Small Business Secrets: how Rafael's Latin cafe rode wave of consumer confidence to success

There are signs the non-mining recovery is broadening to include smaller businesses.

La Latina

Rafael Valery from La Latina. Source: SBS

Rafael Valery started his Latin food cafe three years ago after testing the market at food stalls around Sydney.

"We started doing markets around the city, we were doing Leichhardt, we were doing Frenchs Forrest, and here in Chatswood.  We ended up opening this shop ... and brought all the customers from the markets here," he said.

He added that his business has been growing ever since he opened the shop.

"It has been very good," Mr Valery said.

"It has been improving every year, this year has been very very nice. I feel more confident, more people have come in, more Colombian, more Venezuelan, even though we try and target Australian people."

It's a sentiment that has been echoed in NAB's June quarter small and medium enterprise survey which found both conditions and confidence have risen in the sector.

Conditions are at their highest level since 2010 and confidence is at a near two year high.
SME Confidence
Source: NAB
NAB's Chief Economist Alan Oster said both confidence and conditions are above the long run average.

"What I really think is important is that at the micro-end of the SME survey. We actually had positive business conditions for the first time for two years, so it's no longer the case the smaller you are, the worse you are."

Mr Oster says small health, property and finance businesses are most confident but retailers are finding it tough.

"They've improved a lot at the SME space in terms of their sales and profits, but they're not quite yet willing to improve their employment intentions," he said.

That is an indication small business owners are working harder and longer - and with fewer staff.

Those weak employment expectations may play on the Reserve Bank board's mind next week, but Alan Oster said while lower rates improves cash flow businesses many not benefit from another cut.

"Rates are already low, if you relying on another 25-basis point cut to make something viable, I think you ought to look closely at your business."

NAB's survey was conducted before the federal election but Mr Valery doesn't feel the outcome will change sentiment.

"I don't think it'll change anything for our business even though we have to pay a little less taxes, that's what I understand a little bit," he said.

For now, Mr Valery has his sights set on a bigger plan.

"To be in a different part of the city, maybe a franchise later on."

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Small Business Secrets: how Rafael's Latin cafe rode wave of consumer confidence to success | SBS News