Here we have the libs and labor going head to head about what they feel is a small business, with the libs saying ten million in turnover, while labor says leave it at the two million as is currently the case.

Surely a better way of determining a small business would be to use a 'before tax profit figure' as not all small businesses are the same.

As an example, a business with an annual turnover of twenty million, with a 2% margin, is not as profitable as one with a two million turnover with a 75% margin.

The first has a gross profit of $400K, while the second a GP of 1.5 million. Why is the second a small business, and the first not?

Surely the amount one makes effects outcomes more than the amount one sells.

Your idea does not make sense Rehctub, as then a large company making a loss, would be classified as a small business, which is clearly not the case.

Yes Yabby, but that's because you are using the current method of defining a small business and this is my point.

Would it not be more reflective to use before tax income to define the size of a business?

Why turnover?

There are some businesses with huge turnovers who employ just a few. They buy and sell but warehouse nothing. They might turn over twenty million, but only make half a million in taxable income, what makes them a large business.

Butch, don't you think it would be better to define a small business as one that rips off the tax system, exploits its workers by underpaying with cash in hand. Sorry that's a shonky business a bit different.

Gee Paul, I didn't expect that!

Just remember Paul, if you shop at a market, or even online, chances are you are contributing to the very thing you hate. Food for thought!

The point is a small business should be defined by the amount of pre tax profits made, not turnover. Its just my opinion.

Butch, so in 2014 QANTAS was a small business, a very small business, with a whopping loss of $2.8 billion, that would make QANTAS a non business in fact. But like the Phoenix rising from the ashes, one year later, QANTAS posted a profit of $557 million, making them a very big business. What's it to be, what kind of business is QANTAS?

Butch,

Strangely I find myself agreeing with Paul. With profits fluctuating, turnover, while not perfect is a preferable measure. The values vary widely between commonwealth, ATO and business groups.

Well Paul, as I always say, I am happy to be proven wrong, and it would appear that your QANTAS argument has merit. About the only argument I could offer is that they are a publicly listed company, but its splitting hairs.

Butch, that's very big of you to concede that you may be in error on the definition of a small business. I was just about to mention the governments own business Australia Post, which in went from a 30 year big business to a small business posting a $222 million loss in 2015. I believe it will deliver a small profit this year, making it a medium size business.
What is the Australian government doing running a small business?

There are clearly many easily defined small businesses in Australia, as there are clearly many big businesses, the gray area are the medium sized businesses in between. No one is going to say QANTAS or the ANZ bank are small businesses, nor are they going to say Joe's one man pizza business is a large business,

You may not believe this, but for some years in the 1980's I did operate an engineering/drafting small business, with an office and a couple of employees, it went okay. I must say I would much prefer to operate a service type business than a commodity based one, like you do.

Yes Paul, i'm not sure how I would handle a business like engineering as this requires highly skilled labour and lets face it, they are now few and far between.

Even in my industry quality butchers are very hard to find, and I blame this on the self assessment style of delivering training. Rather than look for butchers, I decided to make my own out of young guys with great attitudes, it has been a move that has paid off ten fold.

Our industry has always suffered from poor wages, as retail is one of the few sectors people can bargain with so many of our people went to service jobs, as they were highly sought after with their customer relations skills. Lets face it, a good butcher can sell ice to Eskimos. Those who were not so good with people became operators and the like, many pulling five figure incomes, nd who can blame them.

Butch, I remember our butcher as a kid, Gordon, not sure if he was Mr Gordon, or just Gordon, everyone knew him, and he knew every customer by name. Saw dust on the floor, nothing cut, all done as he went, had all the time in the world, even with a shop full of customers. Always free pigs trotters and soup bones, best tripe in the world, the honeycomb variety. I still love tripe, Got his meat from the Old Blayney abattoir in the central west, the best meat in NSW, so they used to say, its no more. Ate a lot of chocko's and tapioca, as a kid, not together, still like chocko's not so keen on tapioca though. I stayed with my son and daughter-in-law, she said "Dad what do you want for dinner tonight? "Lambs fry would be nice," "What's that?" "Sheep's liver" "The kids wont eat that stuff, nor will I, your son might, I think, and you, its disgusting! the kids and I will have Macca's." so we did, I had to buy it from the butchers, she wouldn't dare ask for it, only $3, got some bacon to go with it, throw in an onion, bloody beautiful, with mashed potatoes, peas and pumpkin, even if I did cook it myself.

I'm hearing you Paul.

In my shop, which I operate with my son, or rather he now operates with me, is a little country shop which we have taken from about $300K turnover to just shy of a million in a year. We did that with great meat, not cheap, great range and great service.

I love my brains and fry as well yet have the same reaction from my family. Oh well.