Recent surveys have highlighted the difficulties small businesses face, and where they could be missing out on profits. Do any of these issues affect your business?
Nearly half of all Australian businesses surveyed are investing in technology, but only one in five are looking into reviewing their current technology, according to recent research.
Executive general manager of local business banking at Commonwealth Bank, Claire Roberts, said that businesses that use technology allow for a better understanding of consumers and the marketplace, and are able to use data insights to see how brand loyalty can be achieved.
“This in turn generates connections with customers that strengthen loyalty programs, and with 84 per cent of Australians more likely to buy from a store they feel connected to, this is a telling trend. Technology can power loyalty,” Ms Roberts said.
“Given the research indicates small businesses are looking to ramp up expenditure in equipment and technology in the new financial year, there is a big opportunity to realise the potential of their business,” said Clive van Horen, executive general manager of small business at Commonwealth Bank.
“Small businesses understand the difference technology can make to their lives and the customer experience, but finding the time to research and invest can be difficult.
“Today’s challenging marketplace calls for innovation, which requires leveraging digital technologies to maintain a competitive advantage.”
A recent consumer survey by Commonwealth Bank further proves just how efficient technology is for businesses.
If a business’ lack of technology increases consumers’ wait time, its turnover may drop dramatically, as 50 per cent of respondents said they would purposefully avoid a store that made them wait to pay.
Stores that had inefficient customer service, at 68 per cent, and queuing, at 53 per cent, were the biggest reasons consumers had negative experiences – experiences that could have been avoided with the right technology.
In addition, 75 per cent said they use a credit or debit card as their preferred payment method.
Businesses with an annual turnover of less than $100,000 were found to be more likely to review their technology than those whose turnover is more than $100,000.
Bookkeeping is critical
After asking businesses for their tips, the two most popular were:
• Hire a good bookkeeper or accountant.
• Be organised – update your records throughout the year.
Research commissioned by Westpac correlates with these tips.
In the June Westpac-Melbourne Institute SME Index, 400 SMEs were interviewed, of which 84.6 per cent said they manage administrative tasks such as bookkeeping through technology, via software and applications.
On a positive note, 41 per cent of Australian SME owners are looking to reinvest back into their businesses.
“The overwhelming majority of all Australia’s businesses are small operators, so it’s pleasing to know they are looking to reinvest back in their business,” said Mr van Horen.
However, Commonwealth Bank’s research also revealed the fact that cash flow management was a point of concern for SME owners.
Nearly one in three small business owners solved their cash flow problems by using personal finances.
This information correlates with a finding of a recent MYOB survey that My Business previously reported on – that cash flow is the biggest concern for SMEs this year.