This article is written by Allan McKeown, CEO of Prosperity Advisers Group.
Hopefully now rested and relaxed after the holiday break, what should business owners be doing to ensure that 2021 is their best year yet?
Here are six important strategies to put the COVID-19 challenges of 2020 behind you.
1. Sharpen the Saw
This might sound like strange advice coming just after the Christmas break. As we know the whirlwind of being a business owner operator can provide a tremendous sense of achievement, however it can also take its toll mentally and physically if you don’t take time out regularly to recharge the batteries. Waiting for a time when things are quiet will mean the break may never come. A good friend of mine got me into the habit of booking a few breaks at the beginning of the year before the pendulum starts swinging. That way you will find it much easier to step out of the furnace. Make sure you take a good book with you as well to improve your business skills. As business growth guru, Verne Harnish likes to say those who don’t read, barely have an advantage over those who can’t read. Exponential Organisations, the best seller by Salim Ismail was my choice over the holiday break and should be on your list.
2. Understand Disruption
The above book will be a good start to get an understanding of what all this talk about disruption is actually about. Moores Law – the doubling of computer processing power each year doesn’t just mean cooler iPhones. Coupled with some smart thinking, advances in technology are changing business models and all of our businesses will be profoundly affected over the next five years. It’s not all bad news though as your business can benefit from better technology, higher efficiency and lower costs (see point 3 below) together with the fresh opportunities that change can bring.
You need to start thinking about
4. Minimise your largest expense
- What industry is my business really in?
- What industry will my disruption come from?
- How can I future proof my business and take advantage of these rapid changes?
3. Embrace Innovation
Innovation is not just about creating a new revolutionary app, it’s about ways of doing the same things better. Technology enables all of us to take advantage of these innovations to run our businesses better, faster and cheaper. The challenge for you as an owner operator is to commit the time to understand what’s available, what will help you serve your customers better and make your team members more productive. Don’t be distracted chasing every ‘bright shiny thing’ but there will be two or three systems or processes you can implement to radically transform your business.
Most business owners don’t think about it this way but taxation is usually your largest expense. While we don’t advocate tax avoidance in any way there are many opportunities to legally reduce your tax. As the late Kerry Packer famously said “if anybody in this country doesn’t minimise their tax they want their head read because as a Government I can tell you you’re not spending it that well that we should be donating extra.”
You will need good advice though and if you don’t think you are getting it, there are plenty of good accountants that would be happy to review your position.
5. Plan to Succeed
The massive economic disruption caused by COVID-19 created many challenges but also some opportunities. A recent Research report from BStar revealed that 72% of SMEs don’t have a formal business plan with only 34% allocating any time at all to strategic planning. Economic growth and opportunities are not evenly spread throughout Australia. Labour markets, population trends, business and consumer confidence are all influenced by local factors and we also have the impact of innovation and business model disruption. Business planning approaches have evolved to see the wasteful 20 page document become a thing of the past replaced by concise one page versions that can help you and your team understand the critical success factors for your business and stay focused on implementing the necessary actions to achieve your goals.
6. Get some advice
Not even the great sports people can achieve success on their own. Business owners have clear needs for advice and assistance. You need an experienced sounding board, someone you can trust to discuss your plans and issues with and ideally keep you accountable to achieving your goals. There are many names for this role – mentor, guide, coach or adviser. It may be a friend, colleague, accountant or lawyer with some larger businesses forming a proper ‘board of advice’.
Find the right person or structure that suits you, take some time out to think about where you want your business to go, get to work on your strategic plan taking advantage of some smart technology and you will be well placed to avoid the perils of disruption while you build your superannuation nest egg.