Did you know, approximately one in two small Australian businesses are confident they will experience growth over the next 12-months? According to research conducted by the Commonwealth Bank of Australia, the willingness to accept new technology is a key indicator of how confident a small business owner feels. The survey found that businesses that integrated technological advancements into their everyday operations early on are more likely to experience higher levels of Small Business Success and revenue growth in the New Year, and in the months to follow.
Sensis Business Index also conducted a survey into Small Business Success and confidence, where they found that small to medium businesses operating in a metropolitan area are more positive about their financial position, and the strength of the economy. Also, these type of business owners also expressed generally positive feelings towards how they think the economy will be sitting in 12-months time. Some of the key indicators measured by the Sensis Business Index were geographical location and the level of confidence felt by owners towards their local government and their own businesses.
Furthermore, out of the six in 10 industries that felt the most positive, the health and community services sector were the most optimistic. Although small to medium businesses operating within the hospitality, retail and manufacturing industries said they felt conditions were more difficult for them.
Next element of success, managing a steady cash flow. In fact, it’s usually one of the biggest areas of concern for small to medium-sized businesses. You see, money is often tight and expenses are high. However, despite 42% of business owners opting to not take home a pay cheque in the past year because money has been tight, this is down from 51% in the previous year. Although, despite a high number of SME’s applying for finance within their first five years of operation, the attitude towards business growth still remains high. This is, in part, due to business success stories.
For instance, Sydney specialist events agency, Sense, experienced Small Business Success and rapid growth when they managed to land a couple of globally recognised clients, including Google’s very own YouTube. After ten years of working with mid-tier clients, they finally managed to scale up their business with the larger-scale clients they were after. The success of landing an account from Google made moving to a larger premises and hiring new staff possible. From there, they were able to take advantage of even more unprecedented growth. The expenses associated with their business growth were even funded organically from the increase in profits they started enjoying when they began working with Google.
For other businesses to achieve this level of Small Business Success, steps need to be taken to manage funds. Next questions is, how can this be achieved? Very simply, increasing staff productivity, hiring better-qualified staff and mitigating risks by not putting all of your eggs in one basket. But also, going after the clients that will help increase your cash flow. As your business grows, some extra precautions will need to be made to ensure it doesn’t peak and then drop off again. This is why it’s important to not try and get too big too quickly.
A word of warning. If you expand too much in a short period of time, you could end up facing financial, legal or even staffing issues that can negatively impact your business. Mitigating risks through the proper insurance coverage is one area, in particular, that’s often overlooked. As your business changes and grows, you will need to revise your existing policies. By doing this, you will ensure you’re properly covered for any risks and exposures your business has, based on your growing business model and needs.
For a thorough review of your existing business insurance, or for assistance with finding the coverage that’s right for you, contact the team at F.D Beck Insurance Brokers today!
© 2021 FD Beck & Sons Pty. Ltd – AFS License: 233784. ABN 68 004 455 038.