Small businesses wanting to grow must look at ways to “professionalise” – particularly in their finance management systems – before taking the next step. What works for a start-up with just one or two people, doesn’t work for an organisation that has experiencec business growth and has, say, half a dozen employees.
When I talk with business owners, they are often concerned about the work that will be required to put in place proper processes and systems, and how much it will cost the business in time and money. They may also be worried about what this means for their employees – will it affect people’s jobs if part of their role is automated?
However, they should keep in mind that they don’t need to do everything at once. As long as they accept the idea of change, they can start with small steps and change one thing at a time – perhaps start with the accounting system and get used to that, and then add other bits and pieces. Once they see the benefits this brings to the business – streamlining processes, providing transparency around numbers, and bringing greater efficiencies – it becomes easier and easier to take the next step.
Usually, they also find that while it may change some people’s day to day roles, it also helps free up their time to undertake other tasks, which is an advantage to the business. Take for example a small consulting firm that starts with just one person. In the beginning, the business had just one employee – the owner – and half a dozen clients. In this situation, it was relatively easy to manage the tax, reporting, payroll and invoicing using existing spreadsheet or word processing software on their computer.
However, after a couple of years of business growth, it now employs three other people (one part-time) and has over twenty clients. Managing payroll – including superannuation, bonuses, holiday leave and other leave – becomes much more complicated, to say nothing of properly recording and reporting the work undertaken by each employee in order to prepare invoices, and managing BAS and other tax requirements. To consolidate the business growth, as well as grow further, they need to implement proper procedures and have dedicated software to manage its reporting and regulatory requirements, both to clients and to the ATO and ASIC.
One big benefit of doing so is that it frees up the MD’s time significantly. In the past, they may have spent several days each month preparing invoices, producing reports and managing tax records and liabilities. Now, this takes less than one day, freeing up time to spend either working with clients, or else taking a strategic view of the business by using the data now available to identify opportunities or address problems.
Another benefit of having proper processes documented is that it helps establish business value for the future, so if the time comes to sell the business, there are clear records for any prospective purchaser to use.
There is now some very useful technology available to businesses, even the smallest of business, that can help them become more efficient and professional, and it is the best way to achieve growth.
Fiona Dixon, Business Transformation Director, HLB Mann Judd