If you run a small business then you know things haven't exactly been smooth sailing over the past few years. You've survived the pandemic, and now you're facing soaring inflation and the possibility of a staff shortage.

According to the Australian Bureau of Statistics, the inflation rate for the March quarter was 5.1%, which was the biggest jump in over two decades. The figure was also higher than the Reserve Bank of Australia’s target inflation rate of 2-3%.

The increase in inflation will affect small businesses. Here are our top tips for how small business owners can prepare themselves for the impact.

1.    Increase your workers’ salaries

Wages aren’t keeping up with inflation, and in a tight labour market, workers will be keen for higher salaries. It puts pressure on businesses to increase wages and benefits. While it’s a challenging period, look at ways to improve your employees’ wages. If that’s not possible, find other ways to reward them, such as offering bonuses, incentives or flexible work arrangements.

2.    Focus on your best-performing goods

To improve your financial position, focus your activity on your best-performing goods and services. Look at reducing or removing anything with a low turnover or low profit as it’ll minimise any waste or additional costs.

3.    Review your expenses

Spend time looking at your regular expenses and see if you can cut or reduce any costs. It’s a quick and easy way to improve your profitability and bring in savings. Some tactics include changing to more affordable suppliers, streamlining processes, and ordering items in bulk.

4.    Consider passing on rising costs

It’s a delicate balancing act knowing when to increase your prices to customers who are also dealing with the rising cost of living. If you need to pass on any costs, the key is to communicate clearly and openly with your customers. Not everyone will be receptive, but your local customers will likely stick by you.  

5.    Speak to your accountant

Lastly, you should speak to your accountant. They can advise on strategies to help you save money and improve your cash flow.

How protected is your small business from a cyberattack?

According to the Australian Cyber Security Centre (ACSC), a cyber security incident is reported every eight minutes, and 62% of small businesses have experienced a cyberattack.

Cybercrime has costly impacts, with the ACSC reporting that Australians lost $33 billion in the 2020-21 financial year due to cybercrime.

If your business has an online presence, you’re at risk of a cyberattack. But fortunately, there are ways to protect yourself.

Assess your risk

Identifying any possible threats will help you find and plug any gaps in your security. The Australian Government’s Cyber Security Assessment Tool is a helpful tool for assessing your cyber security risks. Based on your answers, it will also give you a list of recommendations to implement.

Train your team

Training your staff in good cyber security practices is important in preventing cyberattacks. Educate employees on spotting and avoiding scam messages, what to do if they encounter one, and remind them to use strong passwords. A cyber security policy can also help staff understand their responsibilities.

Secure your networks

You can safeguard your devices and networks by:

• Using strong passwords or passphrases.
• Setting up multifactor authentications.
• Setting up a firewall to monitor traffic to and from your network.
• Installing security software such as antivirus, anti-spyware and anti-spam filters.
• Keeping software up to date.

Back up your data

Regularly backing up your business’ data will help you recover any information if you lose it due to a cyber incident. Whether you back up your data onto an external drive or to the cloud, make sure you do it regularly, ideally on a weekly basis.

Control access

You should restrict staff access to data, accounts and systems to prevent accidental or malicious changes. Administrative privileges should only be given to a limited number of trusted individuals, and remember to remove access when an employee changes roles or leaves the business.

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Taking these steps will help reduce your business’ risk of a cyberattack. For more detailed tips, you can visit the Australian Cyber Security Centre.

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Get in touch to find out how we can help. We’d love to hear from you.

Managing your cash flow is an essential part of running a small business. It will help protect your business’ profitability and minimise the effects of economic changes. Here are our top tips for managing your cash flow.

1.    Stay on top of your accounting

Choose high-quality accounting software to help you manage your cash flow and keep your finances up to date. Good software can automate and streamline administrative processes such as creating invoices, tracking payments and running reports. Many software options are available on mobile, so you can access information wherever you are.

2.    Reduce your costs

Look for ways to reduce your expenses. These include:

• Cutting down on staff overtime
• Making your business more environmentally friendly, such as going paperless, recycling materials, and turning off appliances, computers and lights when not in use
• Improving the efficiency of processes and systems.

3.    Set up a cash reserve

A key step in managing your cash flow is ensuring you have money for an emergency. Your cash reserve should ideally be a separate account. Aim to set aside a small amount regularly and have this automatically paid. It will put your business in a strong position in the long term.

4.    Manage your debtors

Create a system for keeping track of customers who owe you money. It may be helpful to send invoices when jobs are completed, or products are delivered. Make your invoices easy to read by having clear due dates, amount due and payment methods. Email invoices rather than mailing them.

5.    Research small business finance options

Running a business has many expenses, so you may consider finance options such as small business loans and equipment finance. These solutions allow you to buy equipment or access funds for growing your business without impacting your cash flow. We can provide advice on the right solutions for you and your business.

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We've helped many business owners manage their cash flow and understand their finance options. If you require strategic, ethical guidance, contact us today for an appointment.

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Whether you’re starting your first small business or looking to grow, you may be thinking about getting a business loan. It can be tricky navigating through your options, so here are five things to keep in mind:

1.    Work out your reasons

Before choosing a loan, be clear on why you want to borrow funds. It’ll also be one of the questions a lender will ask you. Common reasons include managing your cash flow, buying new equipment and expanding your business.

2.    Understanding your loan options

There are different financing options available to small business owners, such as:  

• Business loans: funds that you can use to invest and grow your business.
• Car and equipment finance: lets you buy a vehicle, commercial equipment, and machinery without dipping into your funds.
• Business overdraft: approved extra funds linked to your business account. You can access it whenever it’s required, such as covering unexpected expenses.

When comparing loans, look at interest rates and check for any hidden fees and upfront costs.

3.    Have a business plan

When applying for any financing, lenders require a detailed business plan that shows what you want to achieve and how you’ll do this. It takes time to prepare and research, so don’t rush it and consult a professional if you need help.  

4.    Get your paperwork in order

In addition to your business plan, get your paperwork ready. This includes:

• Financial statements
• Proof of individual income
• Bank statements
• Identification (if you’re a new customer).

5.    Seek professional advice 

We can take the guesswork out of finding the right finance solution for your small business. We'll get a clear idea of your business’ needs and goals and provide recommendations tailored to your situation.  

As small business owners ourselves, we’re well placed to help you with your financing needs. Give us a call today.