As the Mackay regional economy begins its latest business boom, let’s not forget the mistakes of the past. Indeed, let’s be the best we possibly can this time around. During the depths of the downturn, a colleague of mine remarked, “a lot of businesses made a lot of money during the boom, but most should have made a lot more!”
Let’s take a look at how the Mackay employment rate has improved recently. According to the Queensland Government Statistician’s Office statistics released in July 2018, the number of employed persons in Mackay SA4 (Statistical Area Level 4) in June 2018 was 99,200 persons – an increase of 5,700 employed persons, or 6.1 per cent over the year. The unemployment rate in Mackay SA4 in June 2018 was 3.4 per cent, a decrease of 2.0 percentage points over the year. The unemployment rate for this area was the lowest of all 19 SA4s within Queensland.
These stats demonstrate the current strength of businesses in the Mackay region, so if your business is based in this area, now is prime time to ensure your business is on track to take advantage of the business boom. Here’s how…
In almost every case, success in business is fuelled by these few critical factors:
- unbridled passion for achievement (belief – love your business)
- commitment to improvement (conviction – stick to the plan)
- load sharing (trust – you can’t do it all yourself)
As a local business CFO advisor, I’ve worked with businesses through the good, the bad and the ugly of the past few years. The smart ones survived, and listed below are examples of the type of activities we focused on for specific areas of their business:
- Identifying and submitting winning tenders – a lot of time can be invested in tendering for work and you need to be sure it’s well directed. A well-crafted tender can position you ahead of the pack.
- Forming strategic alliances – can be a real ‘leg up’ for your business expansion plans. But the way you go about it, without burning relationships and wasting lots of time, is where experience makes all the difference.
- Leveraging your supply chain – you’ve probably heard it many times before – “big mining company ABC are trimming their preferred supplier list.” They do this for good reason – too many suppliers, means more overhead and potential loss of bargaining power. You should think about doing the same and getting more value out of your main suppliers.
- Government grants and assistance – these can provide vital funds for business growth and getting help navigating them can save time and ensure the outcome is what the business really needs.
- Targets and incentives – these are a great place to start building your sales, profit, cash flow and business value.
- Staff performance alignment – a great way to motivate staff, have them feel part of something bigger and make your business an ‘employer of choice’.
- Systemisation and management by exception (the rule of 95/5) – a great way to build and empower staff to make good decisions without the boss having to answer every question that arises. 95% of day-to-day matters should follow set procedures and run perfectly smoothly, the role of the manager/boss is to handle the other 5%.
- Knowledge gaps and scripting – we’ve all heard the old saying, “a good salesman could sell ice to the Eskimos!” But the reality is that not all sales staff are a perfect fit for their role. However, most salespeople improve their performance dramatically when coached in the proper techniques (upselling, closing, after sales service etc.) and when provided with the proper tools, for example templates and scripts of appropriately prepared wording to be used in particular situations such as “would you like fries with that?”
- CRM and loyalty programs – a well maintained CRM (Customer Relationship Management system) is a great way to build sales. It makes it so much easier to communicate with customers, prospective customers and anyone who needs to know what’s happening in your business. Everyone loves a loyalty program – a great way to build and maintain your sales targets.
- Stock sell through – the omni-channel world. If you sell goods and aren’t using more than one method of distribution (channel), you’re headed the way of the Dodo bird! Think Amazon!
- Define the future – business owners tend to live, eat and breathe their business, it can really help to bounce your ideas off a ‘trusted advisor’ or someone who can act as a ‘sounding board’ for your ideas.
- Challenge the familiar – things are changing at a rate of knots and no-one can afford to stay the same. If you don’t embrace change you will get left behind. Get outside your business from time to time and learn new ways of doing things. And be prepared to fail sometimes – if we aren’t failing, we aren’t trying new things.
- Convene, minute and drive operational performance reviews – encourage your staff to come up with new ways to do things. They are generally at the ‘coal face’ and see first-hand how things can be improved.
- Accounting best-practice – it’s very hard to run a business if you aren’t confident in your numbers. A well set up and properly managed accounting process will provide information that you need to make smart decisions about business development. You should be getting simple, high level, graphical reports that you can quickly and easily understand.
- People and culture challenges – most humans want the same thing: they want to be valued, motivated, and feel part of a team. If you set things up right in your business, this will be a natural result of your efforts and it will become the norm, rather than constant complaining, infighting and other endless headaches.
Paul Rickard, a CFO On-Call Partner based in Mackay, is a well-established local and experienced commercial accountant, with a passion for helping businesses achieve their growth potential. To find out more about how Paul can help you take advantage of the next business boom in the Mackay region, please call us on 1300 362 436.