Are you taking time to innovate?
Do you ever feel like you’re tap dancing on rollerblades while swinging a cat?
Don’t worry, a lot of small business owners feel the same way. And once the end of year financials are all finalised and the tax returns are ready to be filed, do you take time to sit back and reflect? Consider the year that was, and what is yet to come?
“If you don’t, you’re short-changing yourself of a significant opportunity,” says Michael Mekhitarian of ATB Partners, business advisors, based in Paramatta, Sydney.
“What we see over and over again, is that the business plan gets done meticulously at startup, usually to attract funding, and then gets filed away once the business is up and running… And it’s easy to see why.
“Statistics show that as many as 60 percent of Australian small businesses fail within the first three years. Most business owners are pretty distracted by that fact. They’re working day and night to ensure they stay afloat and keep the business alive,” says Michael. “Then, by the time they’re safely off the ground, there’s limited time for owners to take a moment and step back, to view things holistically and objectively,” he explains.
“But in all honesty, this is where the rot can start to set in because you end up just dealing with the day-to-day, coping week-to-week, and in some ways you’re on the hamster wheel.
Planning is the only way to get off that wheel. And, as a result, you can make your business more profitable – a much stronger, more stable entity – the kind of business you originally dreamed about.”
Plan with purpose
Michael says the new financial year is a great time to plan.
And there is no better way to start your planning than with the ATB 5-Step Process, which is designed specifically for small businesses – no matter the size, or industry, or specialisation.
“Most small businesses have embraced software such as Xero which gives them an excellent view of their financial position for budgeting and forecasting,” he says.
The 5-Step Process
“So, the 5-Step process is intentionally different in that it takes you through a series of important considerations to help define what your business is and articulate what you do. Most importantly, it will help you to reconnect to your ‘Why.’
A lot of business owners get caught in the grind and forget why they’re doing what they do. The original drive and passion can get lost along the way, and it’s a critical component of business, because passion is what fuels innovation. And innovation is what makes sure businesses don’t just survive, they thrive,” says Michael.
Why is innovation important?
Innovation results in the development of new products or services, or improved business processes, changes in the way your products are marketed or the introduction of new technology.
Innovation can help your business grow by improving productivity and efficiency.
Your ability to innovate will also help your business strategy – your ability to remain competitive and respond to market changes.
“Innovation doesn’t just happen; it is something that needs to be encouraged and fostered. And with that in mind, business owners need to stop, pause and take time to re-charge so they can find the energy and the right mindset to think inventively.
Brainstorming is a critical component of both creativity and problem-solving. And while many business owners focus solely on the cashflow, they do so at their peril, explains Michael.
“Finances are a critical component of ensuring long-term profitability and growth, and no business advisor would ever tell you otherwise. Absolutely, you need to keep on top of the finances, but you’ll never get anywhere if you don’t work on your business as well as in your business… Ideas are important. One small idea has the potential to make a big impact… by changing an ineffective process, tweaking a marketing strategy, fixing a product or a resourcing issue. Or, it could also be the idea that takes your business from the garage to the globe.”
So, with the new financial year just beginning, take a moment to plan your best year yet.
If you need help, ATB Partners offers tax and accounting advice, as well as financial planning and business mentoring. You can make an appointment via the website.
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