A recent survey commissioned by the Self-Managed Super Fund (SMSF) Association and the management information solution group, BStar, has uncovered some interesting facts about small business.
92% enjoy being in their own business even in the current economic climate, and 79% are focused on growth in the 2015/16 financial year. But they don’t know if this optimism is justified, with little to no time assessing their own performance or planning.
The challenge is not starting a business (about 250,000 businesses start each year with 75% surviving their first year). Instead, the challenge is staying in business.
The survey cites three main reasons for small business failure:
- Lack of strategic and business planning – only 1 in 4 had prepared a formal business plan.
- Limited business and financial management skills – 71% of businesses surveyed don’t invest in developing their skills.
- Any external professional advice is not focused on their top four business needs.
Clearly, small businesses need access to better advisors. The days of the traditional accountant merely offering a finance recording function are over. That is why firms like Accru invest so heavily in equipping their staff to provide a much broader role. Businesses need access to specialist advisors who can meet their specific needs. Accru’s profit improvement and strategic planning services are just some of the ways we have adapted our own business to better serve our clients.
What is also clear is that small businesses need to be better at planning. Without strategic and business planning, business success and growth is reactive and accidental. The most common cause of corporate failures is a lack of strategic planning. Of those surveyed, four out of ten don’t know who to turn to for advice on improving their business.
Small businesses are the backbone of the Australian economy. Healthy small businesses become the medium and large businesses of the future, and are drivers of employment and economic growth. Therefore, we challenge all small businesses to make a New Year’s resolution in 2016: spend some time planning how your business will grow and the steps you need to take to achieve this. Engage some professional experts if you need to. Make this a business priority in 2016. Please feel free to contact us if you have any questions or concerns.