How to give your venture a health check
Launching a small business is extremely solid work and keeping it purring along is equally demanding. To ensure your venture remains a growing (and going) concern, it’s important to give it regular “health checks”.
Whether it’s reviewing the business planning and recruitment processes, along with its technology and marketing campaigns, a regular health check can help your operation stay ahead of the competition and financially viable.
Review your strategy
Having a business plan, even if it is only a basic, single-page strategy, is crucial. I and my long-term business partner, the late Chris Walker, spent a decent amount of time on a business plan for our marketing and communications firm, Corpwrite Australia, when we launched it in 2008.
Over the years we regularly returned to the plan to assess our progress, which didn’t always make for pleasant reading and usually we weren’t spending enough time on generating new business. Yet the exercise always helped us to get back on track.
“A business plan is a constructive checking tool for business owners to ensure they do the things they said they would at the time they opened the doors for business,” says Luke Maddison, my new business partner.
A business plan should be a living document that doesn’t simply collect dust on a bookshelf.
“Take the marketing component of your business plan,” says Maddison. “The strategy usually covers the next 12 months. However, the activation elements, such as the advertising, marketing, public relations or social media campaigns, should be locked in for three to six months only. This way you can tweak the plan after you’ve market-tested it with the campaigns, to ensure it’s hitting the spot.”
The right team
A business will only move to the next level if its recruits add value.
“This usually means employing staff who bring additional skills to your business,” says Janeece Keller, the managing director of business consultancy the Third Floor and family travel website boundround.com.
Keller employs six full-timers and many part-time contractors in the two businesses.
“I’m not a developer, so I regularly bring web developers into the fold to ensure we are continually boosting the website’s functionality with families in mind.”
Fred Schebesta, founder of comparison website finder.com.au, who employs almost 160 people globally, says aligning a staff member’s personal objectives with the goals of the business is critical to keeping them.
“If they are meeting their personal goals, which help to achieve the company’s goals, there will be great long-term alignment,” says Schebesta, who quirkily took to New York’s famous Times Square with a message board in search of content managers and SEO (search engine optimisation) experts for Finder’s new US operation.
Interviewing is the most crucial part of building the right team, says Schebesta. “Your interviews should be a test of the core skills a candidate needs to be successful in their role. If you are hiring a salesperson, make the candidate sell themselves to you. If they are an engineer, make them solve engineering problems.”
The right technology
Small business owners don’t expect to be the technology experts when they launch their operation, says Andy Ellis, group managing director, Telstra Business.
“They start a business because they had an idea, a passion and the confidence to back themselves,” he says. “They need help to get back to what they’re passionate about, so they can be the best business they can be.”
The internet and phone are the lifeline of many small businesses.
“Fast and reliable broadband is the foundation for powering a business and the tech gadgets it uses,” says Ellis. Think about what your needs are, how much data you use and whether the plan you are on still works for you.
You may also consider making the switch to NBN. The NBN is a fibre-optic, fixed-wireless and satellite system that will replace Australia’s existing broadband infrastructure with a faster, more reliable service.
It’s predicted to deliver download speeds up to four times faster than ADSL2+, making it a game changer for small businesses.
For example, 41% of small to medium businesses that have moved to the NBN network report improved productivity due to faster connections, according to Telstra research. A smaller number (15%) report cost savings since switching to NBN, while 5% report revenue increases.
“If you’re an SME, plan to move to the NBN network before the old copper network in your area is decommissioned and your internet and phone services are at risk of disconnection,” suggests Ellis. You can check the availability of the NBN network in your area at nbnco.com.au.
Something to be aware of is that not all devices are NBN compatible so it’s a good time to think about what devices you are and aren’t using as you may have to upgrade some of them.
You should also review your phone plan to make sure it is still meeting your needs. Also ask yourself whether you even need a landline or whether a mobile would be enough.
When it comes to mobile plans, you shouldn’t pay more than $50 or $60 a month, which will give you around 3GB of data. See whistleout.com.au to compare mobile plans.
It can pay to bundle your internet and phone, especially from a cash flow perspective, but do the sums to make sure you are actually saving money.
Cloud services are another option SMEs should investigate. The cloud is a way to network computing resources and to store and access data such as documents, images and spreadsheets. If data is stored in the cloud, staff can access the information they need to do their jobs from almost anywhere, at any time of day, on any device connected to the internet.
There are also a range of apps and technologies that help businesses stay connected to their customers and clients.
“With Telstra’s App Marketplace, you can trial a variety of applications at no or low cost to see if they are right for your business,” says Ellis.
One of the apps featured is BlueJeans. “Save yourself the commute time and cost by hosting high-definition video meetings from the comfort of your couch using BlueJeans,” says Ellis. This conferencing app is an easy-to-use, cloud-based application compatible with almost any device and is very secure, says Telstra.
Another app businesses might find useful is Docusign, which enables the signing, sending, tracking and storing of documents on your mobile device. You’ll do your bit for the environment and also cut back on paper and ink as well as postage costs.
Make the most of social media
Consistency is critical to social media success, says Kate Mather, from marketing communication agency Profile Digital Group, whose clients include leading real estate brands and online retailers.
“Every platform, whether it’s Twitter, Facebook, Instagram or Pinterest, requires consistently unique content from a business and plenty of sharing, liking and comments about the posts made by your customers and contacts,” she says.
Hashtagging, using the “#” symbol on platforms such as Instagram, Twitter and Pinterest, is a valuable strategy. “Hashtagging enables people to search for products on social media platforms,” says Mather. It’s also an avenue for businesses to reach potential customers.
“If a cosmetics firm, for example, is seeking to grow its Instagram following, it could search hashtag #blueglittereyeshadow,” says Mather. Through this hashtag, a cosmetics firm will find a community seeking information about the latest products, make-up tips and, more importantly, posts by consumers about the latest make-ups, eyeshadows and lipsticks.
“By ‘liking’ these posts (if they are indeed likeable) and posting some quality content of its own, the cosmetics firm can start to build a presence at #blueglittereyeshadow,” says Mather. “Using social media in this way enables a business to grow its brand awareness and create a dialogue with consumers who might be influenced to buy its products.”
If you’re new to social media, or wish to make greater use of the many platforms, you can outsource this function. Expect to pay $250 a month per platform for a bargain-basement plan, says Mather.
“This will cover the cost of some daily posts and implementing a few strategies such as hashtagging and liking posts,” she says. “For social media training or project work, expect to pay between $80 and $100 an hour.”
What to look for in your review
Cash flow is the lifeblood of a business and, if money is tight, there are a few steps you could take to fix this obstruction.
Often slow-paying customers will be at the root of cash flow problems. If you don’t have a process to manage your debt collection, put something in place fast.
Better still, try automation. Accounting software provider Xero, for example, offers an automated reminder service with its invoicing functionality. Businesses using Xero can set overdue alerts for seven, 14 and 21 days, which are emailed to overdue debtors.
If this strategy fails, try old-fashioned diplomacy. By talking to your customers directly, you can find out if there is a problem at their end. If there is an issue, discuss whether they’d be amenable to a payment plan that will help you recover the debt.
If there is no clear-cut issue affecting a customer’s ability to pay an invoice, then don’t be afraid to ask them to settle the debt by a specific date. Only if the matter drags on should you consider legal action.
On the accounts payable side, review the payments to your suppliers. For many businesses, suppliers are as critical to long-term success as employees, and it’s important to keep them happy. However, this doesn’t mean paying them prematurely. If you’re having a few customer-based cash flow issues, get on the phone to your suppliers and seek payment extensions. Likewise talk to your suppliers about if they’d be prepared to give you discounts for early payment or volume discounts.
Consider ways to trim costs such as insurance, phone and electricity. Check which companies are more motivated to make your life easier as a business owner.
“Some energy provider plans, for example, will allow you to pick your billing days, which can make it easier for companies that send out their invoices on set days,” says Laura Crowden, public relations manager at iSelect.
“If your business income varies over time and you sometimes have to pay invoices late, you may be better choosing a plan that provides a guaranteed discount rate rather than a conditional discount that only applies if you pay on time.”
Finally, re-examine your loans and commercial leases. Again, shop around and ask your bank or finance company to match the best deal.