NAB senior leaders discuss the economy and why there’s good news ahead for business.
At Xerocon Melbourne 2015, David Koch hosted a session on the state of small business in Australia. It looked at the challenges faced by start-ups, the growing pains of small business and the changing role of technology in helping people build their businesses.
The key to a successful small business is to think big, with a new breed of online tools allowing small Australian businesses to punch above their weight.
Australia is a nation of entrepreneurs, with only the United States boasting more small business owners per capita. Australian small business owners find success by thinking outside the square – they are not stuck in their ways, and they’re not afraid to try something different, says David Koch.
The financial commentator and television host was speaking at a panel discussion he hosted at Xerocon Melbourne 2015 on August 13. Entitled “Going for growth”, it was on the state of small business in Australia, including the challenges faced by start-ups, the growing pains of small business and the changing role of technology in helping people build their small business dreams. The panellists were Jo Burston, Founder and CEO of Job Capital and entrepreneurial movement InspiringRare Birds; Adam Schwab, Founder and Managing Director, AussieCommerce; and Helen Souness, Australia & Asia Managing Director, Etsy.
“Successful business owners are optimistic, they take responsibility for their actions, and they continually re-engineer their business and look for really efficient ways to run it,” Koch says.
“New technologies have democratised good processes and efficiencies. Small businesses can now make the most of powerful business tools that were previously only within the realm of large departments within big businesses.”
The “think big” mantra is more than just a platitude; it’s a sensible strategy when you’re competing against other small businesses also empowered by new technology and perhaps looking to disrupt your industry. The annals of history are strewn with tales of successful businesses resting on their laurels and falling victim to nimble competitors embracing new ideas.
“Thinking small is a risk,” says Jo Burston, Founder and CEO of Job Capital and entrepreneurial movement InspiringRare Birds, a global initiative designed to empower women entrepreneurs.
“Even though you may be small in capability, the vision that you have should be enormous. I always say that if you think big you should think bigger. If you think bigger, then think bigger again. You’re only capable of the vision you set yourself to achieve.”
The rise of e-commerce allows small businesses to easily expand their reach to compete against well-funded bricks and mortar rivals. While the internet can level the playing field, it also allows traditional retailers to reinvigorate themselves online, making competition tough, says Adam Schwab, Founder and Managing Director of e-commerce specialist AussieCommerce.
“The internet has broken down a lot of barriers,” Schwab says. “It’s certainly easier now for small businesses to become bigger businesses because a main barrier was the capital required to grow. Thanks to the web you don’t necessarily need to build 400 department stores to reach customers.”
“Of course there are a lot of other people trying to do the same thing, so it increases competition. It is very much a survival of the fittest, the best and most efficient businesses should win – with the internet thankfully putting powerful business tools and processes within reach of small businesses.”
Whereas start up businesses were once forced to invest thousands of dollars in IT systems that they would eventually outgrow, the cloud puts enterprise-grade software and hardware at your fingertips for only a few dollars per month. While making it easier to get on your feet, the cloud also makes it easier to scale your IT systems and manage costs as your business grows.
From a small business perspective, cloud computing is best viewed as a form of outsourcing – handing over IT systems to the experts so you can concentrate on what you do best. It’s also known as “utility computing”, in that your IT systems are on demand – just like flicking a power switch or turning on a water tap. Just as starting your own small business doesn’t require you to build your own power station, it shouldn’t require you to build your own technology infrastructure.
The barriers to entry for small businesses drop significantly when server rooms live in managed data centres, putting processing power on tap. Meanwhile, you can sign up for pay-by-the-month Software as a Service such as accounting packages, payroll, project management, human resources, customer relationship management, scheduling, point of sale and inventory management. Cloud services tend to be modular, letting you build your own best of breed solution to suit the business.
Even desktop software such as Microsoft Office, Adobe Photoshop, Adobe Premiere and AutoCAD tools are now available on subscription – letting small businesses turn significant upfront capital expenses into manageable monthly operational expenses.
One benefit of cloud computing is that it allows small business owners to stay productive and keep in touch with the business when they’re out of the office. Rather than staying chained to their desk, they can work on the go using their notebook, smartphone or tablet – with all their valuable business data at their fingertips.
The internet also offers a plethora of tools to understand your customers better, from real-time Google Analytics so you can watch visitors interact with your website to regular SurveyMonkey questionnaires to gather customer feedback
While such information can certainly empower small businesses, there’s also a risk of losing focus on what’s most important, warns Helen Souness, Australia & Asia Managing Director of global online craft marketplace Etsy.
“There’s also a risk of distraction for some small businesses – with all that data and all those amazing tools you still need to remember what drives your business,” Souness says.
“If you’re diving into why your conversion rate is dropping maybe you should be working on next season’s product range and selling to your customers. There is a risk of getting distracted from what drives your business, which is usually your customers and sales.”
A common challenge for small business owners is focusing on what makes the business tick, which requires more than just analytics tools. As small businesses look to expand their horizons, it creates opportunities for accountants and bookkeepers to not simply crunch numbers but to become trusted advisers who can offer insight into the business.
“A great bookkeeper is gold,” Koch says, “but their problem is that their clients can see them as a cost rather than an investment. That’s your challenge as an accountant or bookkeeper – to prove your worth and educate your clients as to how they can get the best value out of you.”
“I agree, accountants have to move up the food chain,” says Souness. “It’s no longer a once-a-year relationship. As the closest adviser to most small businesses, the accountant has access to information and tools with enormous potential to recognise changes in the business, start to understand the drivers of the revenue and really add value to the business.
“Someone who is giving you amazing insight into the business is not someone whose value you question; that’s someone who is your partner in your business and a key part of your growth.”
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