Secrets of Some of Australia’s Best SME’s
A simple trick that online news sites use to attract attention to their news stories is to make them as relevant as possible to as many people. While that sounds simple in theory, it’s much harder than it seems, with stories about even widely popular things like cricket only appealing to about 30% of any audience. In fact, an interesting aside is that stories about weather are the most popular on every news site, as the weather is common to everyone in a given area.
But for us at Scott Partners, the stories that catch our eye in the news sites and blogs that we follow are about successful small businesses and medium sized enterprises in Australia. From those we’ve pulled out the secrets that make the most successful businesses tick, so read on and see if you’ve got anything in common.
Well, not forget exactly, just reprioritise it. We noted a quote in an article that said “revenue is vanity, profit is sanity, but cash flow is reality”. In truth, most businesses love to track and quote revenue figures, which is the result of a simple psychological bias: the revenue line is always the biggest number on the balance sheet.
But setting your benchmarks on profitability after costs or actual cash collected will give you much more insight into your SME. In turn, you can then pinpoint the areas where you can improve and take your business to the next level.
Digital is Dead
Again, it’s not exactly, but there is far too much advice out there about how to build, curate and maintain a digital presence, and not enough about retail and services basics: customer satisfaction is number 1. Every study shows that a repeat customer is far more profitable than a new customer in terms of acquisition cost and overall revenue per transaction.
So no matter how small a sale is, follow up with your client or customer. TALK TO THEM. Ask what worked for them, what you could have done better and what they would be looking in terms of support after the transaction.
Referrals Work Better
Many fast growing firms struggle with how to balance their rapid growth with getting the right people in to enable that growth. But more and more, small and medium sized firms are reporting that those new employees that come into the business as a result of a referral from an existing staff member are better quality than any others, and stay with the business longer.
There is a simple reason for this. The person giving the referral will not do so if they don’t believe the person can perform, as they don’t want to compromise their own reputation. Similarly, the incoming person will work harder to live up to the expectations of both the referrer and the manager who already have high expectations of their performance.
These are just some of the recurring themes we have come across during the year about how the most successful small and medium sized enterprises in Australia have grown in 2015. For more regular business insight, be sure to bookmark this page and send us your feedback and suggestions!