachments, insecure links… this is known as ‘social engineering’ and it’s come a long way since African finance ministers’ cousins. One clever phone call and an attacker has access to your computer network, your credentials, your bank accounts, your data – your entire business.

Then there’s the question of what to do if you are breached. After all, what does your IT team know about managing reputation loss, responding to a regulator, or preparing to front the media and clients? Not a lot and nor should they. That’s not their job.

But maybe you think you’re too small to target or have nothing worth stealing. You’re not alone. Nearly 60 percent of SMEs don’t consider cyber crime to be a big risk to their business. About 44 percent don’t even consider strong security to be a priority – and 77 percent of SMEs believe their company is safe from an attack.

This is perfect for cyber criminals who can easily piece together masses of ‘small’ information from hundreds of organisations, or use smaller, easily-breached businesses to move up the supply chain to larger organisations or governments.

The fact is every organisation has something of value (its crown jewels), and so cyber security must be on the radar of every SME. In 2017 the number of small businesses that experienced attacks went from 55 percent to 61 percent. In one year.

For many of them, it was too late.  Reputations destroyed; customer confidence lost; significant financial, data and productivity losses. In fact 60 percent of SMEs go out of business within six months of a data breach.

Whether your organisation is hundreds of people or just you, the numbers say you will be hit by cyber attacks. Some you won’t even notice. And even if you have invested in important security controls (defences) like next-generation firewalls, intrusion prevention systems, anti-virus software and monitoring tools, it’s important to understand they don’t provide a full defence. Nor do they address the whole range of other risk mitigation components and strategies you need to manage the risk that cyber attacks represent to your business.

No matter what size your organisation, the best starting point is simply understanding the eight critical areas that a holistic cyber risk management strategy should be addressing.

1. Security culture – Cyber security is a risk issue that spans every part of your organisation and everyone has a role to play. How important is security to everyone in your business?
2. Self Awareness – Every business irrespective of their size or sector has ‘crown jewels’ or digital assets of value. How aware are you of your digital assets and what you have to lose?
3. External Awareness – The cyber security landscape is constantly changing. How aware are you of the threats and risks that your business will need to defend and protect against?
4. Identifying your Digital Assets – Knowing what you have to protect is fundamental to being able defend your business. Do you know what digital assets you have, where they are and who has access to them?
5. Preparing to Protect – Using technology solutions to protect against cyber attack is essential. Do you have the right tools in place to protect your business and its digital assets?
6. Ability to Detect Intrusion – Despite the best preparation, even the biggest get breached. How well are you set up to detect an intrusion before it can cause serious harm?
7. Ability to Respond - Cyber attacks are seemingly unavoidable for most businesses. How well prepared is your business to respond to the threats and minimise the damage?
8. Ability to Recover – You’ve been breached. How do you go about rebuilding your business and your reputation? Who tells your clients? What’s your plan?

If you’re like most businesses, you focus on number five – your tech solutions. But the other seven are equally important. 

Admittedly, this means a longer to-do list. The Australian Small Business and Family Enterprise Ombudsman released a great resource earlier this year titled Cyber Security: The Small Business Best Practice Guide. Their recommendation is to begin with an assessment of your business’s current cyber security.

A good cyber security evaluation should help you to prioritise your limited time, budget and resources by giving you a clear understanding of what you’re doing well and where your gaps are across your whole cyber security profile, not just your tech.

With this, you can develop a strong cyber risk management strategy – the goal for every SME. Without it, you will only ever be shooting from the hip.

So while it’s true the days of governments and software companies protecting us from cyber attacks are over, the good news is you can take control of your cyber security. With a little time and planning it doesn’t have to be hard or expensive. Regardless of what size you are, your turnover or your sector, the principals are the same.

And the most important thing you can do right now… is start!

Peter Maynard is co-founder and CEO of Australian cyber risk management advisory firm, CyberMetrix. CyberMetrix assists individuals and organisations of all sizes to understand and assess their cyber risk and partners with them to grow their risk management capability. https://cybermetrix.com.au

EXTRA >>

Why SMEs? Why now?

To the average cyber criminal, SMEs are the perfect soft target. They know they’re time poor and don’t have access to the same resources as the big guys. They typically think their firewall (router) and antivirus is enough or that they too small to target. And statistically, they’ll only try to do something after you’ve been attacked.

• 43% of cyber attacks target small business.
• 93% of breaches caused by human error.
• Over 50% of small businesses experienced a breach in 2017.
• 99% of computers are vulnerable to exploit kits.
• Attackers often target thousands of businesses at a time hoping one will bite.
• Attackers can use small business to infiltrate big organisations: Target in the USA was breached via an air conditioning contractor.
• On average it takes 120 days for a business to discover a data breach.

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BUDGET 2018 >>

MANAGING partner of Australian venture capital group OneVentures, Anne-Marie Birkill, has opened up wider discussion on the treatment of research and development after the changes announced in the 2018 Federal Budget.

“We are strong advocates for the R&D tax incentive, believing it provides capital constrained, research intensive companies like those in our portfolio with important funding to ensure they achieve their R&D objectives,” Ms Birkill said.

“We have many examples of companies that have continued to undertake R&D in Australia rather than moving to less expensive jurisdictions because the R&D tax incentive makes undertaking R&D in Australia economically viable.  

“Ideally, we would prefer there was no cap for research intensive companies however, we are realists and understand the government cannot have an uncapped and ever-expanding obligation.

“But one of the things that seems to have escaped commentary is that the R&D tax refund funds job creation – and those new employees pay tax; often at high rates as these are highly skilled roles.

“This means that the R&D tax refund is significantly offset by PAYG tax. And of course, there are all the other benefits of more R&D being done in Australia – including wealth and asset creation.”

The Federal Government announced changes to the R&D tax incentive that come into effect from July 1 this year.

A $4 million annual cap will be introduced on cash refunds for R&D claimants with aggregated annual turnover of less than $20 million. Amounts that are in excess of the cap will become a non-refundable tax offset and can be carried forward into future income years.

To be excluded are R&D tax offsets for clinical trials, from the $4 million cap on cash refunds, recognising the critical role of R&D expenditure on clinical trials in developing life changing drugs and devices.

The refundable R&D tax offset is to be amended so it is a premium of 13.5 percentage points above the claimant's company tax rate for that year.

OneVentures has been directly and indirectly contributing to the debate on Australia’s R&D tax system for several years, largely through its membership of the Australian Venture Capital and Private Equity Association Limited (AVCAL). Ms Birkill is a director of AVCAL and a member of its VC working group.

www.budget.gov.au

www.one-ventures.com.au

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