8 January 2024

Time for business owners to reflect and reset with key strategies for growth

| RSM Australia
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What challenges did your business overcome this year? Photo: File.

After some challenging years, 2023 appeared to mark a turning point for Canberra businesses. With lockdowns no longer a concern and the threat of severe COVID-19 infections diminishing, many businesses were able to return to a semblance of normality and focus on rebuilding and growth.

But it hasn’t all been smooth sailing: the year has also brought new and unique challenges that have demanded a different kind of resilience and adaptability.

Thiru Kandiah, principal at RSM in Canberra, says the main stressors in the business community right now are inflation, tax obligations and recurring COVID infections leading to unexpected staff shortages.

“Because our nation’s capital has a higher average household income compared to other states and territories, the impact of inflation on consumer spending hasn’t been felt as deeply,” Thiru says.

“Not all industries are immune to inflation complications, though, and we saw that with the unfortunate collapse of several established companies.

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“The financial pressures of inflation have also been intensified by stricter lending conditions from banks, an end to government financial assistance provided during the pandemic, and less leniency from the Australian Tax Office when it comes to overdue tax payments.”

Some businesses have responded by falling behind on other obligations such as superannuation, and this can have serious consequences for companies and their directors.

Adding to the financial pressures is the ongoing threat to productivity due to repeated COVID and flu infections in the workplace.

“Work-from-home measures are helping to ease this pain for some businesses, but it can be very difficult for those in sectors such as hospitality and retail,” Thiru says.

”This will certainly weigh heavily on the minds of business owners as we head into the busy season.”

executive woman sitting in office chair

RSM principal Thiru Kandiah says business owners should consider working with a professional adviser to conduct scenario planning and maximise opportunities. Photo: Liv Cameron.

To overcome these challenges, Thiru says there are steps Canberra business owners can take as they reflect on 2023 and start to plan for the year ahead.

“Further interest rate rises are predicted, so it’s vital for business owners to keep on top of their cash flow and budgeting,” she says.

”Consider working with a business adviser to conduct scenario planning, which is a relatively inexpensive exercise and can serve as a solid foundation for maximising opportunity and minimising risk.

“Review your pricing every three to six months and don’t be afraid to raise prices to keep your business sustainable. Just be sure to maintain open, honest communication with customers and clearly explain what is changing and why.

“Try to secure deposits ahead of starting any large projects, and carefully review any contracts before you sign. Contracts should always include contingencies in the event of unexpected events, such as delays to completion or rising material costs, which were difficult lessons learned from COVID.

“Last but definitely not least, don’t bury your head in the sand when it comes to overdue tax lodgements or superannuation contributions.

”There are many options business owners may not know about, but these become less available as the situation worsens. The same applies to alternative lending and investment options for securing capital when bank loans are hard to come by.”

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For business owners struggling with constant staff shortages, be it due to frequent absences or a lack of skilled workers in the territory, Thiru urges business owners to think outside the box for innovative solutions.

“There’s a tendency to think things will magically change, like a sudden influx of new talent or that warmer months will mean staff won’t get sick and need time off,” she says.

”These are both highly unlikely, so it’s worth dedicating time to explore practical alternatives. Be it leveraging technology or AI to become more efficient, or completely revaluating how your business operates, it’s time to recognise that the heavily manual approach of the past may not be sustainable in today’s fast-paced era.”

RSM is currently offering a free business health check for Canberra business owners. For more information, call (02) 6217 0300 or visit RSM in Canberra.


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