Ana Marinkovic: What 2023 will bring for small business
Throughout the year, NAB Executive Small Business Ana Marinkovic will be sharing her insights on the latest burning issues for small business. In her first message, she highlights the importance of speaking with your banker early if times are tough, staying on top of cyber threats and why it’s vital to build a continuous improvement mindset.
When I travel around the country visiting our many small business customers, it’s clear there’s quite a bit of anxiety out there at the moment. There’s a lot of talk about higher costs, rising interest rates and a shortage of supplies and labour.
Yet, despite this, I’m also hearing lots of optimism, including in regional and rural Australia. The fact is, many of our customers are continuing to experience strong growth and are taking advantage of the current market conditions to build up their cash reserves or pay off debt.
They’re also looking to expand their businesses – investing in new infrastructure, product lines and service propositions, as well as new digital capabilities, including cybersecurity.
It makes me realise how lucky we are to be in Australia, where the economy is still in reasonable shape despite everything we’ve gone through over the past few years.
The cost of doing business
Even so, I’m mindful there are many out there who continue to face some pretty tough challenges – including finding the workers they so desperately need.
I recently visited a small business farming customer in regional South Australia who was paying $80 an hour for potato pickers. It really was a matter of that, or leaving their crop to rot in the ground as the pickers went to someone who could afford to pay more.
It’s those kinds of costs that are putting huge stress on small businesses’ bottom lines – at a time when high inflation is making almost everything more expensive.
The good news is, this particular pressure may gradually decrease over the year. Students are returning and the international employment market is set to open up again in the next three to five months.
But, in the meantime, any investment decisions are necessarily constrained. For these small businesses, it’s a matter of focusing on the must-haves, rather than those items that can be delayed six to 12 months when things have settled a bit more and the balance sheet looks stronger.
The three factors for success
So, what else should small businesses be focused on in the current climate?
I see three factors that are critical to small business sustainability. The first, and most important, is to get in touch with your bank or small business banker at the first sign of any headwinds or the need for financial support. As I tell the many customers I meet, having those early conversations with your bank is absolutely critical. Not only will it allow you to share your emotional burden with someone else, but it will help us help you on your journey – sooner rather than later.
The second critical factor is to be super aware of cyber fraud. Unfortunately, it’s on the rise and this is a space where small businesses are particularly vulnerable. Educating yourself is a must here, including accessing the resources that the banks, regulators and various chambers of commerce make available. Visit our NAB Business security hub to find out more tips to protect your business.
Lastly, it’s vital that you have that continuous improvement mindset – that you keep on looking out for alternative supply chains, competitive pricing, and how you can reduce the costs to serve or acquire customers.
Being really diligent on both sides of the balance sheet is so very important.
Positioning yourself for better times
Even when times are tough, there’s a lot small businesses can do to protect themselves and ensure their long-term sustainability. It’s all about making sure you have the knowledge and resources to put yourself in the best possible position.
As we often tell ourselves in times of stress: “This too shall pass.” And it will. But, in the meantime, you want to make sure you’re doing everything you can to look after your business, and yourself.