REVEALED: The Sunshine Coast industry most likely to fail
THE riskiest industry to be in on the Sunshine Coast has been revealed, and it comes as no surprise to one local entrepreneur.
A report from SV Partners indicates 5.6% of food services and accommodation businesses on the Sunshine Coast are at high risk of financial collapse in the next year.
Hospitality businesses are more than twice as likely to go bust than firms in any other industry on the Coast.
Restaurateur Tony Kelly said the industry had "always been scattered with graveyards" but it did not have to be that way if businesses could adapt quickly to market conditions.
"One thing my father always told me was you've got to know when to hold on and know when to let go," he said.
"Know when to get out or change, be reactive. Give yourself time and space to listen to what the market is saying."
Do you think the hospitality industry is a difficult one?
This poll ended on 03 April 2017.
Yes, I'm always seeing cafes and restaurants close up.
It's hard, but I think other industries are worse.
It's not difficult if you know what you're doing.
This is not a scientific poll. The results reflect only the opinions of those who chose to participate.
Despite his own success, Mr Kelly admitted hospitality could be a "brutal industry".
Small margins, he said, meant simple problems like the lack of a strong leader in the kitchen or front-of-house could turn profit into loss overnight.
And while food services and accommodation businesses were the most precarious on the Sunshine Coast, they were less likely to fold than those in Brisbane, where nearly one-in-10 (9.5%) were at risk of failure.
SV Partners director Jason Cronan put the high-level of risk down to a lack of consumer confidence, and said a reliance on tourism put pressure on Sunshine Coast businesses.
"These businesses are going to need to keep costs down and closely monitor and manage cash flow," he said.
"Retail and hospitality are important industries for the Sunshine Coast. They employ a lot of local residents.
"Failure of these businesses would have significant consequences for employees, their families and the community more broadly."
Mr Cronan said the weakness in the accommodation and food services sector was a higher risk for the Sunshine Coast than other industries because of a heavy reliance on tourism.
But it was not a problem unique to the Sunshine Coast. Across Queensland 6.6% of accommodation and food services businesses were near insolvency, and Australia-wide that number sat at 6.7%.
"The overall economic indicators for the Sunshine Coast appear quite good. The health and education sectors are relatively secure," Mr Cronan said.
"Expansions of the local hospital and university are driving business confidence."
Coast Businesses most at risk
- Construction (27, 2.4%)
- Accommodation and Food Services (24, 5.6%)
- Professional, Scientific and Technical Services (24, 2.1%)
- Retail Trade (15, 2.2%)
- Financial and Insurances Services (13, 1.6%)