In recent years we’ve seen Australian startups transform into very successful larger businesses and export their intellectual property internationally. Atlassian, Envato and Freelancer are great success stories that show the capacity of Australian entrepreneurs to create innovative services and sell them beyond our borders.
That being said, I still see many small and medium companies fail at successfully growing and expanding, despite great ambitions. Most of them still have the wrong idea of what is required to drive and manage growth, and they make basic mistakes that negatively impacts their business.
Based on my experience, having participated to the creation and growth of a multimillion-dollar tech company currently expanding in the Silicon Valley, I recommend Australian SMEs consider the following tips. If followed, they can make a huge difference.
1. Financial success doesn’t necessarily come with external funding
For many startups and SMEs, growth is associated with raising capital. Of course, that is a great way of attaining extra cash to either invest in your technology, hire new people or tackle a new market. But it is not a necessity.
From experience, you do not need external investments to grow. By not taking any debt, you actually free yourself from the investors’ watch burden, and can quickly manage to become profitable and grow.
It is as simple as following a few guidelines and optimising every step of your development, making smart (and not rushed) decisions:
- Use your energy to acquire real paying customers rather than grants or venture capital funding. In the long run, this is what is going to make you successful;
- Stretch your dollar. You need to ask yourself: what real return is this investment going to generate for the company? Hard cash is what matters in the initial stages of growth; and
- Remember appearances do matter. Fortunately it has become relatively easy to portray yourself as bigger than you actually are. Your website is what most potential customers will first encounter. Invest your time and effort in delivering a great website that gets your message across.
2. Don’t let exponential growth take you by surprise
You never know when an idea or a new service is going to be successful, but you should be ready for it. Many SMEs fail – or aren’t able to grow as they would like – because they are not ready to manage explosive growth. Success can be a burden if you do not know how to address it.
My advice: don’t take too much business too fast, as tempting as it is.
And if you do experience massive growth quickly, make sure you don’t fall into one of the biggest traps: giving in to the ‘recruitment rush’.
When faced with a two or three-digit growth, organisations need to produce more, invest in extra support resources, and fine-tune their marketing and sales efforts to ensure the client pipeline is well managed. All of these mean that you need extra staff.
You might want to fill the gap as soon as possible but my advice – even if counterintuitive – is don’t rush in and hire people just because you have to.
Take time to hire the right people. Talent is key, especially for small organisations. Investing extra time in the hiring process is really worth it. The staffing choices you make during a strong growth period will be key in the success of your company.
3. International expansion requires humility
Most business leaders know that expanding in other countries means adapting to a new market and a new culture. Do in Rome what the Romans do. This is business development 101. However, I see many SMEs overlooking this key expansion component because they want to grow faster.
Whether you want to enter New Zealand, the UK, or Singapore, take a humble approach. Of course you know your product or service better than anyone, and based on research you have undertaken, you probably have a good idea of what is required to succeed in a foreign market. Yet, you remain an Australian company and don’t know better than business leaders operating in the markets you are trying to enter.
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Although it might be tempting to send an Australian sales team to work on site, local skills often have much more value than you think and you should make an effort to hire local talent.
If you go to another country with an Australian mindset there’s a good chances you will not succeed – or not as much as you could. Local people have the best knowledge of their market, they have existing relationships, and know exactly how local business is done. Don’t be arrogant by trying to impose your ‘rules of the game’; adapt, listen, and be open to do things differently. But at the same time, don’t lose your Australian spirit and can do attitude, it’s a great selling tool.
Don’t go to the US too soon – Australia is a great test market!
The US is a very attractive market, especially for tech companies. But it is also an ultra-competitive market that requires a well-oiled sales and marketing strategy.
My advice to Australian SMEs is to take advantage of the Australian market before you go to the US. Many companies forget that Australia is a fantastic test-bed market. By spending time proofing your business in Australia you will have higher chances of succeeding in the US – and if you go to the US and fail, you will at least still have a business in Australia to get you back on your feet.
The two biggest keys to success are time and talent. You can have the best product or service in the world, but if you do not have the right person selling it, the chances of failing are very high. By allowing yourself time to think during rush periods, you will surprisingly end up making quicker and smarter decisions that will benefit your business today and tomorrow.