Small businesses are the lifeblood of Australia, contributing $418 billion to Australia’s GDP in 2018-2019 – equivalent to 31 per cent of Australia’s total economy. As we head towards the end of the financial year (EOFY), this is the perfect time for small businesses to take stock of their systems, processes and plan for the new year.
While small businesses rapidly adopted digital solutions during the height of the pandemic, business owners understandably didn’t have the time and resources to think about which services and platforms would best suit their needs. However, now that economic conditions have improved, small businesses can switch their focus to a critical evaluation of their problems and the tools that can provide practical, innovative support.
Innovation and technology
An innovative digital-first approach to business is founded on experimentation and initiative. SMEs that pull ahead and make the most out of their investment in technology are trialling new technologies and adapting their approach. Right now, it’s likely that many businesses have brought in new technologies to cope with the pandemic but haven’t yet had the time to understand how they can leverage all the services they are paying for. If you have a new subscription or service, take the time to do the training, talk to your support team and understand how this can truly benefit your business. If the service can’t do what you need it to, now is the best time to find a better solution.
“If it’s not broken, don’t fix it” doesn’t work anymore; innovation goes hand in hand with experimentation. Cloud technologies are a great example of how you can take a flexible approach to processes and enable problem-solving in real-time.
Tackling finances head-on
Australian small businesses are ambitious and hungry, growing into new markets and chasing opportunities across the world. Ensuring that payments arrive in full is critical to both the success and survival of a business.
There are innovative digital solutions available that can tackle a host of common challenges in international transactions. Businesses should be on the lookout for platforms that can provide near real-time payments, the capability to hold cash balances in multiple currencies to reduce conversion fees and an interconnected ecosystem. For example, the Western Union Business Solutions WU Edge payments platform provides fee-free FX payments in 54 different currencies with near real-time payment delivery to the destination. Leveraging the global marketplace can open up many opportunities for small businesses, but using the right tools lessons the risks.
While optimism is returning to the SME sector after the height of the pandemic, preparing for volatility will lessen the impact of snap lockdowns, border closures and market fluctuations. SMEs that can embrace agility and pivot their strategies to adapt to market challenges will thrive, not just survive.
Volatility is the new normal for SMEs, so accepting that and embracing a flexible mindset will entrench resilience. However, one area that remains a constant challenge is supply chain stability. This year, we saw a concrete example of how supply chains can suddenly halt with the blockage in the Suez Canal, expected to have repercussions in the billions of dollars. Seeking insight and assistance from finance partners to help anticipate the impact of market changes and flexibility in Foreign Exchange hedging strategy will be crucial to survival.
A new financial year is an opportunity for SMEs, allowing for a review of both business position and options for the year ahead. However, this financial year will for many prove to be more challenging due to the extreme market uncertainty. Analysing the successes, challenges, and opportunities will enable business owners to step into the new year armed with a clear picture of their present and future.