Gearing up for small business growth

Landing globally recognised clients might sound like a dream come true for many small businesses. But for this Sydney events company, it’s a reality.

When revenues in his small business grew by 50 per cent, Anthony Halprin knew it was time to make some big decisions.

The co-founder of Sydney specialist events agency Sense says working with Google and YouTube was a huge coup that prompted management to scale up the business.

Winning such high profile clients came after 10 years of putting on events for a range of mid-tier clients. “Landing the Google account signalled that it was time to move offices and hire more staff,” co-founder Anthony Halprin says.

Less than a year later, they hired even more staff, prompting another office move. Staff numbers fluctuate between 12 and 20 due to the seasonal ebbs and flows that come with event project work, Halprin says.

The growth has funded a rebrand and enabled the business to bolster its marketing and PR budget to spread the word that they’re working for bigger brands. These expenses have been funded organically from business profits, Halprin says.

Confident of growth

Growth could be on the cards for your small business, too. Approximately one in two Australian small businesses are confident they’ll see revenue growth over the next 12 months, according to Commonwealth Bank research.

1 in 2 Australian small businesses are confident they’ll see revenue growth over the next 12 months.

The survey revealed the willingness to adopt and adapt to new technology is a key indicator of business confidence. In fact, out of all small businesses, those adopting technology early are most likely to expect revenue growth in the next 12 months, the survey found. Business confidence remains at one of the highest levels recorded in the last seven years, according to the Sensis Business Index, released in March.

The survey of confidence and behaviour of Australian small and medium businesses found that metropolitan and operators remain fairly confident, although metropolitan businesses are more positive about the economy now, as well as the prospects for the economy in 12 months’ time. Key indicators measured include geographical location, confidence in local government and success of their own business.

The survey also found that six in 10 sectors currently have high levels of confidence. The health and community services sector is the most optimistic. However, those SMEs operating in manufacturing, retail trade, hospitality and storage have found conditions difficult.

Funding the growth

Cash flow management remains a constant issue for small businesses. The Commonwealth Bank survey found that while 42 per cent of small business owners opted not to pay themselves a wage one or more times in the past year due to cash flow issues, this figure is down from 51 per cent in the previous half.

Around 25 per cent of innovative young Australian SMEs (less than five years old) seek finance in any given year, according to this Federal Government report, which breaks down the capital raising options in more detail.

Halprin admits that growth has been a big learning experience. “We put a plan in place to assist growth two years ago so that we could be in a position to actually deliver what we promise to our clients. We wanted to grow. We know we’re delivering a real value-add to brands, and needed to position our business to meet the demands in the market.”

This has included coaches to help the directors learn improved ways to source better quality staff, and mitigating their risk by not putting all their eggs in one basket, despite landing such huge clients.

What to consider as you grow

There’s a lot to consider when you’re in growth phase. If your business grows too quickly, or expands too much, you could experience financial, legal, staffing or supplier problems. Be sure to plan ahead so that your growth is sustainable, and check this handy checklist, produced by the Federal Government.

One of the elements often overlooked is updating your insurance policy, so that you’re mitigating the risks that come with running a small business.

Policies that covered your business adequately last year might not be appropriate anymore. For instance, your building and contents insurance policy might not need updating; other policies, such as employers’ liability, cyber insurance or business insurance may need to be updated or added to your policy portfolio.

Reduce your chance of being caught with insufficient cover by contacting a Steadfast insurance broker. They can review your business and personal insurance needs, to help ensure you have the most appropriate insurance in place.

"Set aggressive growth targets by reviewing every sector of your business," Fred Schebesta.

Serial Australian entrepreneur Fred Schebesta says if you want to take things up a notch in your small business, you can’t be complacent. Set aggressive growth targets by reviewing every sector of your business and look for ways to scale up, the CEO and co-founder of finder.com.au and finder.com says.

“Whether that’s investing more in your human resources, expanding your marketing spend or boosting revenue targets, if you want your business to grow, you need to constantly look for ways to evolve.

“You also need to be savvy with your business finances. If you’re struggling to meet loan repayments, think about consolidating your business debt or switching to a more cost-effective bank. If you think your landlord is overcharging you, negotiate for a lower rental amount. Getting a talented accountant on side is also key before entering your next growth phase. But above anything, don’t be complacent and lose sight of your vision,” Schebesta says.

The key message here is that if your business is on a growth trajectory, make sure you plan ahead. Because it’s very rare for growth to happen overnight.

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