Five best practices for business owners in Australia
Australia and the rest of the world are recovering from a global crisis. Amid market fluctuations business owners understandably have mixed sentiments about the future. However, an emergency can also be an opportunity for growth. Here is a look at some of the things that Australian businesses are doing to survive and thrive.
1. Take stock and benchmark.
Every business owner must have a clear view of where they stand financially. The COVID-19 crisis forced firms to be much more mindful of their business processes, and the areas of improvement in those processes. To help businesses recover from the crisis, the government eased repayment terms.
It deferred taxes, insurance premiums, and interest installments for some time. These measures kept many businesses from going under during the peak of the COVID-19 crisis.
Now the dust is settling. The time for businesses to resume their grip on commitments is at hand. Knowing one’s liabilities and being able to prioritize them is the key to survival at this time.
One critical activity in determining financial health is benchmarking. In a May 2020 publication by PWC Australia, small firms were advised to seek benchmarking data from credible sources. One such source is The Australian Taxation Office (ATO).
It has a repository of useful data for most Australian industries. Businesses can access the database at the ATO website and search for “small business benchmarks.”
2. Revaluate the customer base
The next step is to rethink the market strategy. Both B2B and B2C firms must consider the impact the crisis had on their customers. Lockdowns caused fundamental changes in consumer behaviors and preferences. It is essential to assess how these preferences have changed.
For many firms employing the same pre-COVID-19 strategies is no good anymore. There are two significant ways in which consumer preferences have changed. The first is about a shift in the type of products customers are demanding. The second pertains to how customers buy. Both changes represent new opportunities for businesses.
3. Rethink supply chains
A business can rarely thrive without a reliable supply chain. During the COVID-19 crisis, many businesses suffered due to the inevitable challenges faced by their supply chain partners.
Movement restrictions crippled many businesses. Some suppliers had to shrink the areas they serviced, and others had to pull the plug entirely.
There were also a few who did just fine. All of these experiences presented valuable learning opportunities. Business leaders must identify the factors that create strengths and weaknesses in their supply chains.
It is time for some careful consideration about which suppliers to keep and which ones to let go. For many types of businesses, now is also an excellent time to renew contract terms.
4. Restructure and remodel | business owners in Australia
The COVID-19 crisis raised questions about the efficacy of organizational structures. Firms with overly complicated structures are opting to change to leaner, flatter hierarchies.
It is also essential to identify underperforming areas in business. Many CEOs are choosing to sell-off inefficient non-core divisions. For others, it has become more attractive to buy-out struggling competitors.
The validity of many age-old practices has now come into question. For example, concentrating all of your supply chains in one region may be efficient, but very prone to the negative effects.
On the other hand, sourcing internationally can offset some of this risk. It has become more comfortable and more efficient to compensate overseas suppliers via international money transfer.
Acquiring a significant supplier can also reduce much of the risk in one’s supply chain. Concepts such as energy efficiency and automation have become more attractive for businesses.
5. Communicate effectively | business owners in Australia
For a business owner, it is essential to let stakeholders know what you are thinking and doing. The United Nations Office for Disaster Risk Reduction (UNDRR) highlights stakeholder communication as a critical measure in the COVID-19 Small Business Continuity and Recovery Planning Toolkit.
There could be changes in business hours, services offered, operating procedures, and so on. Inform clients, vendors, and other stakeholders about the changes in the way you run things. Clear communication makes customers feel valued, whereas the lack of it makes them turn to your competition.
Similarly, talk to your employees about new policies. Involve them in decision-making wherever possible. Establish channels for employees, customers, vendors, and others to share feedback.
Create synergies with other businesses in your community. Be up-to-date yourself on new information from the authorities. These opportunities are the silver lining in this cloud of turmoil.