Seven ways to help your small business flourish this year
For small to medium enterprise owners who struggled to grow their businesses in 2020, there is some light at the end of the tunnel.
In October, research from Australia Post showed that while revenues fell up to 67% for some industries at the height of the pandemic, the shift to additional online activity saw non-store revenue for the average small business increase by between $105,000 and $708,000. This news followed hot on the heels of the federal government's decision to extend the $150,000 instant asset write-off until June 2022, which was mostly well-received by the SME community.
Notwithstanding these green shoots of positivity, 2020 has been a challenging year for many SMEs, which took significant revenue hits as the economy went into meltdown. However, as many have discovered, if you knuckle down, clear your mind and be open to new opportunities, it's still possible to grow.
Here are some strategies that will help take your business to the next level in 2021:
1. Revise the business plan
To give your growth ambitions a chance, be sure to have a plan. Although a plan may sound overwhelming, it doesn't need to be the length of War & Peace - a few pages will do the job nicely. A business plan is a roadmap that outlines your goals for your SME and how you intend to action them.
As part of the process, identify your target markets and include them in your plan. If you can understand everything about your target market and what their needs are, it will make it a lot easier to grow your business fast.
If you need some help with starting the planning process, business.gov.au offers a planning template as well as some tips to get you started.
2. Monitor the opposition
Once you have settled on your target market for 2021, it's often a wise move to check out the competition. Luke Maddison, a director of sales at the marketing consultancy Sintoro agrees. "It's always useful to know what the competitors are doing. But copying them isn't necessarily going to deliver you a result, it's just another input to consider."
There are subscriber tools such as SEMRush and Ahrefs that allow you to monitor your competitor's landing pages, ad copy, content, links and more. However, Maddison recommends using Google, which is free. "Google Alerts is a straightforward tool that can send you reports about your competition every time they are mentioned online."
3. Automate your lead generation
Whether it's Atlassian, Wesfarmers or a candlestick maker, the aim of any marketing activity is to create leads that can be converted to sales. Maddison says lead conversion involves understanding the journey customers take with your SME and investing in a suitable customer relationship management (CRM) tool to manage this journey is usually a smart move.
He says many SMEs still try to manage their sales process on a spreadsheet, which is never a great idea. There are ample cloud-based CRMs that are perfect for small business, such as HubSpot, which you can start using at no cost. Another option is Insightly, which cost from $29 a month, although you can see how it works in a free trial.
A suitable CRM also adds rigour to your sales process if it's integrated with other systems such as Xero, MYOB and other accounting packages, as well as your marketing platforms like Mailchimp and your website. Maddison says you can think of a CRM as the "glue sticking your sales and marketing efforts together".
4. Customer retention can save and make you money
Research shows it can cost five times more to attract a new customer than it does to retain an existing customer, according to Anne Nalder, founder and chief executive of the Small Business Association of Australia.
"Increasing customer retention rates by 5% can also improve profits by 25% to 95%. It is easier to sell to an existing customer as they have trust in you, your business and what you sell."
Maddison suggests staying in contact with your clients is the best retention method. "Find out what their challenges are and how you can help them through these tough market conditions," he says.
Also, be quick to resolve complaints, Nalder recommends.
"Ensure your communication channels are open with the client during [the complaints] process. There is nothing more infuriating for clients than trying to resolve issues that take forever, or [worse] the client doesn't hear from anyone," she says.
5. New business opportunities
That's not to say you should close yourself off to new business opportunities in 2021. In terms of entering new markets, Maddison advises there is commonality across all industries, "so pivoting into another space may not be as difficult as you think".
He says to look for industries that perhaps have similar challenges to those sectors where you're strong or "at least the value of what you provide is relatable to them". For example, you might be working with IT firms, and this experience could translate well to the emerging fintech sector.
"Ultimately if you have a strong product or services and the right people to target a new industry, there is nothing stopping you from having a crack," says Maddison.
6. Manage your cash flow
Your cash flow is only as good as your accounting and reporting. Therefore, ensure your accounts are updated regularly to give you a full view of the health of your business and its cash flow at a glance.
Also, don't be too lenient on tardy payers in 2021. Xero research shows payment times for small businesses worsened during the dark days of Covid-19. Between February and May, average payments blew out by about a day, to 26.5 days. This one-day increase in payment times equates to an extra $600 million in trade credit extended by small businesses.
Mark Calleja, from Mark Calleja Accounting, recommends charging clients upfront as the best way to prevent debtor problems.
"The world has changed, and even window cleaners are asking for a 50% payment when you book their services," says Calleja. "Then you have to pay the cleaner the balance two days in advance of the work."
Calleja recently commissioned some consultants to help in his business. "As soon as I accepted their proposal, my bank account was debited immediately. So, the consultants have their payment even before I have received their services."
This transaction was facilitated by the client engagement and payment software Practice Ignition, which costs from $99 a month - although there is a 14 day "try for free" period. "Practice Ignition allows you to send a proposal with your payment terms and a business can adjust the software to bill the client on acceptance of the proposal or the completion of the work," says Calleja.
7. Don't be afraid of social media marketing
Despite opinions to the contrary, social media is not complicated and should be part of your marketing arsenal in 2021, recommends small business entrepreneur Richard Williams, who is a co-partner in skincare manufacturer CameLife.
Based on the NSW Central Coast, CameLife produces a range of restorative serums, day and night creams and eye creams from camel milk sourced from farms around Australia. According to Williams, since COVID-19 hit more than 95% of CameLife's turnover is derived from website sales.
The manufacturer uses a combination of Facebook marketing, Google AdWords, search engine optimisation and email marketing to attract traffic to its digital shopfront.
"Social media marketing was new to me, and I decided to do it myself after using a few agencies unsuccessfully," he says. "Early this year we were right down on online revenue, so I took over the marketing and our online revenue started to rebound, even before COVID-19 hit. We had our best month in September."
For those new to social media marketing, there are some great apps that can manage all your SME's social media ad buying, while also providing excellent metrics, says Williams.
"We use AdEspresso, which is part of the Hootsuite range. The app costs just $US69 (A$97) a month and allows us to easily test multiple variations of social media advert content. It takes the complexity out of Facebook and Google advertising," he says.
"In addition, AdEspresso comes with some great tutorials that are helpful for those new to social media ad buying and it offers an online community that can help you with any queries very fast."
Another valuable social media advertising app worth exploring is Madgicx, suggests Williams. "You can't place ads through Madgicx, but it's great for managing ads that are up and running."
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