In a year of unprecedented challenges and uncertainty for Australian small businesses, ASBFEO Kate Carnell and MYOB CEO Greg Ellis are hopeful that SMEs will soon see the light at the end of the tunnel.
With lockdown restrictions easing across the country, businesses are opening up and getting used to the new normal — whatever that may look like.
In a business landscape that can shift overnight, the SMEs that will survive and thrive are those that embrace digital transformation, according to Carnell and Ellis.
“Small businesses need to look at where there’s a customer need and a community need, and look at how to provide a digital service offering to deliver customer requirements,” said Carnell.
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“But if you don’t do it in a way that enhances and embraces the digital economy, you’re dead before you start.”
Federal Government must “get on the digital train”
SMEs are keen to embrace digital: 15% of small businesses wanted the budget to contain incentives for further digitisation of business processes and transactions, according to MYOB’s Business Monitor: Budget Edition.
But Ellis and Carnell were quick to point out the lack of digital incentives — particularly for SaaS businesses — in this year’s budget.
Ellis says promoting digital uptake is key to innovation. He points out that SMEs who invest in digital:
- grow faster
- employ more people
- are 5X more likely to be exporting their product and services
than companies who are not investing in digital.
“I think the key focus for the government going forward should be to get on the digital train as quickly as we can and allow SaaS investment to be encouraged,” said Greg Ellis.
“There’s plenty of opportunity”: Industries primed for disruption
With COVID-19 delivering a shakeup across all industries, many small businesses have had to reassess their offerings and pivot to remain viable.
Others may be starting a new venture and are wondering which industries are a safe bet in an uncertain market.
If you’re looking to improve your offerings or enter a new market, Ellis says to start with the basics.
“Before you start a business, you’ve got to answer the question: what problem are you trying to solve?
Is it a new idea or are you making an existing process better?”
Ellis says if he was starting a small business today, he would target industries that have yet to be digitally overhauled. Giving the example of fintechs targeting the financial sector, Greg Ellis advises SME hopefuls should find an industry where people are unsatisfied with the levels of service or product choice, and target that market.
“If I were starting in an SME today, I’d be looking at financial services, health, education, and transport: those big sectors that have really yet to be digitised in a material way.
There’s plenty of space. There’s plenty of opportunity.”
The secret sauce: Focus on the customer
To make the most of the opportunities presented by this budget, Carnell says SMEs should shift their strategies to focus on the customer.
“That’s always been the case in small business, but it’s much more important because customers and what they want has really changed — the way they interact with you has changed because we’ve all moved online.”
Citing nbn research, Carnell noted that 49% of Australian consumers were buying more online, and 70% of those wanted to deal with local companies for their goods and services.
“We now have this ‘Australian’ thing, which we didn’t really have beforehand. I’m on the Australian Made campaign board, and our social media interactions have gone up 600% since the beginning of COVID.”
For Australian SMEs looking to fund their digital transformation, Carnell singles out the $2 billion in R&D spending allocated in the budget.
“You’d never ever change your direction just to suit a budget. But what you can do is have a look at what’s in there both at a federal and state level to help you along.”
MYOB is a leading business platform with a core purpose of helping more businesses in Australia and New Zealand start, survive and succeed. At the heart of MYOB is a customer base of 1.2 million businesses and a network of more than 40,000 accountants, bookkeepers and consultants, for whom MYOB delivers end-to-end business and accounting solutions. MYOB operates across four key segments: Small and Medium Enterprises (SME), Enterprise, Financial Services and Practice.