Ten expert tips for 2013
Have a clear plan , says NSW Small Business Commissioner Yasmin King.
Small business owners face a number of challenges in 2013, with rising costs, concerns about the US's fiscal cliff and a wide range of external variables impacting on consumer and business confidence.
But successful small business owners aren't usually the type to sit on their hands. NSW Small Business Commissioner Yasmin King says there are almost always some things you can control, and plenty you can do to ensure you're operating as efficiently as possible this year.
Here are the Commissioner's top 10 tips for giving your small business an edge.
1. Get your cash flow in order
We all know that cash flow is the most important key to sustainability. Make sure you have systems in place to enable you to manage cash flow, as well as strategies to get cash through the door. Don't let your debtors blow out.If your customer is the NSW Government, they must pay you within 30 days or else pay interest on the invoice. More details: call 1300 795 534.
2. Revisit first principles
Before you invest in new technology or systems, ask yourself if you are really getting the basics right. If you start with a mess and simply add technology, you end up with an automated mess. Get down to brass tacks to ensure your processes are really working and ensure that future improvements won't be compromised by a shaky foundation.
3. Review your costs and look for efficiencies
Look through your costs in 2012 and see if there is scope to save, either by reviewing your suppliers, changing processes or embracing new technologies.
But be smart about it. I once met a retailer who had decided to save electricity costs by turning off the lights. This made his shop look closed and uninviting which of course impacted on sales. By investing in technology such as LED lighting, he could have reduced energy costs without affecting sales.
4. Get informed about trends in your industry and be aware of changing external environmental conditions
This can include technology, overseas competition or changes in your customers' behaviour. You need market intelligence and to stay abreast of changes that could impact your business. Industry associations, magazines and websites are good places to start.
Understanding risk and having a contingency plan are also important to help you adapt to a changing environment. Ask 'where is my business the strongest and what might threaten that?' and ensure that you're doing everything you can to minimise your weaknesses and make the most of opportunities. Whether you're a tradie or a marketing consultant, knowing where your industry is headed, minimising risk and being able to offer the most current service will help your business stay ahead of the pack.
5. Think digital
Retailers need to be ahead of the game when it comes to providing customers with a quality online shopping experience.
It's not just about retail, however. The internet means that recommendations are king. Ensure your customers can at least find your business online, and stay abreast of any online reviews. Think of it as word of mouth on a massive and instant scale, and make it count for your business.
If you already have an online presence, now's the time to review its success. Free services such as Google Analytics are a good place to start, but seek impartial feedback on your website's usability too.
Small Biz Connect advisors across NSW can help small businesses establish or enhance their online presence.
6. Refocus on customer service
Don't feel that because you run a small business you're not competitive; good customer service will set you apart from the pack.
Recently I co-judged Fair Trading's I Love my Local Business competition. Hundreds of customers from across NSW had nominated businesses to win based on their good customer service and positive relationships with the community.
In a competitive environment, customer service can keep customers coming back or at least mentioning their experience to their friends, and that's publicity that money just can't buy.
7. Get independent, quality advice before you sign or renew your lease
Entering into a lease is a major decision with significant financial implications, and getting advice from your real estate agent is not enough.
Test the market to ensure the price is right, carefully think through whether the property and location can meet your business needs and don't rely on future changes such as the arrival of major retailers or public transport facilities unless they are absolutely, independently guaranteed.
Stay ahead of the game by getting familiar with your end of term date, making a note of any rent or market reviews in your diary and thinking about them in advance. If you have an option on your lease, you usually have to exercise it three months prior to the end of the agreement, so be prepared.
My office's Dispute Resolution Unit incorporates Retail Tenancy Disputes, and offers quality, independent advice at no cost. Call 1300 795 534 before you sign.
8. Conduct a relationship health check
Revisit old relationships; there may be scope to pick up an old client or negotiate better terms with a previous supplier.
If you're involved in a dispute or think you may soon have one on your hands, don't let it fester. Our Dispute Resolution Unit can help to sort it out as early as possible. It's better to resolve a dispute and save a relationship than build a new one, which will cost time and money.
You might also look at opportunities for new relationships in 2013, including being involved in a business group such as your local chamber. Networking in this way can help you stay informed, reduce isolation and generate ideas to help your business in 2013.
9. Examine what you have been putting off doing in 2012
Take time to review those issues that you put on the backburner last year. Are they still important? Do you need to take action, reschedule or modify your approach to serve your business in 2013?
10. Have a plan for 2013
Businesses don't plan to fail, they fail to plan, and in a competitive environment you need to think strategically.
Start by looking at where you are now: your business, its organisation and overall performance, then consider your market. Establish some directions, and conduct a SWOT analysis to help you identify your strengths, weaknesses, opportunities and threats.
Set yourself some objectives for the year ahead. You might want to increase customer numbers, manage growth or simply be more on top of business operations. If you're thinking of exiting the business in the next three years, you need to start planning now.
Ask yourself what you need to do to close the gap between where you are now and where you want to be by December. This might include improving your financial management, picking up new skills, hiring new staff or developing a marketing plan. Write down these goals and required actions and check in with them regularly.
If your plan doesn't work out, don't beat yourself up. Look at what went wrong, whether the goals are still relevant and what you can do differently. Finally, acknowledge that running a successful business takes flexibility, tenacity and perseverance, and with the right attitude, everything can become a learning experience to build upon.
* For more advice, Small Biz Connect advisors across NSW can help you devise or update a business plan at little or no cost. Details: www.smallbusiness.nsw.gov.au.