I have come across several small-business owners that have been revisiting their business plans and strategies for the rest of this current financial year. I consult with a diverse group of small-business owners with a wealth of practical knowledge and small business experience.
I posed a question to them: “what are your tips, for a small business’s survival?” I distilled their responses to the following four key points:
Make a plan
I have found over the years that many small businesses ignore this, not because they are inept, it’s often because they’re just too busy, and it just falls into the too hard basket. Good businesses have plans, and mediocre companies don’t.
The discipline of writing your plan down is time well spent. It will give you focus and direction; everyone agreed. Even a simple SWOT analysis is a good discipline. It’s not just about outlining strengths and weaknesses of the business; it also lists the opportunities, the threats that you might confront, and how you plan to cope, manage or take advantage of them.
Watch your pennies
The old saying that “cash is king” is right. Business owners that have created a plan are typically better at setting a budget and sticking to it. Set a realistic budget based on realistic assumptions.
The biggest bugbear for small businesses is cashflow. All the best-made plans are worth the paper they are printed on if you aren’t keeping your receivables in check. It’s about what’s in your bank account; hence “Cash is King”.
Look for a good advisor
Look for the right advisors and listen to them. It will cost, however, don’t shirk on getting professional advice. Make sure you deal with specialists in their relevant fields.
When considering advisors, there are some fundamentals; research the company, interview at least three candidates; check references from their current client list; you have to feel that you can trust them. They will become partners in your success, and you will need to speak openly and honestly with them. Trust is key.
Don’t overcapitalise tech and software solutions
Most small businesses have a love/hate relationship with today’s technologies. Many industries are becoming more reliant on various software solutions; apps, websites, payment gateways and it feels like the more software, the better. I can feel the unanimous groan from everyone reading this as it seems it’s getting harder and harder to decipher technology and software solutions.
In short, don’t overcapitalise on technology and software; this is a trap, and a lot of businesses often encounter. You can “over gear” and end up paying too much: “I only need a Commodore, not a Ferrari”. It will take an effort to work out the right tech and software mix for your business.
In line with this thinking, recently the Australian Tax Office introduced their mandatory Single Touch Payroll (STP) reporting for all employers. It came into effect back in July this year; all employers must report employees’ pay and superannuation details to the ATO through its new single-touch system. It needs to be implemented by all businesses.
STP may create a tech headache for some small businesses. Having said that there are several solutions in the market, and the question then is, “how do I decide on which payroll software applications to work consider”.
Think about the following pointers; try not to overcapitalise; address what are you trying to fix; there are fit-for-purpose solutions out there; find the one that fits your budget.
Paul Sharpe, Chief Operations Officer, Easy Payslip
