Opportunity awaits the innovative

Globalisation and the growth of the online marketplace have intensified competition and increased the pressure on SMEs, but instead of letting this dampen the enthusiasm, its time small business owners think creatively and reshape their businesses to take advantage of changing trends.

Australian small and medium enterprises (SMEs) are a substantial contributor to the Australian economy and a major part of our social fabric, employing millions of people and servicing the needs of customers right around this vast nation.

However, if you pick up the newspaper, listen to or watch the news, or spend any time online, you can’t escape the gloomy picture being painted for Australian SMEs, particularly in the non-mining parts of our economy. News of job losses and factory closures; the persistent high Australian dollar; skills and labour shortages; cheap imports; the propensity of Australians to shop online, travel overseas and save more money, would unsettle all but the most optimistic of SME owners.

It is worth providing some context for this change to the SME environment. In the past, Australia’s isolation meant that it needed to produce virtually everything onshore, as a lack of knowledge of global options, and impractical freight costs and times, created a captured market with in-built protection based on this isolation. These primarily family businesses often saw local competitors as the only competition and, in the competitive Australian tradition, fought fiercely with each other for market share. As companies began to export, you were still able to defend your domestic market because the Australian market was not a high priority for European and US firms.

Globalisation saw the breakdown of this isolation. With the growth of Asia and the virtual marketplace, Australian SMEs are now competing both here and overseas.

Facing this pressure, it is easy to feel negative and disempowered, sensing that there is inevitability to the decline of SMEs and certain sectors. However, with great adversity comes great opportunity - an opportunity to be creative and reshape your business to take advantage of changing trends.

Amongst the ever-changing landscape of business, we catch glimpses of those entrepreneurial businesses that are debunking the current trend and creating growth in their bottom line. Many will place this success on the value of being in the right place at the right time, but what these firms tend to have in common is that they have identified the opportunities that exist today rather than trying to change the external threats over which they have no control.

Now, it’s very easy to say “be positive”, but let’s be more practical than that. Here are a few ideas to get you started.

Be positive - look for opportunities

The first step is to read the news and ask “what opportunity can I see in this?” - entrepreneurs look at problems and see solutions. Try to be an interested observer, looking for business opportunities. Look for where money is being spent and see if there’s a link for your business. A word of caution though, as the market is diverse. For example, just because everyone appears to be going online, doesn’t mean that there isn’t good money to be made offline. Investing in excellent customer experience with tailored solutions and personal service can differentiate you from your competitors. A well-targeted niche might be a better strategy than running with everyone else.

Define your business by value

Secondly, redefine your business by the value that you create, not by the products or services that you sell. Ask yourself: what business am I in? Spend some time understanding why customers buy from you, why employees work for you and why suppliers do business with you.

Engage your people, inside and outside the business. Loyalty can be a competitive advantage so look at being an employer of choice, create customer loyalty and invest in relationships. Identify ways to add value to your customers by seeking out their problems and finding a solution. The most successful products and services are solutions to an identified problem.

Think global and connect with the world’s best

In a time when the internet has made it easier for small businesses to compete with large businesses, your website can become your shopfront. You can access a global supply chain with minimal costs. Australian SMEs need to think globally from the outset. You need to concentrate on things that are within your control (not high AU$, import competition, etc). You need to take time to consider your business model, key strengths, vision and strategies. You need to use the opportunities of a global supply chain and marketplace to their advantage. Yes, Australia is a small market but we are also a small supplier. A global or even regional niche can bring huge public and private benefits. Rather than concerning ourselves with making the whole solution, what specific components might you be world’s best at?

Collaborate

We need to work better together, recognising that competing with the SME across the street might have been tactical in the past, but in the future we might need to work together to compete with businesses from overseas that might never set foot in Australia. Engage networks in other sectors - opportunities may come from outside your sector. Create links with the design community to innovate products, processes and services. Build relationships with trusted business advisers and create an informal small advisory group.

• Streamline your business

Make yourself as efficient as you can be, not only in your production but in all your processes.

• Ask for assistance

Look for programs or grants that are available. Change your perception that there is no value in something provided for free; recognising that the government’s aim is to assist Australia’s SMEs grow and become successful in the global marketplace will aid our economic growth.

Start by contacting the Australian Government’s Enterprise Connect program to access a comprehensive, confidential and independent ‘Business Review’ delivered at no charge by experienced business advisers, dollar for dollar funding up to $20,000 to help you follow through and engage a consultant to implement recommended business improvements, and provide valuable connections to other agencies or organisations that can assist your business. Be positive. The best time to build market share is when the market is down.

Enterprise Connect is part of the Department of Innovation, Industry, Science and Research and its job is to connect businesses to the knowledge, tools and expertise necessary to improve productivity, increase competitiveness and fully capitalise on the growth potential of a business. Enterprise Connect’s services are delivered through a network of state-based manufacturing centres in Sydney (NSW), Brisbane (Qld), Melbourne (Vic), Adelaide (SA), Perth (WA) and Burnie (Tas) and five specialist innovation centres strategically positioned around the country.

*Paul Hodgson joined Enterprise Connect in 2008 as State Director, Queensland, after 16 years in a range of economic and business advisory roles across the public and private sectors. He has qualifications in Sustainable Development, International Business, Training, and Enterprise Development, and is passionate about helping people and organisations create and achieve their visions through innovation and collaboration.

Enterprise Connect

www.enterpriseconnect.gov.au