There are more than 2 million SMEs in Australia, employing close to 5 million people and making a massive contribution to the economy and our society.
Small business has long been referred to as the ‘engine room’ or ‘backbone’ of the economy, but many small businesses are not making the most of the opportunities available to grow and become substantial employers and generators of revenue for themselves and their communities.
While a lot of small businesses are basically micro-businesses run by sole traders, which is all well and good if that’s what you want, there are a substantial number that get to a certain level and then either stagnate or decline. We need to see more of these small businesses stepping up and becoming medium-sized businesses.
How do they do that? What’s the secret to small business growth? It goes without saying that SMEs are a diverse bunch and it’s always hard to dole out generalised advice to such a cohort. However, three things stand out as applicable to a diverse range of small businesses in terms of engineering growth: good planning, overseas markets, and digital transformation.
Plan for growth
It’s surprising how few small businesses actually plan for growth, and are then surprised when it happens and they are not properly prepared! Many small businesses start out on a whim or as a hazy adventure, funded by a windfall of money or built up from sideline hobby to thriving micro-business.
It’s often at this stage that small business owners don’t do the initial solid planning required to go beyond the scrappy startup phase.
Many small businesses are either too timid about their own potential or don’t seriously think through what they want. Don’t be afraid to state your ambitions and have a business plan that helps you fulfil that goal. Back yourself!
This was brought home to me on my recent trip to North America. I was scouting out opportunities for my business and was amazed at how vibrant the economy is over there, and how receptive investors and potential partners are to great business ideas.
So many Australian businesses seem content to plough the same furrow over and over again. It’s a big world out there with plenty of opportunities. Your business might service a niche market in Australia, but have you considered how big your business could be by servicing that niche market in the US, Canada, or the UK? That’s before we even factor in the rest of the world like China, India, Europe or elsewhere.
I had the chance to talk to Austrade officials while I was in New York and they were effusive about the opportunities opening up for Australian businesses in the US. The story of globalised trade and markets is ongoing and far from played out. Whether it’s expanding into the markets of developed or developing economies, Australian businesses have so much to offer on the international stage.
Don’t be afraid to think beyond our domestic markets. Develop an international mindset and open your business up to some incredible opportunities.
This is an obvious hobby horse of mine because I’m very much in the business of digital transformation. However, it’s something that is a continual process, and is relevant to 99% of businesses.
From optimising your office admin processes through to your client relationship management systems, digital technology touches almost every aspect of business. You should be constantly looking for better ways to do things: automating tasks where possible, creating better channels of communication with customers and looking at ways to use technology to enter new markets.
The one big advantage small businesses have over big businesses is that they tend to adopt and adapt tech a lot quicker. Digital also allows small businesses to scale at a much faster rate.
It really does all come down to planning for growth. Your digital transformation and market expansion strategies should be incorporated into your overall planning. You’ll never know exactly what the external conditions will be like for your business, but if you put in place a thorough plan that allows for the very real possibility of growth, you’ll at the very least have a usable roadmap to small business success. Get all three of these elements aligned and watch your business boom!