Four things a small business needs to do now to position themselves for future success - My Small Business

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Martin Seward Vice President, Global Commercial Payments, American Express

Four things a small business needs to do now to position themselves for future success

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In my role, I have the great pleasure and privilege of talking to business leaders and financial decision makers across Australia. I listen to their hopes and ambitions, and, crucially, the role we can play at American Express in helping their organisation grow. Through our considerable experience working with small business owners and CFOs in Australia, we are passionate about seeing them thrive and succeed.

There is only so much time in the day for a small business owner. The clock ticks, yet your in-tray only grows bigger. There is a business to run and the need to ensure you are doing everything possible to ensure its continued success. However, in the day-to-day tumult of managing your organisation, are you laying the strong foundation that will ensure future success for the business? Here are four ways that can help drive your small business towards a growth mindset.

 

1. Separate work and play

In the early stages of operating a small business, it is a good idea to establish a gap between a designated business credit card and your personal one. Primarily, this will make accounting for your small business a lot easier over a long period of time, tracking the various business expenses that become a pre-requisite over the financial year such as travel, training and business equipment.

Additionally, a business credit card can help your small business to build a strong credit history that could benefit your company for many years to come. Many business credit cards enable smoother payment terms with vendors and suppliers, helping to create long lasting relationships that can benefit your small business in the future, in Australia and overseas.

Life as a small business owner is often challenging, especially in regards to monitoring your company’s continued financial health. Through using tools such as business-focused credit cards, the business has an opportunity to reap the rewards of building a separate financial history, and also in time, enjoy points that can be used for business travel to build further networks.

2. The importance of ‘facetime’

There are various costs associated with establishing a successful small business and sometimes business travel can slide to the bottom of the list of priorities. We are living in a digitally-focused world, where meetings can be set up with ease over a computer or a smart phone, but is this the best way to create a meaningful network for your small business?

We have found that many Australian small businesses still need face-to-face dealings to gain a competitive advantage.

For instance, the GBTA Business Traveller Sentiment Index Global Report, in partnership with American Express, reported that Australian small businesses prioritise personal contact with suppliers and customers over online interactions. Almost two-thirds of Australian small business employees (65%) said that the benefit of these more personal professional interactions far outweighed the technological experience.

Small businesses across Australia are now able to broaden their horizons beyond their country’s borders, and can have the confidence to showcase their products successfully on the global stage. Face-to-face meetings that can potentially open up a lucrative vendor partnership become easier. In the early stages of operating your business, do not neglect the benefits of establishing a strong business network that reaches beyond your existing city, adopt a growth mindset.

3. Cash flow management

It is always a good idea to establish an effective cash-flow management system with credit at its core, which helps the business to focus on their aforementioned growth mindset to bring their product to new heights. Credit can always facilitate healthier cash flow and a small business owner can potentially negotiate and leverage early payment discounts with suppliers, which will ultimately create a high level of trust within their existing network. For instance, the American Express Business Explorer Credit Card was designed to give small and medium-sized business greater flexibility in managing their cash flow, and in turn giving them greater rewards on their spending. If a business decides to burn through existing cash reserves while there are numerous credit options available, they could be limiting their growth potential. Additionally, by having extra cash flow reserves through using credit, a small business can potentially open funding for research and development, staff training and hiring new talent which is always a strong bonus.

4. The death knell on cash and cheques

The decline in traditional payment methods of cash and cheques has been frequently reported in the media. According to the Reserve Bank of Australia the number of cheques written in this country declined from around 50 per capita in the mid-1990s to about six cheques per capita in 2015. Is it a good idea to review how you can make your payment methods as a business, to ensure that you are making life for vendors and suppliers as easy as possible.

The aforementioned crucial business relationships that are formed not only in Australia, and abroad need to be nurtured with an effective method of payment, that can be solved quickly and easily with credit.

The world is moving to a digitally focused economy, and adopting a credit focused payment model for your small business is a great way to create a strong platform to harness a growth mindset.

At American Express we are passionate about the future of Australian small businesses and helping to ensure their continued success. We are a nation of small businesses and we are proud of their achievements. Small business is a driving force in our country’s economy, and by following these simple steps, owners can be confident that they are putting themselves in the best possible position for future growth.

 

The American Express Business Explorer Grant in partnership with MySmallBusiness is supported by the American Express Business ExplorerTM Credit Card, which offers small businesses greater rewards and improved financial management of their spending. It can help small business owners get back more from the work they put into their business. The combination of high rewards, competitive interest rate and premium travel and business benefits is suitable for businesses looking to grow or improve how they do business. Visit  American Express BusinessTMExplorer for more information.