Ten ways Aussie SMEs can thrive in a tumultuous economy

Running a small to medium-sized enterprise (SME) in Australia presents a unique set of challenges and opportunities. From navigating regulatory requirements to competing in a diverse market, Aussie SMEs need to adopt strategic and adaptable approaches. Here are 10 tips Aussie SMEs can use to maintain growth and resilience in an intensely competitive landscape.

1. Successfully expand and explore new markets

Expansion into new and emerging markets for small businesses and franchises can be a very exciting opportunity, especially if your business has the view to sell sometime in the future. However, before expansion, it is important to take the time to ensure your business model can adapt to the nuances of the new market, that you have a competitive USP, and offer a strong service or solution that can stand out against your competitors. 

From an operational standpoint, you also need to consider whether you have a scalable business model and streamlined operations that can support growth. Talent is also critical for new market expansion, and hiring seasoned, regional experts can make all the difference in servicing new customer segments. Finally, from a marketing perspective, there is no ‘one size fits all solution.’ Take the time to find marketing and customer engagement strategies that are highly personalised to the new regions you are targeting.

2. Negotiate better loan rates for your business

Whether you’re a first-time business loan applicant or a seasoned entrepreneur, navigating the financing options available can be overwhelming. There are a variety of funding options worth exploring, including traditional bank loans, alternative lenders, asset-based lending and SBA loans.

Of course, when it comes to securing a loan, negotiating a better rate is always the goal. To improve your chances, there are a few things you can do. First, research and compare different lenders to find the best fit for your needs. Next, make sure you have detailed financial statements and a solid business plan that shows you can repay the loan. 

Maintaining a good credit score and having collateral can also help you secure a better rate and position yourself strongly should you wish to sell your business in the future. And don’t forget to build a good relationship with the lender — showing your track record of success can go a long way. Every business purchase is unique, so obtaining guidance tailored to your specific circumstances is key.

3. Foster a positive work culture and boost employee engagement

Cultivating a positive work culture that enhances employee engagement takes time. However, the first step should be fostering a sense of purpose and impact. Encourage the belief that each team member contributes to a greater cause, instilling motivation and a sense of accomplishment.

Dhanush Ganglani is the managing director of Eden Exchange.Source: Supplied

Next, consider adopting a ‘fail fast’ mentality by encouraging your team to strive for excellence without demanding individual perfection. And emphasise teamwork over heroics. Build a team of diverse talents, focusing on collective intelligence to tackle significant challenges.

Avoid trying to ‘copy and paste’ the culture from other organisations into yours. It won’t work. Instead, discover your culture and build on that. At Eden Exchange, we consider ourselves a no-nonsense organisation but will never lose our rampant positivity. But, in the business of buying and selling, you have to be no-nonsense. At the end of the day, our customers want us to sell their business and we have to help them do that.

Finally, lead with transparency, and involve your team on the journey. Encourage curiosity and continuous learning, ensuring that no one is left behind. The working world looks far different than it did even 10 years ago. But by establishing a positive culture with strong employee engagement, you’ll have a firm foundation to weather any storm. 

4. Creating a strong brand identity

Creating a strong brand identity for small businesses is absolutely crucial in today’s competitive market. It’s not just about having a catchy name or a pretty logo — it’s about crafting a personality for your brand and making a promise to your customers that sets you apart from the rest. Think of it as your brand’s unique DNA that can never be replicated. 

Your brand identity encompasses everything from your name to your logo and even your brand voice. It’s about conveying the values and essence of your business to your customers in a way that is magnetic and compelling. When done right, your brand identity will scale effortlessly across the digital and physical world, leaving a positive and lasting impression long after the sale is made.

Building brand identity is also about building brand equity, as in the ‘value’ attributed to the perception of your brand. This is critical not only when growing a business but also when getting it ready to sell. When potential buyers evaluate your business, they consider not just the tangible assets but also the intangible assets like brand reputation and customer loyalty. A strong brand identity and equity can significantly enhance the value of your business and make it more appealing to potential buyers.

So when creating a brand identity for your small business remember these three ingredients: personality, promise and perceived value. They will help your small business make a BIG impact in the market, setting the foundation for your continued success.

5. Financial end-of-year planning strategies

To navigate this crucial period, first and foremost, it’s essential to review your financial records and ensure everything is accurate and up to date. Take the time to reconcile your accounts, review your profit and loss statements and assess your overall financial health. This will give you a clear picture of your business’s performance and help you identify areas that need attention.

If you’re looking to sell your business, end-of-financial-year planning takes on even greater significance. Potential buyers will scrutinise your financials, so it’s crucial to have accurate and up-to-date records. Clean up any discrepancies, organise your financial statements and have a clear understanding of your business’s financial performance. Not only will this instill confidence in potential buyers and help you negotiate a favourable deal, but it will also speed up the selling process.

You’ll also want to focus on maximising your business’s value. Identify areas where you can enhance profitability and reduce costs. Consider whether there are opportunities to diversify revenue streams, strengthen customer relationships or optimise operations. Demonstrating growth potential and a solid foundation will make your business more attractive to potential buyers.

6. Discover business opportunities in niche markets

Entrepreneurs can discover new opportunities in niche markets in three key ways:

Embracing technology and innovation: The franchising industry in Australia has shifted its focus towards innovation and advanced systems, enabling businesses to simplify operations and maximise profitability.

Exploring regional areas: With the rise of remote working and migration to regional areas, service gaps emerge, presenting commercial prospects for businesses seeking expansion. By venturing into regional communities, businesses can contribute to economic growth while catering to the specific needs of local residents.

Catering to changing demographics: The achievement of gender parity within the franchising industry also opens up exciting opportunities for businesses to tap into new markets. More women with increased purchasing power are entering the franchising landscape, creating a broader customer base. Businesses should infuse fairness into their operations and foster mutually beneficial relationships with franchisees.

Also, by leveraging support networks offered by franchisors, such as recruitment, marketing and supply chain management, businesses can mitigate risks and share costs while expanding into niche markets. 

7. Control costs and track business expenses

In the current economic climate, the significance of cost control and expense tracking for businesses cannot be overstated. While there are many ways to do this, we find the following make the biggest impact:

Budgeting: This is a given, however, creating a well-structured budget allows you to plan and allocate resources wisely. Regular reviews and adjustments are a must. This ensures your budget continues to align with your financial objectives.

Leverage tracking tools: Consider using expense tracking software to streamline the process. They’ve come a long way and can now provide real-time insights into your spending patterns and highlight areas that may require cost reduction.

Negotiate: We’re all in this together. Negotiate with suppliers and vendors to secure favourable terms, discounts or bulk purchase benefits to reduce overall expenses.

Work with experts: Seek guidance from industry experts and consultants who can provide valuable insights and strategies tailored to your specific business needs.

8. Leverage social media for engaged customers and maximum reach

Social media is a powerful tool for businesses when used effectively. Research shows that 78% of consumers are more likely to buy from a company they had a positive experience with on social media. Additionally, more than half (55%) discover new brands through social media rather than traditional advertising.

To engage customers and expand your reach, establish a consistent brand presence across social media platforms. Create and share targeted, engaging content to stand out in the crowded social media landscape. Consider partnering with influencers and industry experts to reach a larger audience and enhance your brand’s credibility.

Through strategic planning and execution, you can leverage the power of social media platforms to showcase the unique value propositions of our clients’ businesses, reaching a wide audience of potential buyers. 

9. Boost business with AI

From using ChatGPT to help draft business-for-sale listings to AI-powered chatbots, providing personalised recommendations and tailored experiences, AI has enormous potential to boost business growth and success. 

For one, AI algorithms have the power to analyse the preferences, requirements and criteria of buyers and sellers, enabling them to be connected with the most suitable opportunities, saving time and effort in the search process. 

At the same time, AI-powered valuation tools provide accurate and real-time business valuations by analysing various factors like financial data, market trends and industry benchmarks. This means sellers can more easily determine the fair value of their businesses, streamlining the negotiation process.

There are also AI-powered analytics tools that can extract meaningful insights from vast amounts of data, empowering buyers and sellers to make informed decisions when assessing business opportunities. 

We’ve seen this first-hand with platforms like DealXchange, which leverages AI to simplify and streamline the entire business buying and selling journey in new and exciting ways. When used correctly, AI can enhance customer experiences, improve efficiency and help you stay ahead in today’s competitive landscape.

10. Optimise tax time planning

Effective tax planning involves a mix of smart strategies that can enhance your financial situation while still “playing by the rules”. 

First things first, begin by conducting a thorough analysis of your finances to identify potential deductions, credits and incentives. Accurate record-keeping is essential to substantiate your claims and reduce the risk of audit.

Selecting an appropriate business structure, such as sole proprietorship, partnership, corporation or LLC is also crucial. Each has distinct tax implications, so understanding their differences is essential in aligning your setup with your tax goals.

Investment planning is another avenue for tax optimisation. Explore tax-efficient investment opportunities like retirement accounts or funds to make the most of your strategy. Tax rules can sometimes feel like a game of musical chairs as they are often evolving. So make sure to keep an eye on any changes in tax law, ensuring your plan stays up-to-date and in line with the latest regulations.

The path to success

The path to success for Aussie SMEs isn’t just about survival – it’s about thriving in a dynamic landscape. By integrating these business tips, entrepreneurs and business owners can carve out their places in an ever-changing market, ensuring a bright and prosperous future for their ventures. The Australian SME arena is ripe with potential, and those who seize the opportunity stand to achieve remarkable growth, influence and impact.

Dhanush Ganglani is the managing director of Eden Exchange.