The Australian economy has performed well in recent years, and the small players, the small and medium enterprises (SMEs), have contributed greatly. They continue to do so.
Small Organisations with Big Numbers
SMEs are looking to strengthen their position as major contributors to Australia’s economy. Close to 100 (99.7%) of the actively-trading business in Australia are SMEs and these business organisations employ about 70% of the Australian workforce, That’s more than 7 million workers employed by about 2,045,000 SMEs.
Data from the Department of the Treasury shows that small business rel=”nofollow”contributed about 33% of private industry value added (gross income). Australia is also the second easiest place to start a business, coming in second only to our neighbour, New Zealand.
In spite of these impressive numbers and strong performances, SMEs still face a number of hurdles on their way to success. Here at Capify, we have firsthand insights on the struggles that SMEs experience regularly.
Doing business means venturing into a competitive landscape. Here, we discuss some of the biggest challenges for SMEs in 2016 and hopefully, you can use these information to prepare and adapt.
Cash Flow Issues
Money problems in their various forms still top the list of company woes. For small businesses, stalled client payments, unforeseen outgoings, and outstanding bills piling up that need to be settled immediately result in cash flow problems..
There are a number of tried-and-tested money management tools that can make cashflow management easier. There are also apps that can help you with budgeting, tax accounting, bills payments, financial tracking, and even credit score assistance.
Here at capify, we offer clients better money management. We understand that money is tight especially for small businesses, which is why we offer business loans and merchant cash advance in case your organisation needs a financial boost.
The Reserve Bank of Australia is keeping the official cash rate (which is the market interest rate) at a record low 2%, which means borrowing is still a great option to get funding to put your finances in order.
Getting and Retaining Profitable Clients
As business owners, you need customers with a problem only you can solve. It’s up to you to find out what that unique selling point is and communicate it effectively to your would-be customers.
Start by doing research on your customer base, and identifying the characteristics of your best, existing clients (those with the highest sales volume and repeat business). Be sure to take into account any expenses associated with particular clients, so you get a clear view of their net value to your organisation.
After this, focus your efforts on attracting new clients from your most profitable segment. Personalise your offer to ensure it appeals to your client’s needs.
Getting the Right People
As your business flourishes, you’ll need to grow your team. Handling growth and hiring the necessary staff to manage the increased workload will be quite a challenge. While this may seem simple, it is not.
Over the past few years, the job market has been setting their sites for candidates; that is, companies are going out looking for possible recruits rather than applicants going to them. And there’s little evidence to suggest this trend would change. Business can still post a job opening but don’t expect a flood of high-quality applicants.
Companies will need to put as much into effort in headhunting as candidates do in job hunting.
One thing you can do to bolster your chances of hiring great talents is to boost your “employment brand”. This highlights the existing culture and team dynamics in your organisation, no matter how few employees are there. Show people what they can expect if they come to work for your company.
SMEs often have their work cut out for them when it comes to building brand presence. When you don’t know which part of your business to focus on (product or service), marketing can be a maze for your small organisation.
Step up your marketing game by engaging clients online. Tell them about your company and what your brand represents. Use social media as a bridge between clients and your website.
Whether you’re using emails, newsletters or some other marketing tool, be sure to pay attention to their performance and adjust your strategies accordingly. If you’re still not seeing much awareness, engagements, or leads after a few month, tweak your marketing strategy.
There’s always a marketing resource and strategy out there that you can learn from and adapt.
SMEs can be so busy that they forget to keep up with their industry’s latest news and happenings. It takes a lot of effort to stay on top of the work in your organisation that blue-sky thinking may seem an unnecessary distraction. Nevertheless, you need to stay updated.
When scheduling tasks for a week (or depending on your target timeline), allocate time for market research, which should include checking up on your competitors. Set up Google Alerts and make the most of the free, targeted online resources to stay on top of everything that’s happening in your industry.
It would also help to join sector conferences and exhibitions to hear from industry experts and grow your network.
Jumping Over the Hurdles
With forethought and tenacity, there’s really no challenge that cannot be overcome. Make it a point to learn new things every day that will improve your business, and learn from the others who have treaded the same path in business. The people that you employ and the connections built can help you deal with and solve business challenges.
Finally, don’t be afraid to get out there, take risks, and make the most of your position as a small, nimble enterprise.
When it comes to funding your enterprise, Capify is here to lend a hand. Get in touch with us today and fund your business the easy way.