As we leave 2009 and the worst of the economic crisis behind, 2010 is a time for Australian small businesses to capitalise on the opportunities presented by a strengthening economy.
The New Year is a great time to take stock and prepare your business to gear up for a new operating environment.
Westpac’s General Manager of SME Segment, Sian Lewis, provides the following New Year’s resolutions to kick-start your business for the year ahead:
1. Plan for success
Daily pressures of running a small business mean business owners rarely get time to take a step back and look at the bigger picture and plan for the future. Your business plan should be as fluid as the environment you operate in to retain your business’s competitive edge. Look over your business objectives and ask yourself: ‘Am I on track to achieve my goals? Are my objectives taking my business in the right direction in today’s market?’
2. Assemble your people power
If you are gearing your business up for growth, consider your current staffing levels and their ability to assist this growth. Do you have the right balance of senior staff and supporting staff to facilitate your business growth strategy?
3. Check in with staff morale
A team that’s pulling in the same direction will put your business on the path to success. The global financial crisis created a lot of uncertainty, so it’s important to check in with your team to make sure there is a high level of staff morale and commitment — sometimes the simplest measures can go a long way to boosting spirits and creating a team that’s working toward one goal.
4. Fill up the business pipeline
January can be a notoriously quiet period for many businesses. Use this time to identify potential clients to attract or retain for the year and develop strategies to approach them. If you can hit the ground running with a solid business pipeline in January, you can use the rest of the year to convert those leads into revenue.
5. Concentrate on cashflow
Kick-start your business in 2010 by accelerating its cashflow cycle. Cashflow is the backbone of every business and is an essential component to monitor. From a day-to-day perspective, offer your customers incentives to pay early or use electronic transfers so that you have quick access to cash inflows, then stagger your approach to spending so that you can manage your cash outflows.
If you have the knack for cashflow and find yourself with a surplus, make any extra cash work harder for your business. For a short-term option allowing you quick access to your cash, consider a high-interest saver account.
If you don’t need quick access to your surplus, consider investing it for the long term, potentially adding strength and security to your business.
6. Spend smarter
The start of the year is a great time to assess your spending. Glance down your profit and loss statement and consider cutting back on any unnecessary expenses. For the expenses you can’t avoid, shop around with your suppliers to ensure you’re getting the best deal without compromising on quality. Find out if your business is eligible for bulk-buying discounts or loyalty discounts for using multiple services from the same provider.
7. Explore expansion opportunities
Identify the gaps in the market and consider potential opportunities for your business to fill them. What does your market need that would extend your business offering and generate new revenue streams? As an exporter, are there new countries you could branch out to? As a café owner, could you implement internet facilities?
8. Secure the right type of financing
If you’re looking to grow your business in 2010 you will need to explore the various financing options available. In today’s environment it is essential for your business to secure the ideal finance mix. Ask yourself, what are you seeking finance for and what is the best option available to your business? Are you taking advantage of the convenience and flexibility a business overdraft can provide or do you need to consider asset-based finance to fund a new piece of equipment?
Careful consideration must be made on your business’s debt-to-equity ratio to ensure your business maintains a healthy cashflow.
9. Seek professional advice
As with any important decisions, the best advice will come from professionals. When it comes to your business, you want the right advice from someone who knows your business well. Make an effort to develop a good relationship with your accountant and local business banker to ensure you receive tailored advice to help you grow your business.
10. Celebrate your business success
It’s easy to get caught up in the everyday stress that comes with running your own business. Don’t forget to step back and assess your milestones — recognising and celebrating success is an important part to running your business that is often overlooked.
Sian Lewis is the General Manager of Westpac’s SME Segment.