It’s not an easy feat to build a business and it can be significantly more difficult to defend and maintain – to overcome the challenges and future-proof your business against potential risks that may arise.
With this in mind, let’s take a look at five of the top business risks facing Australian SMEs and how you can minimise your exposure to adverse influences, defend against unnecessary risk and prepare for the future.
Business Risk #1: Changes to the business landscape
No business, regardless of size, location or management style is immune to the challenges arising from changes to the modern business landscape. Whether it’s local or global economic factors or new competitors to the market, businesses can feel the sting when they least expect it.
With the recent challenges of the Australian dollar value, it’s been tough for small businesses who are importing stock. Fluctuations in exchange rates can come unexpectedly and add significant cost. Many small businesses have felt the pressure of balancing imported stock price increases with local expenses, like the costs of physical premises and rising employee wage expectations.
Being able to see your financial position in real-time and have accurate, up-to-the-minute reporting can play a crucial role in how well you can respond to the financial influences that impact your business. Transparency across the business and access to this information allows you to develop timely, data-driven strategies and keep everyone informed of financial opportunities and challenges.
Business Risk #2: Rising operational costs
Rising importing costs is an obvious business risk, but you also need to be aware of rising operational costs. This can affect your bottom line and profit margin.
Operational costs can sometimes be more difficult to identify, but when you’re able to unify the right business information, easily report on and digest that information, you can be better positioned to minimise the impact of rising operational costs so they don’t erode your profit.
The first place to start is with technology and implementing a platform that can give you:
- A dashboard that can quickly give you insights on expenses
- Real-time reporting on revenue and cost of goods sold (COGS)
- Accurate inventory levels
- Automated processes
- Business data that can inform you of the current position and future forecasts
Business Risk #3: Out-dated technology
Many business owners can become consumed with day-to-day operations. And while it does take a little time to step back and see whether your business systems and technologies are allowing you to run as efficiently as possible, this can be time well spent in the long run.
Find out from your staff which processes are taking a lot of time and ask them what their frustrations are with the current systems. You might even consider sending out a customer survey to find out what future improvements they’d like to see from your business. It all starts with getting a picture of the most important improvements needed and identifying what you need to be doing to stay competitive.
If you’re using outdated software that makes running reports time consuming, confusing and doesn’t provide live information as it happens, then how can you be sure you’re making agile business decisions based on accurate, real-time information?
Process efficiencies, automations and real-time and cross departmental visibility are just a few of the big benefits which the right business management technology can bring to your business.
Business Risk #4: Inaccurate data
The amount of data in business reports can be overwhelming. In fact, many small business owners are using multiple systems and often entering the same data multiple times or juggling an increasing number of outdated spreadsheets to make decisions. This not only takes up additional employee time, but also leaves the business open to human error when manually entering data.
This is where a dashboard and automated reporting can provide real-time visibility of information that’s important will help to ensure you’re making the right decisions. This can give you access to the latest insights across sales performance and forecasts, stock availability, profitability and costs to stay on top of what’s happening.
Business Risk #5: Non-compliance
Keeping track of compliance regulations and protecting against fraud is a key business risk which is often overlooked.
Have a look at whether your accounting system allows for your users to have defined roles which allow access to only the information they need to effectively do their jobs. And keep in mind this isn’t about reducing visibility, but rather about reducing liability.
Minimising your risk means taking the time to really understand those risks. The more you think ahead in terms of your business growth, not only in regards to workforce requirements, but technological advancements and future proofing your business, the better chance you’ll have of ensuring the ongoing growth and resilience of your business.
Stephen Canning is the CEO of JCurve