Small business owners are constantly bombarded with decisions. Often, they are faced with small and large, ambiguous and difficult questions about where to take the business next. Entrepreneurs struggle with analysis paralysis and short-term vs. long-term strategic moves.
In Australia where 99 per cent of the businesses are small businesses, helping small or local businesses with decision-making and scale-up efforts is a crucial economic task for both national and state government bodies. The government offers many resources and support tools for small businesses so be sure to check out business.gov.au.
Whether you are starting a new business or trying to achieve tangible business growth, here are some simple decisions we recommend to help you establish a sustainable business model.
Many new businesses mistakenly believe that accounting can be managed manually since their operations are small. But such an indefensible process often leads to revenue leaks and cash flow errors as well as business leaders having an inaccurate picture of the business needs and performance. You also do not want to always be scrambling last minute to put together financial reports last minute for the government and investors.
Invest in digital accounting tools that will help you minimise fraud and errors. Keep in mind that it’s not just about the actual accounting tasks – you should consider processes within the overall operation that should be automated to ensure accurate and transparent cost tracking. For instance, you might want to speak with your fleet card vendor to see if there are ways to streamline the report or install certain cost tracking features to prevent false reimbursements.
One of the most common and expensive pitfalls for small businesses is making too much compromise to expand their customer base. The sales team, in a desperate attempt to increase their commission, might push to provide too much discount or promise terms unfavourable to the business goals.
This is difficult. You have to attract and sign new customers to ultimately become a successful business and might consider these early-stage concessions a necessary evil. However, such a compromise could hurt both your short-term and long-term business strategy.
These exceptions and allowances should be pre-defined and not handled ad-hoc. Examine your customer data and decide the range of appropriate prices for your products and services based on their value-add. Consider your ‘asks’ if a discount were to be offered to new customers – for instance, you could offer a 10% more discount on the contract if the client provides 5 concrete referrals (initiating an effective word of mouth marketing strategy). Consider these terms early and ensure that your people stick to them.
Maintain your confidence and faith in your competitive advantage and stand your ground if the customer is being unreasonable.
In this day of social media, the only way to differentiate yourself from your competitors is to have more touch points with your target clients. We’re not talking about some boring old quarterly newsletters here. Since your business probably has a limited budget, you want to be strategic and intentional about the marketing channels and content to which you allocate your resources.
Word of mouth is the best and most effective (nevermind least costly) marketing channel by far. But it rarely happens organically on its own. Here are some questions you should consider when deciding on targeted marketing efforts:
Once you have a documented plan in place, invest in some simple marketing campaigns to test. You can have a few different options and conduct an A/B test in the marketplace at small costs so you know with confidence which campaign to scale across a wider base.
Often business leaders have the tendency to want more and grow their network in size. But partnership management is time-consuming and causes complications and delays that could be detrimental to a new growing business.
If you have too many investors early on, it will be a lot more difficult for you to achieve growth strategy and prove your value since you will be working towards diverse or conflicting benchmarks. If you commit to having too many partners, you will burn through your resources’ time and capacity with little in return.
It is tempting to say yes to more partners in hopes they’ll bring more clients and thus revenue but that is rarely the case. Start small and work with a few partners so you have the capacity to run deeper and more comprehensive partnership programs and initiatives.
Be comfortable with saying ‘no’ and keeping your network circle intentionally tight until your business is ready to take on more.