Inspiration Coaching

A recent survey conducted by CPA Australia suggest that

• Skill Shortage and

• Fuel and interest Costs

are the major issues facing small businesses today.

Two other interesting findings in the survey were that

• the majority of small businesses are doing nothing about reducing their greenhouse gas emissions

• Compliance is not as big an issue as it was 5 years ago for small businesses, however an increasing percentage of small businesses want to see simplification in compliance for Occupational Health and Safety requirements

An issue with surveys is they can provide information but if that information does not result in action (either physical or mental) it is not that useful. In the rest of the article, to overcome that issue, I will provide a more in depth analysis of some of the findings and suggest what actions businesses can take to take advantage of the current conditions.

The findings of the survey included that it was not just a skills shortage but also a shortage of skilled staff with the “right attitude” that was an issue for small businesses. Also it appears that the skills shortage is now an important driver in employing casual staff. In comparison, in a survey done five years ago the lower total costs of casuals compared to full time employees was a more important driver in employing casuals.

A way to alleviate this problem is to keep existing staff. But one way that has been regularly suggested as a means of retaining staff, the offering of flexible employment conditions, is not being used. Only a minority of small businesses offer flexible employment conditions and this percentage is roughly the same as it was five years ago.

Small Business Initiative 1: Develop a retention plan for the staff that you want to retain. Follow the plan.

In regards to confidence in 2008 one of the biggest concerns for small businesses was the increasing cost of fuel and interest. Fuel was rated as a higher concern than interest. This implies that the fuel price increases has had a greater impact on the cash flow of a small business than the interest rate increases. This flags an opportunity for businesses as it would not be surprising if some of the businesses that rated fuel as the highest concern to have their cash flow more adversely impacted by interest rate rises than fuel cost rises.

Small Business Initiative 2: Have an analysis done on the business cost structure to understand the impact of rising costs in general and fuel and interest in particular and implement initiatives to maintain or improve the business cash flow.

One of the surprising findings of the survey was that the majority of small businesses have done nothing to reduce their greenhouse gas emissions. Those that have done something to reduce their emissions have focussed on recycling and reducing energy use. This will be an interesting trend to watch as it is possible that being environmentally aware and taking actions to reflect that may result in a competitive advantage. This will happen if customers increase the value that they place on the well being of the environment and place a greater importance on this when making consumer decisions than they currently do.

This increasing importance on the environment is reflected in a pest control business brochure that my wife picked up from a home show. The brochure included the environmental commitments of the business which were:

1. 100% carbon neutral by July 2007

2. Install solar energy hot water system by January 2008

3. Company vehicle fleet to use carbon neutral fuels by January 2010

4. Investment in solar energy grid power system by January 2015

This is a business whose operations could have an adverse impact on the environment and so they have an incentive to be proactive in regards to environmental management. They have decided to take their environmental message to potential customers and made their environmental commitments prominent in their marketing brochure.

Small Business Initiative 3: Develop an environmental plan for the business and uncover ways of how it can make a return on investment

The survey is available from the CPA Australia website.