At a time when so many businesses have had to review their processes and change tact, the question of commercial viability couldn’t be more relevant.
Whether you’re in a stage of growing your business or you’re an established business and need to pivot due to the current environment, or perhaps you need to make sure it’s future-proofed for generations to come, getting your fundamentals right is essential.
Here are our top five tips to help you do just that.
1. Land on your vision, but keep the execution flexible
Having a vision for your business is critical.
According to Aaron Street, a partner within KPMG Australia’s Enterprise team in Queensland, a vision statement articulates where the business wants to be in the future and plays an important role in developing the strategic plan for your business.
“Having a documented vision can give your business a clear focus, keep it on track and avoid distractions,” Aaron tells Kochie’s Business Builders.
A clear vision aids in decision-making, as well as attracting staff and customers.
But it’s important to be flexible in the execution of your vision. As the COVID-19 situation has shown, businesses need to be agile and ready to pivot when required.
“A robust business needs to constantly manage change,” says Aaron. “Change can come from not only business disruption, like COVID, but also growth. So you need to constantly check to ensure that your vision is still appropriate, and serves the needs of the business.”
2. Make sure your record-keeping is up to date and compliant
Whether it’s bookkeeping, tax, and corporate secretarial matters, through to regulatory and industry compliance, all that paperwork is crucial if you want to scale your business.
Aside from the legal trouble you can get into if your record-keeping isn’t compliant, you also risk your business’s credibility and opportunity to grow.
“The importance of maintaining accurate accounts and records should never be underestimated” explains Aaron. “Businesses with poor record-keeping can come across a number of challenges, including issues with obtaining finance needed to fund working capital and growth opportunities.”
Also, if you want to sell your business, not having proper record-keeping can impact the sale process and potentially have a negative impact on the sale price.
On the flipside, clean and up-to-date records also have the benefit of providing you with critical insights into your business, and your financial and operational performance.
“This can help influence the strategic decisions you make,” says Aaron.
3. Don’t overcomplicate your governance structures
Having good corporate governance is critical to preparing businesses for short-term challenges and long-term opportunities.
According to Aaron, a common misconception about governance structure is that it solely relates to having a board of directors. “In practice, governance encompasses having policies and procedures in place and addresses how a business would manage risk to ensure accountability and communicate with internal and external stakeholders,” he says.
Corporate governance can also assist in setting the organisation’s tone and culture. “We’ve found that the majority of clients who have embedded advisory board structures have benefited significantly, not only with managing risk, but also growing the business,” says Aaron.
But, keep your governance structure simple. Don’t have endless policy and procedures documents or too many advisory board members as this can distract you from the business’s main objective, service offering and growth agenda.
4. Pay for the right advice to suit your business
There are countless business advisory services available so it’s important to get the right advisor who understand the various cycles involved in your business, and is able to provide the necessary guidance and advice at each of these steps.
These include the establishment of the business, how the business operates, the growth stages, the strengthening of the business and potential exit.
While KPMG is known for its work with many larger corporations, its Enterprise division is dedicated to advising the emerging, private and mid-market sector.
It works with established and emerging entrepreneurs, family businesses, private clients, not-for-profits and fast-growing companies to help them build successful organisations, offering an extensive range of audit, tax, accounting and advisory services to help in every stage of an organisation’s life cycle.
One of the key benefits of KPMG is that you get a single trusted advisor who can pull on the resources of the company’s local and international partners and divisions, while guiding you throughout your whole business journey. “It’s important that any advisor should be as invested as you are in your business,” says Aaron.
Advisors like these can also help you figure out the balance between the necessary advice and of course, the costs.
5. Encourage diversity of thought
As we’ve seen this past year, in an ever-changing market, the ability to pivot if conditions change can make or break a business, and different perspectives and experiences are invaluable when positioning your growth at scale.
“It’s important to consider that the initial direction of your business is often not the direction it ends up in,” say Aaron. “And having diversity of thought enables you to think outside the square. It enables you to be challenged, to take on board ideas that you wouldn’t otherwise have thought of.”
Diversity of thought is particularly important for early-stage businesses where the founder is having a hard time letting go of control and may make decisions that are detrimental to the business.
“Founders shouldn’t be afraid to stop working ‘in’ the business and instead work ‘on’ it,” says Aaron. “It can lead to fresh ideas and new ways of doing things that can benefit the business.”
Find out more about KPMG’s Enterprise division and how their services could help your business.
This article is brought to you by Kochie’s Business Builders in association with KPMG Australia.