Looking Ahead: 4 Key Challenges for SMEs in 2021

There are many advantages to owning your own business, but the path to being a successful entrepreneur is definitely not easy. It takes many ingredients to build the foundations for any thriving company. You have to put in hard work and long hours, and most of all –- keep ahead of your competitors.

Australia is a nation of skilled entrepreneurs, and many people start their own businesses, dreaming of making it big. One of the most recent big hits you might have heard of, is Atlassian.

According to the most recent trend analysis by the Australian Bureau of Statistics, at the end of June 2017 there were around 4.8 million people working for SMEs – 66,000 more than in the previous year.

While this figure points to strong growth, 2021 trends suggest that there are some challenges ahead. So what are the issues that may be keeping small and medium business owners up at night?

Here’s a breakdown of four of the biggest.

CYBER SECURITY

Almost a quarter of Australian SMEs (516,380, to be exact) have experienced a cyber attack or a hacking attempt, according to the 2017 SME cyber security survey, released by Norton last year.

Is it expensive to fall victim to cyber crime?

The report reveals that Australian businesses lose more than $600 million dollars a year due to cyber breaches.

More interesting data from the Norton report:

• It costs a minimum of $4677 for an average SME to free their data from ransomware.
• It may take even as long as 25 hours to get the business back to running smoothly after a cyber attack.

Professor Matthew Warren, Deputy Director of Deakin’s Centre for Cyber Security Research and Innovation, said most Australian business owners are unaware of the risks, and are doing almost nothing to prevent security breaches.

“From hairdressers to builders, accountants to GPs, small businesses are using IT to improve, expand and market their services, and that includes things like booking services, online sales, social media promotion, websites and customer databases.

They’re simply becoming too dependent on IT systems” said Professor Warren.

Are there ways to avoid security risks?

It is important to maintain a safe online presence, as well as to take care of your data protection through a professional backup of any important data.

Fortunately, there are some good regulatory changes happening in Australia to support your company’s security. The introduction of the Australian Government’s Notifiable Data Breaches scheme in 2018, already dubbed ‘Australia’s new cybersecurity rules’, has been a promising initiative. Its main objective is to provide a more secure future for the whole digital economy – as the security of the SMEs data correlates directly to the privacy of the customers they service.

GOING DIGITAL

Due to their size and flexible structure, SMEs represent some of the most innovative Australian companies. They are happy to embrace every opportunity that the digital economy has to offer.

According to the team at Mr Highlights Roofing, it was either a case of getting with the times or getting left behind. “Normally I’d rely on word of mouth and referrals, but in order to keep myself prepared for the long run, I turned to doing a bit of content marketing. Safe to say, it’s worked better than I could have ever imagined!”

SOCIAL MEDIA WAVE

2018 Yellow Social Media Report argues that many small and mid-sized companies find it difficult to handle their social media marketing efforts.

Only 47% of SMEs are actively using social media to reach new customers (compared with 48% in 2017), despite the fact that 79% of their consumers are social media users. But the digital marketing experts say the biggest problem is not how much you spend on your online presence, but what type of content you provide.

“In our consumer report we found that unappealing posts or ads are the biggest contributor to why a consumer would stop following a brand or company” says Erin Williamson, Yellow’s head of marketing.

There was some good news for SMEs in the report too, though. 61 per cent of SMEs with a website admitted that it had improved the effectiveness of their services.

Australian marketing firm Search It Local said that without social media, they would have missed out on so many businesses that they now call clients. “People can have their own take on social media, but without it, people can’t learn about businesses. The amount of eyeballs on those sites each day means that if you’re not on social media, you’re too far behind the 8 ball.”

CUSTOMER SERVICE

According to KPMG’s annual Customer Experience Excellence Report 2018, customer experience is set to overtake price and product as the chief brand differentiator.

Especially with Australia’s rapidly digitising economy, it is crucial for brands to understand that creating a better customer experience is the best way to obtain an edge over rival companies selling similar products or services.

But how do we achieve that?

First of all, you have to offer good-quality products. And then make sure you respond to your customers’ feedback, actively engage with your followers, and regularly work on your e-commerce offering

Good customer service has the highest ROI of any other business activity. Providing the highest quality service is free. All it takes is effort and time. But the word of mouth you can receive from it is definitely worth it. Take care of your existing customers and more will come.

The most successful companies ranked in the KPMG report (for example: Singapore Airlines, Emirates, and Bunnings) performed well courtesy of their customer experience efforts.

They scored well by personalising their services and maintaining their brand’s integrity. They also continually exceeded expectations and embraced empathy in customer relations. This proves that superior customer experience starts with knowing your customers almost as well as knowing yourself.

Feeling a bit overwhelmed? Don’t worry.

All these challenges to SMEs growth are actually your opportunities to keep in-tune with the health of your business and get a step up on your competition.