What CPA Australia sees successful small businesses doing differently
SMALL businesses all have a certain character when it comes to strategy, especially because they each have limited resources that can either be deployed for short-term gains or long-term improvements.
In the 10th edition of CPA Australia’s APAC Small Business Survey, the body dissected the performance of firms across the region.
The report makes an attempt to understand the very fabric of the entities that grow quickly and what they do to gain an edge over their peers at home and across the region.
Data and insights that CPA Australia has put together suggest that small businesses that grew last year and hope to continue on that trajectory this year are more likely to have between 10 and 19 staff than zero to four staff, and have been established in the past 11 years rather than for more than 20 years.
In fact, the study also found that most rapidly growing small businesses are likely to be based in developing markets such as Mainland China, Indonesia, Malaysia, the Philippines, and Vietnam than in developed markets such as Australia, Hong Kong, New Zealand, Singapore, and Taiwan.
Although there are quite a few things that stand out between small businesses that quickly and those that don’t, one area where both groups have a clear difference is in their investment in technology.
Businesses that reported growing strongly last year are much more likely to have invested in technology. In fact, 75.2 percent of businesses that grew strongly reported that their investment in technology was already profitable.
CPA Australia also found that 33.2 percent of businesses that grew strongly reported that technology had one of the most positive impacts on their business last year.
Based on the data, the report points out that quickly growing businesses may have better access to the skills, knowledge and experience required to invest in and utilize technology that generates a quick return on investment, have the extra resources required to invest in the right technology, or are in a better position to take risks with technology.
Here are some of the other things that CPA Australia feels small businesses do differently:
# 1 | Focus on improving customer satisfaction
Customer satisfaction is key in today’s day and age. People want to get their money’s worth and they know that they can vote with their money to ensure companies listen to them and give them what they need.
Given the competitive marketplace, small businesses must be just as concerned with customer satisfaction as their larger counterparts.
Obviously, many of the customer satisfaction improvement projects that small businesses can take on are driven by technology.
Take payments, for example. In today’s digital-savvy world, customers don’t like to handle cash and worry about collecting and managing change.
Small businesses that accept cashless payment methods such as mobile wallets and credit or debit cards tend to provide a certain degree of comfort as compared to those that don’t.
Therefore, CPA Australia’s report centers around focusing small businesses to care more about customer satisfaction — and suggests that maybe technology is the way to go about providing that.
# 2 | Use social media to better engage with and understand customers
The survey proves using social media helps small businesses grow significantly faster than those that aren’t.
Further, it highlighted that small businesses in Asia seem to be far more likely to use social media than their counterparts in Australia.
In addition, CPA Australia pointed out that businesses that are growing strongly are using social media in a variety of ways.
For example, many are using social media to gain a better understanding of their customers and potential customers, which feeds into improving customer satisfaction and introducing new products and services – themselves factors closely associated with businesses that are growing strongly.
An important suggestion that the report makes is that small businesses operating in different markets should adapt their social media strategy to suit those markets.
For example, using WeChat in Mainland China, Facebook in the Philippines, and Facebook, Instagram, and WhatsApp in Indonesia will yield better results than using a homogenous strategy across all markets.
# 3 | Make online sales a more important part of their business
CPA Australia’s survey highlights the fact that online sales are an essential element of businesses in Mainland China, whereas it is still something of a novelty in Australia and New Zealand.
In fact, it points out that businesses in Mainland China’s Shenzhen are more likely to earn more than 10 percent of their income from online sales.
The survey indicates that there’s a strong link between growth and online sales, which is why it advises small businesses in Australian and New Zealand to invest time in determining whether such an approach is right for their business.
For those outside these two counties in the APAC, selling online is quite important given the growing e-commerce trend in the region.
In fact, businesses in Australia and New Zealand that sell to countries such as Singapore and Hong Kong must seriously consider taking their stores online.
Selling online should also be considered one way to enter new markets without having to commit significant resources to establish a new physical presence — saving rent and staffing expenses — which can be diverted to marketing the brand in the new location.
Overall, the report points out that there are plenty of opportunities for small businesses in the region, but highlighted that leveraging technology is key to ensuring success.