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The Forum > General Discussion > Australian tourism, from backpackers haven, to backpackers heaven.

Australian tourism, from backpackers haven, to backpackers heaven.

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*Yes it is. The cost of doing business is built into the price and that means all costs, including penalty rates. The cost of penalty rates is spread during the week.*

Ah Pelican, no wonder you joined the public service :)

If only running a business were that simple. You forget that
many businesses are price takers, they can't just increase prices
at will, to add extra costs.

Now take veggie growers, who are pushed by markets to have produce
at the market, bright and early Monday morning. Under our new
cushy labour laws, they will face huge weekend penalty rates.

So either the family will have to do it, or the figures simply
won't add up anymore. Many of these guys have one thing going for
them, as they have continued to grow their produce, city boundaries
have spread towards them, so their real estate value has gone up.

So alot of them will simply say stuff it, we'll forget growing
produce, let somebody else run at a loss, we'll flog the real estate
and retire.

You Pelican, will then be bleating on OLO, about Australia importing
produce from overseas, because growers won't grow it locally.

Well duh, the people making up these rules, have never or hardly
run a business between them. They simply haven't thought through
the ramifications of their well meant actions.

The law of unintended consequences shines brightly, but they will
learn the hard way.
Posted by Yabby, Monday, 18 April 2011 5:56:14 PM
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Yabby
You are the one bleating. Agriculture is a different sort of business.

I can tell you from my own research when running a business in the late 90s, and currently in the process of doing some small business courses that a cup of take-away coffee (given rehctub mentioned coffee) generally has a 200-400% profit margin.

Yabby you can carp on all you like but does not the scenario you outlined above in relation to agricultural businesses set some alarm bells ringing about the whole system?

And I will continue to 'bleat' on about imports because it is imports and competition with Third World conditions that make life difficult for farmers. Your worldview is in fact the cause of the problem and is why our economy is now so price focussed and quality and service has gone the way of the dinosaurs. Farmers were doing a lot better when I was a kid and were not being ripped off by their own governments.

But Yabby, I accept that you will never change your POV. If you had run a business other than agriculture you might have a different perspective on retail. Not all businesses fit into your narrow experience.
Posted by pelican, Monday, 18 April 2011 6:20:47 PM
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Err Pelican, just to clear up a slight misunderstanding. Farming
is my hobby and passion, certainly not how I made money. My claim
to fame is running a globally competitive, award winning seafood export business,
exporting Australian quality around the world, up against players
from everywhere, including China. I focussed on high class customers
and their needs, from Hong Kong to the skislopes of Davos.

Being a global player, certainly teaches you a few things, I can
assure you.

8 years ago I sold that business, interestingly the bloke who bought
it, shut it down some months ago, rising costs being one of the reasons.

The quality/price thinggy had to stack up, or customers went elsewhere.
We could not just pass on rising local costs. We had
to think up ways of doing things better, faster, cheaper, to
survive. Every movement a staff member made, was evaluated to
see how something could be done more efficiently and not compromise
our quality. This was cut throat stuff, not selling cups of coffee.

We in Australia live in dreamland. We featherbed workers with the
cushiest labour laws on the planet, then wonder why businesses go
offshore or close.

Most farmers in Australia produce for the export market, not for
the local one. Beef, lamb, wool, wheat, oats, barley, cotton,
and a few others, being the main exports. Two thirds of what
we grow is exported at international prices. Forcing farmers to
pay high prices for their inputs, from machinery to chemicals,
to featherbed local industry, is what has driven so many farmers
broke in the first place.
Posted by Yabby, Monday, 18 April 2011 7:08:31 PM
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Pelican I think you would be well advised to try a different course provider, or pay more attention.

If they have told you that the profit margin on a cup of coffee is 200% to 400% they are not much use. Profit margin depends on the difference between income, and the cost of earning that income.

A cup of coffee may have a markup of up to 400%, but that doesn't have much to do with profit. Labour costs may exceed the cost of materials, particularly if you have not spent enough on your decor to attract sufficient trade to fully utilise your labour.

I used to run tourists boats that could earn over $20,000 a day, with up to $12000 of that gross profit. However they cost $2200 a day sitting against the wharf, $3000 if I put a crew on them, up to $200,000 a week when in dry dock for maintenance. It did not take too much unserviceability do push them into loss, & a pilot strike drove dozens of such operations into bankruptcy.

As most backpackers wanted to do an outer reef trip, you could say they acted as a conduit to transfer tomato growers gross earnings to our gross earnings.

I knew quite a few of those tomato growers. They reckoned that for about half the year they lost a little on their crop. For about 4 months they made a little. Then, usually due to the misfortune of some where else, where the crops failed, they did quite well for a month or two.

Their only problem was they had to have a crop producing every day, all year, to be able to cash in when the good times came. I think they are mad masochists to work that hard, with no certainty of a profit at the end.
Posted by Hasbeen, Monday, 18 April 2011 9:14:43 PM
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Hasbeen don't take my word for it go and speak to those in the hospitality industry. Do some research, ask around - coffee is a big money spinner.

Yabby
You are apt to play the person and not the ball making assumptions about people you don't know based on a few personal tid bits revealed on this forum. I am not about to post my resume online.

If your beliefs and views are that strong they should be able to stand on their own merit without resorting to taking cheap shots at someone just because they happened to spend some time in the public service. The knowledge gained in both the private and public sector have been invaluable and any experience one gains in their lifetime should be welcomed not diminished by someone who wouldn't know the first thing about the various government agencies but will be the first one to call the police if they need help or seek a farming subsidy if one is going begging.
Posted by pelican, Tuesday, 19 April 2011 12:13:09 AM
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pelican,
A coffee in the 90's averaged $2.65 No GST. Today, that same cup averages $4.00 less GST $3.55. That's in 10 plus years. It should cost $7.00 today if prices kept up with costs.

Belly, tax is calculated on an annual salary. If one works for three months at $50K per year salary, then zero income, they get most, if not all their tax back. It is a wrought used by many in this country. They work for 6 to 8 months, have the rest of the year off and get a huge tax refund.

BTW. Why can't those on the dole hold the stop go signs? After all, we are apparently screaming for good workers.

BTW, if you have some buyers please send them my way. After all, I can earn $40 per hour cleaning toilets on sundays.

Yabby, you are spot on. These people just don't get the big picture. It's not their fault, most of them are labor supporters and, like labor, they are re-active, not pro-active. You know, the old 'we will assess what went wrong once it's broken' attitude, or at least we will hold an enquiry into why it went wrong so we can create a few worthless jobs.

It's happening as we speak.

pelican, you say coffee is a big spinner. It would be if it sold for the $7 it should.

What you don't get is that a coffee maker on say $25 and our is capable of making say 120 cups an hour. Gross return $426. Wage cost 6%.

Now in slow times they may only make four cups an hour, gross return $14.24, wage cost minus 176%. There in lies the problem.

You see employers only get paid from profits. Employees get paid to be there.

Trouble is, if they have two or three very busy hours in a row, they expect a bonus. Go figure.

So pelican may I suggest you don't take a knife to a gun fight as you are dealing with industry experts, not side line commentators like yourself.

Continued
Posted by rehctub, Tuesday, 19 April 2011 6:41:50 AM
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