Is Your Business Your Major Investment

Demands on time and financial outlay can be exorbitant. Operating your own business can prove to be both a wise and very profitable approach to wealth creation, however, it may come at significant personal risk if the business fails to perform to your expectations.

So, how can those who choose to invest their capital and their time into a SME, protect their investment? And how can they nurture it for long enough to see not only a return on the investment, but to have built a strong asset base in the process?

In order to protect your investment you need to first have a fundamental understanding as to why SMEs fail. The list of key reasons is long, but the significant factors include;

a) lack of a cohesive strategy for continuous improvement and innovation
b) lack of systems for business accounting and control of business expenses
c) lack of understanding of working capital needs and cash flow management
d) lack of general business acumen and core business management skills
e) lack of understanding of the market demand for the product or service offered
f) lack of understanding of the value of family and other support mechanisms
g) lack of well developed negotiation, influencing and sales skills
h) lack of understanding of the importance of choice of location to the business
i) lack of ability to handle the challenges of growing the business
j) lack of focus, energy and persistence in the face of all types of challenges
k) lack of acceptance of personal responsibility for the success of the business.

Work on the business, not in the business

Another element on the road to protecting your investment in any business is to learn to work on the business as much as you work in the business. To this end, the ability to focus your mind and your energy on the areas where they will have the greatest effect is extremely important.

Many SME owners try to do everything themselves and are reluctant to rely on others to perform roles for which they are far better qualified: employees, contractors, outsourced service providers, or other business professionals such as accountants, lawyers, and business consultants.

This is often a direct consequence of the costs associated with employing outside or independent labour. In Australia, however, there is currently a range of business-to-business services that a SME owner can access at no cost. These businesses exist to free up the owner’s time to focus on more important things, thus reducing the need for other internal staff resources and reducing the costs associated with the underlying business infrastructure.

Substantial companies who provide essential service advisors to SMEs to manage all of their businesses needs now exist. Advisors operate similarly to mortgage brokers in that they receive payments directly from third parties for the outcomes of any  recommendations that the owner subsequently embraces. Advisors are independent of any service provider, and have access to a wide range of market leading offerings.

As with any broking-type service it pays to be diligent, but if you can find a package that suits your need, an Essential Service Advisor can make sound business sense and take away the time consuming intricacies associated with organising, negotiating and implementing (on a cost efficient basis), the full range of Essential Services needed to maintain daily business operations.

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