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Unexpected: what the past few years have taught us about small business

  • Written by General Manager Small Business at ANZ, Paul Presland

The past few years have been challenging for business owners, with price increases, inflation and ongoing issues relating to COVID-19. Despite this, since June 2021, there has been a 15 per cent increase in the creation of new Australian businesses with one to four employees according to the ABS1.

When I speak with small business owners, what I regularly hear is that they are juggling competing priorities. Understanding and mitigating business risk is not always the top priority. However, if the past few have taught us anything, it is that being financially ready for business disruption is a sure-fire way to be prepared for the unexpected and navigate changing business environments.

While each small business is unique, many of the challenges of owning and running a business are universal – tackling cash flow, getting access to capital and staying on top of finances. Being prepared for the unexpected is key to identify, mitigate and avoid business risks. Being financially resilient in business is more important now than ever. When sudden unpredictable events bring financial pressure, it’s important to have systems and processes in place to respond.

While the pandemic was unprecedented, we learnt a lot from the businesses that navigated and adapted to new ways of working:

  • Make the most of available government support

    • Understanding what government support is available for you and your business is important, especially with COVID-19 and disaster relief payments, grants and rebates being introduced in recent years. These may be specific to your business size or sector. Doing research is important to ensure you capture all support and incentives available.

  • Take advantage of the flexibility that comes with running your own business

    • Sometimes being a small business makes it easier to be agile and flexible when it comes to adapting to changing business environments. A small business can often introduce new initiatives quicker, giving them an advantage when unexpected events impact business day to day operations. Having a clear business plan, a good view of your business operations and an understanding of which suppliers and customers are critical to your business can help you make quick decisions when needed.

  • Understand risk

    • Risk comes in many forms. Considering the different types of risks your business may attract will give you an understanding of what risks to plan for. A business risk assessment involves analysing a range of factors including the type and level of risk, and the likelihood and consequences of that risk occurring. If you don’t already have your own risk assessment method, a good place to start is with ANZ’s business risk assessment checklist. It’s also a good idea to consider external factors that may impact on your business; use frameworks such as ESTEMPLE to help identify the most important factors:

      • Economic

      • Social

      • Technological

      • Ecological

      • Media

      • Political

      • Legal

      • Ethical

  • Plan for the unexpected

    • Scenario planning is a process that you can use to plan for future events that your business may face. It considers how different events may impact the future of your business, and then uses the potential possibilities to create plans for their outcomes and prepare your business for the long term. Scenario planning may be particularly useful when there is a large change within your business environment.

  1. Imagine potential scenarios that your business may face

  2. Consider the likelihood and potential impacts of each scenario

  3. Think through the steps that will implement if the scenario occurs

  4. Once completed, use your business action plan to respond to high impact/high probability scenarios

  • Lean on your bank

    • If you’re financially ready today, ready for what’s coming tomorrow, you’re well placed to weather the unexpected. Your bank can help with that and strengthen your financial resilience. The ANZ Business Hub website has lots of online articles, templates or planners that can help prepare for business related risks based on your industry and output.

1 Counts of Australian Businesses, including Entries and Exits, June 2021


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