The economy is in a state of uncertainty because the stock and property markets are suffering significant volatility. The impact of corona virus on tourism and tertiary education sectors in particular, is making for a challenging start to 2020. All SME businesses will have to balance these external factors and still deal with the usual challenges of remaining relevant and sustainable in a competitive market. So to plan the best path forward in 2020 we have identified key areas to bring focus and clarity to your thinking.
Managing your cash flow remains the number one priority for all SME businesses because “cash is still king”. Your business must maintain realistic working capital balances and manage the normal trade cycle with customers. Without understanding your cash requirements and particularly when your bank is involved, means failing to meet your cash commitments can easily result in a good business getting into trouble.
We strongly recommend getting financial advice and take the time to analyse the business risks of failing to meet cash flow commitments before undertaking any new project.
Customers are the heart of all SME businesses so giving a poor customer experience can be critical to your future. Without great customer experiences and relationships your business is going to struggle. The challenge is to work on your retention strategy and retain your customers for the long term.
The key to retaining existing customers and win new customers will rely on offering great products or services with a great customer service experience. So what strategies will you undertake to achieve these objectives?
Many SME businesses are not effectively managing all the key processes in running their business. With the advances in cloud based software solutions in recent years, the challenge is to simplify the processes involved in running your business.
If you fail to manage your business systems inevitably will lead to a loss of profitability and worse, business failure. Often business owners are stretched across all business functions and want to “save” money. Usually this is a big mistake.
Effective staff productivity starts with your organisation culture. How do you get the most out of the resources available in your business? There are many productivity tools that can be deployed but in the end your workforce should have a culture built around great processes and customer service.
These fundamental challenges also represent a great opportunity. How do you use digital technology to remove manual, time-consuming tasks and let your staff focus on creating improved customer value?
We are inundated with media choices and digital marketing offers every day. It is confusing because there has been significant growth in digital media options in recent years. According to LinkedIn, digital marketing skills have been in demand in 2019 and this trend will continue in 2020.
The challenge is to tell your story in a way that enables your business to grow and build customer engagement. The key here is to use a professional digital marketing service provider to compliment your story telling campaigns. It is no longer good enough relying on a random content approach on Facebook or LinkedIn to attract new clients.
For the average business owner there are simply not enough hours in a day. All owners are stretched for time. Creating more time means saying NO occasionally.
This is where a smart business owner will engage with a business mentor to focus on what is critical to success and what are distractions. My advice is to maintain a sustainable work life balance, to stay alert and not burn out.
Start with a formal annual budget and set measurable Key Performance Indicators (KPIs). Understand the profitability of each client and the resources required to provide a great customer experience as well achieve a sustainable profit margin. There is no point in having clients if you are going to lose money.
Business owners create wealth and grow their business because they understand how to build a culture around sustainable profitability. Many good businesses fail due to a poor understanding of client profitability.
Everyone talks about partner collaboration. The secret to any successful business networking begins with a win-win attitude. Your customers and supply chain partners will do business with people they know, like and trust.
For many SME businesses there is never enough time to network and collaborate to find more business. The challenge is to make time so you can connect with new prospects in a friendly networking environment and build your new business pipeline.
Red tape and regulation is the reality for all small business owners. Failure to comply with award wage conditions has been in the news recently because non-compliance when paying staff has meant business owners end up with a damaged reputation. Unfortunately governments deal with every new crisis with more legislation and without understanding the impact this can have on the average small business.
Recently the Business Council chief executive Jennifer Westacott said “Employers are fully behind the Prime Minister’s efforts to reduce the barriers and bottlenecks that are holding back Australian workers”. It is to be hoped that business owners will benefit from these latest red tape reduction initiatives.
Innovation and R&D
Innovation is at the core of every successful business but in reality is seldom the highest priority for SME businesses. With new competitors entering the market and disrupting the status quo in every sector of the economy, unless you are working on innovation in your processes, products and services you are running a big risk of losing your market to more nimble and innovative competitors.
The government is seeking to help innovative businesses with Research & Development incentives and assistance to you grow your business. Understanding how to apply and gain access to these tax deductions is essential. Getting good advice is critical for the time poor business owner when turning innovative ideas into reality.