Owners of small and medium sized enterprises (SMEs) are failing to properly plan to grow and sustain their business, according to a recent SME Research report.
That’s why it’s important to have a trusted advisor that will be pro-active when it comes to getting the most value out of an organisation, says Hood Sweeney’s Head of Accounting Scott Young.
SMEs make up more than 90 per cent of the business sector in South Australia and have been heralded as the saviour of the struggling economy.
SMEs are extensions of their owners’ passions, capacities, goals and ambitions and more than half of business owners said that they enjoy their work.
They are an amazing variety of businesses that are heavily reliant on individuals, usually the founder, owner-operator, or one or two key staff.
A recent sector study of SMEs in South Australia found that while most owners are optimistic about the opportunity to grow their business, more than half (72 per cent) do not have a formal business plan in place.
Owners of SMEs will be facing significant challenges, both now, and over the next 12 months as economic growth and opportunities move away from Australia.
Labour markets, population trends, business and consumer confidence are all influenced by the local market and can have impact on the growth and sustainability of SMEs in South Australia.
SMEs need to adopt a more strategic approach to their business and adjust their vision from day-to-day operations to the bigger picture.
It’s important for leaders of the business to implement formal business plans with clear objectives to get the most value out of its individual industry.
Successful businesses have formal structures and frameworks in place to drive performance, decision-making, and protocols and agreements.
Business planning was the number 1 concern of owners of SMEs and there is strong evidence to show this concern is warranted.
The failure to allocate time to develop a formal business strategy is restricting the growth and testing the sustainability of the SME sector.
Business planning is an important factor in continually improving your organisations performance and ensuring that you have an attractive business to sell or pass on.
SME directors are smart, entrepreneurial and passionate and can gain real value in creating a strategy to take their business to the next level.
Having a trusted adviser to consider your strengths, weaknesses, opportunities and threats from an objective viewpoint can create the opportunity to reassess the business priorities.
Business advisers help organisations to establish a holistic view of their needs to help develop a strategy to make improvement and growth ideas a reality.
With the right advice, SMEs can grow and improve even in a competitive market by managing key operating costs, investing in training and development and rewarding productivity.
Advisers can also help you to manage risks, identify opportunities and develop a succession plan.
For a copy of the full report, please click here.
+Scott Young is a Representative of Hood Sweeney Accounting & Business Advisory AFSL No. 485569
This advice is general advice only and has been prepared without taking account of your objectives, financial situation or needs; and because of that you should, before acting on the advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs.