In reviewing the list of the 10 top threats to small business provided by the researchers, two main risk factors stood out for a credit, risk manager or business owner and manager’s focus. The first is that these threats also apply to businesses of all sizes. Secondly, it appears many businesspeople may have taken their eyes off the key fundamentals required to operate a profitable business.
Based on the above information, from a risk, credit and fraud professional’s point of view, here are my 10 main threats for creating viable business over the long term.
1 Cash in bank is paramount. You need enough cash to start and maintain your business operations, especially in the start-up years. The level of cash must also be commensurate to the size and nature of your business.
The number of successful businesspeople who have started and operated from a minimal cash holding and with the support of a credit card, are few and far between.
Cash is never lazy as some would apply as you can often purchase assets and services at a great discount with cash. Cash also allows you the freedom to operate your business without interference from others such as financiers and partners.
2 Additional financial resources, other than obtaining outside finance, is important. The long-term success of those businesses which require the use of finance as a start-up or ongoing finance, is not encouraging.
3 Cash as a payment medium, along with digital facilities, is essential to encourage customers to buy your product and service. In these fragmented economic and uncertain times, every opportunity must be taken to complete a profitable sale.
4 Reputation is everything in business. It is easy to lose and extremely hard to regain. This means that honesty and great customer service are paramount because there are no secrets in business any more.
5 Manners is said to make the man, or in today’s world, to make the person. It is also often a strategic point of difference between your business and your competition.
6 Beware of technology zealots who insist the future it is all about technology with the benefits it offers. These people have self-vested interests and will rarely willingly acknowledge any problems upfront. Two recent examples stand out about the dangers of badly implemented technology. The Australian Robo-debt and the UK Post Office debacles are the most recognisable of the applications of inappropriate technology.
A professional advocating and selling technology products and services will recognise and provide advice freely upfront on the problems of technology in your situation.
Plus, there is an ongoing focus to force businesspeople and individuals, against their will, to interact with businesses and governments. As a result, cybercriminals are being continually incentivised to keep up their malicious attacks against us all.
7 Employ the best people of their professions, providing they are team players. Therefore, look for:
- managers and administrators who can create a team environment,
- marketers who understand that your business must present a holistic example of the value which it can provide,
- salespeople who can sell a value proposition to your customers and not just take an order,
- credit and accounts receivable employees who can equally sell different strategies to prevent fraud and slow payment, whilst encouraging increased sales at the same time, etc.
8 The constant attack on business of all sizes by politicians, federal, state, and local governments plus their bureaucrats, with increased taxes, red tape and regulations. The hideous cost of many of these prescribed changes are made by people with little or no understanding about owning or managing a business.
9 The entitlement generation which believe they have all rights and no responsibilities for their actions. As a result, they believe they can change the rules after signing contractual arrangements to suit their needs Alternatively, these same people place unviable demands on businesses without any intention of buying from those businesses which are forced to adhere to their demands.
10 The courts are not business friendly and seem to support the theory that crimes such as shoplifting, failing to honour credit contracts and irresponsible protesting, etc. are victimless crimes. The result unfortunately is an increasingly lawless community, which create additional costs for business. As these costs increase and are passed on, the real victims, are the poor and the general public which are forced to endure these higher costs.
In reviewing the list of the 10 top threats to small business provided by the researchers, two main risk factors stood out for a credit, risk manager or business owner and manager’s focus. Two main factors stood out from the perspective of a risk, credit, risk manager and business owner and manager. The first is that these threats apply to businesses of all sizes. Secondly, it appears many of those businesspeople involved in the research may have taken their eyes off the key fundamentals required to operate a profitable business.
Reference article link - https://smallbusinessconnections.com.au/top-10-threats-to-australian-small-businesses-in-2024/
Want to know more about this topic, contact Kim at kim@creditmatters.com.au, or on Mobile 0411 649 261. Alternatively, have a look at what we offer via our website at www.creditmatters.com.au
