Invest in technology and innovation
There are many ways to grow a business. You can develop national or international markets, acquire other businesses, divest non-profitable areas or outsource non-core functions.
The fastest-growing businesses do all these things. But the one habit that emerges above all others is a focus on technology and innovation.
OECD data indicates that between 30% and 60% of successful SMEs are doing well because of their innovative traits. According to the OECD, these companies realise innovation either by:
- Creating or re-engineering products or services to meet new market demands
- Introducing new organisational approaches to enhance productivity, or
- Developing new techniques to expand sales.
The pursuit of new technology and innovation is present across all sectors, though in some areas (such as manufacturing, agriculture and retail); the need is more acute, driven by fluctuating market conditions and changing consumer habits.
What are the mechanisms businesses employ to drive innovation?
Taking inspiration from other sectors is one of the best ways to drive innovation.
Business leaders’ natural intuition is to view growth through the lens of their markets and products. According to high growth expert and author David Thomson, “Social networks, careers and financial assessments often are confined to an industry or industry group,” he says.
But some of the most successful businesses highlight the value of keeping one eye on wider trends and other industries.
There is also an opportunity to use technology and management practices to continue to drive productivity and create new products. Investing in systems shouldn’t be seen purely as a way to cut costs. Instead, it opens the door to rapidly create and introduce new products and services, thereby fuelling growth.
The opportunities available in technology can take many forms, including investing in IT infrastructure, streamlining processes and systems, or optimising business supply chain structures, customer management or market research.
Cloud accounting and Single Touch Payroll Reporting
One easy change SMEs can make is to leverage cloud accounting. Does your company spend a lot of time on manual data entry and other administrative tasks? If so, a move to cloud accounting will help, saving you time and money, allowing you to identify more areas for growth.
Cloud accounting has modernised how businesses are run. It gives you real-time information on company performance and enables you to make better, more-informed decisions as a result. Particularly when it comes to improving cash flow, cloud accounting is invaluable, allowing you to be paid faster while also streamlining operations.
Cloud accounting is now crucial for complying with the new Single Touch Payroll Reporting (STPR) requirements. All Australian businesses, no matter the size, were required to introduce real-time reporting of payroll, PAYG withholding and superannuation payments to government and associated agencies, by 30 September 2019.
BDO Australia National Chairman, Helen Argiris, has called STPR “the biggest compliance requirement that the ATO has implemented since the introduction of GST.”
All businesses should now have introduced Standard Business Reporting (SBR)-enabled software to comply with PAYG withholding obligations. Switching over to the Cloud will ensure that processes can be fine-tuned and that you comply with ATO rules.
Investing in cloud technology isn’t just something businesses need to do to drive growth, but a crucial means of complying with government regulations.