It’s not something that any small business wants to think about but the reality is that business does on occasion hit bad times. Here are some ways to avoid needing help, and who to ask when you really do.
While many small businesses in Australia are trying to do the best they can, it’s inevitable that many will also fail. One third of new businesses failed between 2007 and 2009 according to the ABS, and it’s something that new business owners constantly have in the back of their minds.
For companies like Bond Street 180, a business advisory service, this statistic is something that needs to be addressed. When Dynamic Business spoke to managing director Daryl Wright, he expressed a desire to help businesses grow and get past the first few years of struggle. “My personal passion is to see small businesses continue to grow and develop. A lot of people have great entrepreneurial ideas. Their ideas are centered around their passion and their core skill sets. And many of them will chug along and earn a couple of hundred grand a year, but they’ve got potential to go to another level. And if we can take a role in defining and supporting those to see pathways for them to grow into something bigger, better and larger, that’s exciting.”
Wright believes that many small businesses are limited in their growth by their own internal issues that are yet to be addressed, as well as the most prescient of all small business issues, cashflow. “Any strategy development is dependent upon your ability to have the funding, the ability to have the resources to do that,” Wright acknowledges.
Despite his passion in helping small business grow, Wright is conscious of the fact that new small businesses can fail. One of the reasons that businesses get it wrong is due to their internal structures, says Wright. “First of all, depending on your size, you need to address your own leadership management structure. I can give you the example of a tradie, who does well and before long he earns $20-$30 million. He has the skill sets to run the business but there is a leadership and management issue. So be sure of your management limitations and get help, get support in the leadership area. There are a lot of people that can provide that kind of support.
“Second is strategy. The moment you see warning signs, like you can’t pay bills on time, you’ve got high levels of customer complaints or you’re passing unnecessary credits. The moment you start seeing things which are negative to the normal patterns of business, ask the question what’s going on. And never look externally for the issue before you’ve looked internally. Most problems are internal, not the GFC, or the economic climate. Those are our external factors but if your business is starting to hit the slide, have a look at what’s going on internally. There’s often something fundamentally wrong internally.”
Adding to internal management and working on your business strategy, Wright also believes that you need to look at your own staff. “We have a wonderful culture in this country. We tolerate a fair bit. But look at the performance of your team. Do they know what is expected of them? How are your relationships with those people? Chances are, if your relationship with your team isn’t good, you’re gonna hit tough waters at some stage. Because those are the people who are making it happen. If they’re not respected, not empowered and not motivated, they are not going to perform at 100 percent. They are going to perform enough to get their paycheck each fortnight. You need to be sensitive in those areas.”
If those solutions don’t help, Wright has one final piece of advice for small business. “Call us,” he laughs.