To be “in the right place at the right time” is always seen as paramount to winning the lottery. Unfortunately most of us only realise later that we had been in the place and time doing nothing in particular.
Training and assisting SME’s in understanding the wide range of computing, internet and social media options now open to them is huge. It’s a huge opportunity because a real yet solvable problem exists today and the statistics suggest those SME’s who don’t acquire and use the skills will not be around in 5 years.
In 1995 when the first Sensis e-Business Report was published 91 per cent of SME’s surveyed had heard of the internet, but few were connected or had any intention of connecting, with two-thirds of those not intending to connect saying that they could not see a business benefit for it!
Only five per cent were connected and just over a quarter of those surveyed did not have a computer. In fact the biggest technological talking point at the time was the fax machine.
The 2013 Sensis e-business report showed the enormity of the change in internet use. Not surprisingly, 98 per cent of SMEs now have a computer, with a fast-rising 69 per cent (up 10 per cent since 2012) having a notebook computer and 41 per cent owning tablets. Internet connectivity increased over the previous 12 months from 92 per cent to 96 per cent, and 26 per cent of those with a connection intending to get a faster connection within the next year.
Sensis also found that 68 per cent of small business owners have smartphones and, on average, they spend $6,200 annually on technology hardware and $4400 on software.
That’s some change in just less than two decades. However, the first thing SMEs need to realise is that while technology is enabling the change, it is actually the customers who are driving it.
While Sensis have been researching SMEs’ adoption and attitudes towards technology since 1995, they extended the research to include the general population in 2005.
The 2013 Sensis e-Business report showed that 91 per cent of Australians have a computer and 96 percent use the internet. And, when asked about their usage of the internet, the most popular activity was ‘looked for information on products and services’ (87 per cent of all Australians), followed by ‘looked for suppliers of products and services’ (82 per cent), with ‘paying for purchases or bills’ (78 per cent) and ‘ordering goods/services’ (74 per cent) also being prominent.
So the stats are telling us that people are using the internet to search for and purchase products. So if SMEs want to connect with potential customers they need to be easily found in the places people are looking.
Consequently, a digital presence will become essential for all successful SMEs. At present, 66 per cent of SMEs have a website and 72 per cent of those reported increased business effectiveness through the platform. We predict the number of SMEs with websites to increase as a result.
As with websites, it is inevitable that the use of social media will increase rapidly as SMEs better understand the benefits and imperatives of close customer interaction. The social media revolution makes the possibility of customer engagement almost an expectation: people increasingly want to comment on their experience – either through praise or pillory – and if the business does not have a social media outlet for that interaction then the customer may find another outlet where the business does not have the opportunity to directly engage.
Mobility is another reality that SMEs are slowly coming to terms with. With mobility, businesses are less connected to the physical location so business becomes an activity, rather than an address. SME’s are slow to adapt to technologies which could save or earn them more money.
As an example, in the days before Christmas we changed the flyscreens in our house. The contractor had been out some weeks earlier to take measurements and the price was agreed. After fitting the screens the contractor said that will be $x thank you, it was the agreed price and I reached for my debit card to pay. “Oh I only take cash” was his comment. It’s a long time since I carried that much cash and I realised that we have no cheque books at home.
I had assumed the contractor would have a mobile merchant terminal and that by the following day at the latest he would have my cash in his bank, all accounting completed except for the monthly bank reconciliation etc. Nah they cost too much he told me; oblivious to the savings and efficiency they offer.
Sensis 2013 research of SMEs found that the percentage taking orders online rose five percent to 56 per cent, and of those taking orders 59 per cent reported that they mainly sold to customers in the same city or town.
SME’s may now have the equipment and they have demonstrated that they will spend on technology, though few are yet fully mobile, they do not have the knowledge or skills to bring the “whole” together, to integrate and utilize the digital opportunities to build profits and cut costs.
Late in 2013 a client was looking to raise equity to take his “eConsultancy” national we looked at the model which was excellent, looked at the market and then discussed the equity needed with clients. Investors are usually Savvy and the equity was raised on day one which has to tell you something!
Some of us think better in pictures etc. Before thinking through a big idea, I usually visualise it as a diagram. I have always “solved problems” graphically. Sometimes entirely within my mind and then A1 sheets of paper, followed by whiteboards, and eventually computers. Now I use a combination of all three. I called it mind mapping long before the phrase became popular – it just seemed to fit..
Basically mind mapping is the task of transferring thought and ideas, group or individual into a written form. I find brainstorming sessions are so much more powerful if there is a mind mapper in the group and especially so if that person is good with pen, paper or the whiteboard.
Are you a mind mapper? Are you able to get those amazing business ideas you toy with when driving or in bed down onto paper? It’s a skill but not a hard one to acquire, it can be fun and importantly the results can really change your business.
WHAT IS MIND MAPPING?
A mind map is a powerful way to generate and visualise new ideas, analyse problems, brainstorm, plan, show or research, complex ideas. Isn’t this just good old fashioned “brainstorming” under a new name? I hear you ask. No, mind mapping is a more structured approach to analysing and solving problems.
We now operate in a world where graphic representations are used more frequently and our brains are responding well to graphic analysis. Here are a few handy tools you can use to incorporate mind mapping into your business process.
The most basic tool you can use for mind mapping is a whiteboard. If you have a whiteboard you can start mind mapping individually or as a team to solve problems or to formulate new ideas. Today life is so easy, when you have the whiteboard full of ideas, take a picture of the whiteboard with your phone and upload it to your computer and share it with the team. Sometimes I get the original whiteboard data on the 60 inch screen in the meeting room so the whole team can see it and we start again on the whiteboard testing out our earlier ideas. This is a great way to mind map as a team.
THE BIGGERPLATE MIND MAP
If you want to up the ante and introduce a little more structure and sophistication into your sessions there are now several free or inexpensive mind mapping programs available.
Biggerplate’s mind map should meet most of your needs. In this extensive mind map collection, you’ll find templates for almost every task and challenge, including business mind maps, training mind maps, and general mind maps which you can use in your everyday life. The Biggerplate templates include everything you need from SWOT analysis (strength, weaknesses, opportunities, and threats), time management matrix, project management, task management and even tracking objectives.
If you and your team are struggling to get the mind mapping started, the Biggerplate templates can lead you into and through the process. I enjoy looking through Biggerplate’s top 10 mind maps just to see which templates other professionals are finding useful.
Very easy to use and inexpensive to buy Mindjet is an easy to use program designed for a variety of tasks, including mind mapping and brainstorming, Mindjet has flexible features which can be used in a variety of tasks including mind mapping, strategy development, marketing, sales and information technology.
MAPS FOR THAT!
The title just about says it all. Maps for That is great if you’re looking to share the mind maps you have just created or if you want to browse mind maps submitted by other teams or team members. It comes with amazing features and includes user-submitted mind maps in a variety of categories; including business, analysis, management, education, entertainment, events, and productivity, just to name a few.
If you’ve created a mind map you think others may find useful, upload it to the Maps For That site so that other users of the service can share. Initially just sign up for a free account, you can download and upload mind maps, comment on other users’ mind maps, and rate the mind maps you find the most useful.
If your business uses smartphones or tablets as a way to communicate or work on projects, check out the mobile apps available from Mindjet. These apps allow you to create, edit, and view mind maps while you’re on the go or away from your computer. Available for the iPhone, iPad, and Android devices, these mobile apps can be downloaded free of charge directly to your smartphone or tablet.
If you haven’t started using mind mapping in your business, you may be missing out. Mind mapping can be used to create new business ideas, solve complex problems, and brainstorm with other team members — whether you’re in the office or on the go.
As I said at the start we all think and work differently, I enjoy mind mapping, let me know what you think.
What do you do to ensure that the business meet you organized doesn’t fizzle out?
As a top entrepreneur in the lead, you must take the initiative to arrange business meets to connect with others. But that isn’t all; you need to create an event that people enjoy. Not something they dread!
If you create a platform where entrepreneurs share their thoughts, views, opinions and crises. It helps you earn the trust and respect of your fellow entrepreneurs. And it boosts that collegiate feeling. You just need to make it a success. But it is easier said than done.
Let’s take a look at 10 simple but effective things that can help you achieve your goal.
Take Your Time to Plan Every Detail
You cannot wait until the last minute to send out the invites and think everyone will turn up. Decide the time and date, select the venue and inform the business meet group members about it in advance. They have to fit it into their busy schedules too.
Check Every Important Aspect In Advance
How will you feel if the audio doesn’t work when someone’s making a presentation? Reach the venue and double check every detail. Make sure the space is adequate for all and the audio-visual equipment works.
Make It An Exclusive Event
Identify the niche you are in and create a group with a strong focus on the core concept. When you make it an invite-only event, you generate interest about it among the entrepreneurs in the niche to participate. This also encourages the aspirants to be part of the community.
Make Introductions Easy With Name Tags
It isn’t easy to remember the names of hundreds of entrepreneurs at an event. Create name tags. It will make introductions a breeze! You can also add their business name and relevant details to it.
Adhere To Your Goals to Meet Expectations
As an organizer, you need to have a clear idea about what the meet is all about. Make sure this is in keeping with the image of your business. For example, if you are into apps development for educational institutes, educational meets are more suited. Plan the meet according to the purpose.
Organize Topics to Keep Everyone Engaged
What do you want people to talk about? Decide the things you want to interest people in at the meet. Use the topics to initiate conversations. You can also throw in some challenges to keep things in motion.
Offer Exposure for Start-ups
You may also incorporate talks, events, quizzes and such other elements into the business meet. But when you let a start-up offer a demo at the meet, you add to its interest. It supplies food for thought for the entrepreneurs present and gives them an excellent topic of discussion.
Give Conversations a Direction
Don’t let the conversation die down. Place your contacts at opportune points to keep it going. With this simple tactic, you will create an environment where people learn new things without a hitch.
A business meet is all about the relations entrepreneurs create. And the community they build. It is possible to boost entrepreneurial efforts when people have the support of their peers. Don’t just keep it professional. Let entrepreneurs connect with each other on a personal level. Social hangouts can help you with this.
Keep It Confidential
No entrepreneur will open up unless they are sure that their secret’s safe with the attendees. This is possible only when you assure that it remains within the group. Open and frank discussions will be possible only if you do this.
It isn’t difficult if you are aware of how to keep things in motion at the meet.
With a little planning and effort, it is possible to organize a business meet where the group members can share their stories, offer others positive challenges, help others get back on track and create a strong community.
And what do you get out of it? Well, you become the proud organizer of a business meet that isn’t another monotonous hour of long conversations between people who don’t even connect with each other. But something that gives everyone their fair share of exposure in the community and ample food for thought.
A good deal has been written recently regarding the attitude to SME lending by the major banks. On the one hand we have SME owners frustrated by their inability to attract bank funding and on the other we have the banks advertising and talking up their preparedness to fund SME’s.
Why do we have this disconnect of views?
It is clear that since late 2008 and the commencement of the GFC, banks have been more wary of lending. The financial crisis – caused largely by risky lending and banking mismanagement – combined with subsequent higher liquidity and capital requirements have made for a far more risk adverse approach.
However, banks are lending and they are increasingly keen to do so. They are lending less than they used to and looking for tighter security, but the idea that they won’t lend to anyone is simply not true, but you must submit a well-reasoned, structured, quality application.
This myth is not only hurting the banks, but it is hurting SME’s. A problem is that we hear so many negative stories of loan applications dragging out for weeks before amounting to nothing and of bank BDM’s being excited by your application only to have it knocked back by credit that many established businesses with sound bankable propositions are not even applying for funding
Other SME’s will get a rejection from one bank and assume they fall into the ‘do not lend’ category, and give up – whereas in a more positive climate, they might keep trying. This is slowing business growth and therefore the growth of Australia’s economy.
Why is everyone saying that ‘banks aren’t lending to SME’s’?
To answer the question we need to understand the lending process and rationale applied by the banks. Decisions are no longer made by your local manager who in days gone by would have known you, your business and the state of the local economy in which you operate. Lending decisions are now centralised and subject to stringent internal rules, guidelines and matrix ratings.
It is possible in this centralised and semi-automated system of credit approval to fail simple because you can’t “tick” a given box. So let’s look at some of the actions you can take to improve your chances of success:
In tough times banks require a near perfect credit history with no defaults, judgements or slow payments showing on your credit history. The reporting agencies make mistakes and many suppliers make mistakes so it pays to request a copy of your credit file from the main agencies such as Veda or Dunn & Bradstreet and check that it is accurate.
Recently our Credit Manager brought a large monthly trading account application to me for approval, the applicant trades nationally and is at the upper end of the SME definition. On the credit file were two very small sums of money showing as outstanding for over two years to a major utility company. Had I been a computer I would have rejected the application but as a reasoning person I could accept that such small sums were inconsequential against the annual revenues of the applicant. A quick conversation with the applicants CFO satisfied me and the application was approved.
For a relatively modest annual fee the reporting agencies will provide you with email notification of any changes to your credit file and provide a fully detailed up to file each year.
Most banks from time to time place a limit on the amount of funds they will advance into a certain business sector or avoid some sectors all together. In late 2010 we had a client with a strong business case and sound backing who wanted to acquire assets in the wine industry. At that time none of the major banks would lend to any “non existing” wine industry clients. Don’t be afraid to question the banks BDM as to their attitude to your sector and if the BDM doesn’t know ask them to find out.
Business Plans, Budgets & History:
Being able to table a well-constructed funding application supported by a current business plan, detailed budgets including P&L, Balance Sheet and Cash Flow will help enormously and if you have maintained accurate records of plans and performance over the past three years even better.
The plans and records don’t just show how your business has performed and how it may perform in the future they speak volumes about you as a thinker and manager.
It’s relatively easy for you to know how you stand from a profit and cash position on a monthly basis and you may question the time and investment required in maintaining such detail but believe me it will pay you dividends time and again to do so.
Provide information about your management team. This will be a key consideration for any lender. You need to show you have a team that can develop the product, market and sell it, and just as importantly, manage the finances. If you have gaps in your team, try and fill them get one in place before you apply.
Interest Rate Cover & Security:
The banks will calculate how many times cover your current net profit will give to the total amount of interest payable and they will want that cover to be 2.5 – 3.5 times as a minimum. For additional security the banks will look at your stock and debtors and advance funds against that security, again they will be conservative and depending on the age and condition of stock may lend 60% of cost and up to 80% of debtors. The bank will also look to take a charge over the various assets of your business.
As a general policy you should, wherever possible, avoid giving personal guarantees or security over your family home and always seek professional advice before executing any loan documentation.
Amortisation & Exit:
An often over looked point which the banks will be very interested in is how quickly can you repay or amortise the loan and how you plan to do it.
The banks don’t want open ended facilities and they want to know you have more than one option to repay, irrespective of anecdotal reputation banks do not enjoy having to collect on defaults.
Hopefully you will be able to demonstrate an ability to amortise the loan over a reasonable period whilst still leaving sufficient cash flow to cover your interest ratios.
In summary the lending market is constantly changing and hard to keep up with. For this reason it’s often worth engaging one of the companies that specialise in SMS funding as they will have strong relationships with a variety of lenders, understand each banks current requirements and how best to structure and present your application to provide the best prospect of success.