Three Key Success Metrics Every Small Business Owner Should Focus On

Your small business is up and running, and you have a product or service that you’re excited about. How do you boost your chances of building a venture that will last for the long term? A government statistic shows roughly 40% of Australian businesses fail within the first four years.

Over the years, I’ve identified three elements that seem to be indispensable to small-business success:

A great accountant or bookkeeper

There is sometimes a misconception that all an accountant or bookkeeper does is compliance work and number-crunching. Years ago, that may have been true. But today, they have evolved into business advisors or virtual CFOs.

Technology now gives them total visibility of your financial books in real time. An advisor can point out pitfalls and opportunities along the way that many small businesses might miss, especially newer ones. These advisors help you grow, prosper and build long-term sustainability. Sure, they will also take care of that pesky compliance burden. When you consider that the average Australian small business owner spends 11 hours a week on compliance, that’s no small feat. Less time spent on mundane tasks means you’re freer to concentrate on what’s important, such as growing the business or deepening relationships with your customers.

A strong banking partnership

Cash is king, and nobody has more of it than a bank. A relationship with a financial provider is critical to accessing capital and funding your operations. All small businesses need to be on top of their cash — their incoming and outgoing payments.

Sadly, many ventures go under because they don’t realize they’re insolvent until it’s too late. Today’s technology connects daily bank feeds with your accounting software. That means bank transactions are automatically reconciled with invoices, bills and purchases. This gives you real-time visibility into your financial position. Some bank feeds work two ways, giving your lender insight into your accounting data, if you grant permission. This can be a powerful tool to unlock financing. Some banks will grant business loans of up to $50,000 within one day of applying, without paperwork or collateral. Quick access to capital can make the difference between growth and stagnation, success and failure.

The best technology

Cloud technology has changed the world of small business, offering capabilities that were once the province of large enterprises. That includes mobile point of sale systems, e-commerce storefronts, and real-time tracking of shipments. In fact, this technology is in many cases better than that of big businesses. It’s more flexible, easier to use and is improved more frequently through regular updates. And it allows small businesses to appear big. You can now run your business from anywhere and be digitally connected to your customers, your advisor, your bank, your suppliers, and government agencies. One of the most useful tools available are e-invoices. These e-mailed bills will alert you when a recipient has viewed the invoice, and they can send a friendly reminder to payees before and after the due date. This type of automation frees business owners from the tiresome work of chasing payments. Our own analysis of hundreds of thousands of Australian invoices shows that e-invoices tend to be paid 33% sooner than traditional invoices. And as the old saying goes, time is money.

There’s no substitute for business acumen and a great service or product. But those ingredients alone won’t guarantee a profit. The smartest small businesses will build a sturdy framework that rests on technology, banking relationships and a trusted accountant or bookkeeper. With these three pillars, you’re building for the long run and boosting your odds of success.