taking care of business

TAKING CARE OF

BUSINESSYour practical guide to success

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is a popular one too.

Thousands of Australian businesses rely on their Officeworks Business Account every day.

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THE EASY CHOICEFOR YOUR BUSINESS

taking care of business | 3

is a popular one too.

Thousands of Australian businesses rely on their Officeworks Business Account every day.

With guaranteed lowest prices, 24/7 online shopping and 133 stores nationwide, an Officeworks Business Account

makes running your business a little easier.

Call a Business Representative on 1300 633 423 or visit officeworks.com.au

THE EASY CHOICEFOR YOUR BUSINESS

introduction

A yeAr rich with promise2011 is a year rich with promise for Australian business after the shock of the global financial crisis and the sometimes stuttering recovery from it.

there’s no doubting we dodged the bullet that hit most of the developed world – there’s even an argument that the GFc saved Australia from one of our more usual interest-rate-induced recessions – but a more cautious consumer, the steady withdrawal of government stimulus and the reserve Bank tightening monetary policy still meant a tough 2010 for many smes.

if all goes according to the rBA’s plan, 2011 will see the benefits of big business investment and our record terms of trade start to flow more strongly through the economy. consumers are saving more, but there is an inevitability about continuing employment growth putting more money in more people’s pockets that eventually turns into more spending.

Australia is particularly fortunate to be part of the emerging Asian economy, not the heavily indebted old world of North America and europe. that fundamentally underwrites a large part of our national wealth.

For individual businesses though, the realities of a highly competitive environment are never far away. Australia’s economic growth creates opportunities, it certainly doesn’t guarantee them. the smarter business, the genuine service, the attention to detail and the creative edge are still what make the difference on the frontline.

Taking Care of Business is a practical guide to making the best of 2011’s opportunities, a contribution to the best investment any businessperson can make: increasing their own knowledge and skills. i hope you find it useful and remember that, whatever 2011 brings, you wouldn’t want to be working anywhere else on earth.

michael pascoe

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Taking care of

business

| taking care of business4

contents

your money

your Technology

6 ride the waves Don't let the economy dump you

9 conquer the clutter paperwork is a jungle. Don't get lost

11 control your cash Avoid being profitable and broke

13 going for growth you have to work on your business, not just in it

15 case study taking the next step

17 plan to succeed you must have a picture of where you want to go

20 social media can they work for your business?

22 a mobile future everyone has at least one

24 use them, don't lose them hold onto your customers

26 case study the relationship is everything

28 recruiting the best and brightest hiring good people can bring rich rewards

31 building the team spirit motivating staff is an important challenge

33 case study coaching the winning team

35 clouds with a silver lining software moves to the internet

38 put the web to work the internet is a great tool. Use it well

40 a big call Are Voip phones ready for your business?

42 case study A business model that just clicks

44 green can be gold sustainability doesn't have to be a burden

47 clean through to the bottom line cutting emissions is good for your business – and the planet

50 case study sustainability a matter of course

tAkiNG cAre oFyour cusTomers

The planeT

your people

All sections except your technology written by LEON GETTLER. your technology written by BRad HOwaRTH.

Leon Gettler is a freelance journalist, author and public speaker who writes a regular opinion column for The Age. Brad howarth is a freelance author and journalist who writes on technology, entrepreneurship and marketing for publications including BRW, The Sydney Morning Herald and The Age.

Your feedback is welcome. Email your comments on this publication and its contents to [email protected]


your money

more on the web

www.theage.com.au/small-business/resources www.business.gov.au

Taking care of


Taking care of your money

keeping your company on track in volatile economic times requires focusing on fundamentals

riDe the wAVes: DoN’t Let the ecoNomy DUmp yoU

the economy goes through ups and downs, but your business doesn't have to follow them. the starting point is

to get as close as possible to your customers. make sure the lines of communication are open and those relationships are strong. Don’t give clients a reason to move!

when times are lean, look after the customers who stay with you. chances are they'll be your best buyers in good times. trying to broaden the customer base can be a risk as the customers you attract only because of a special promotion are often the least loyal. they will often be the first to abandon you when a competitor makes a better and cheaper offer. your efforts are better directed toward winning a bigger share of existing customers' business, working on their loyalty and developing deeper relationships.

Deloitte private partner mark Allsop says getting close to customers helps the business owner keep tabs on what’s going on out there. “Do everything you can to over-serve on your delivery to them so they don’t go to another competitor,’’ Allsop says. “we always tell our clients to be mindful of opportunities because there are plenty of competitor firms that could be experiencing trouble and unable to service their clients, particularly in times like this. that could be an opportunity for small business to gain market share.’’

while the big market trends should be monitored, these are more or less the background music. what’s more important are the measures of real economic activity that directly affect the business and are particularly relevant for your company and industry. those might include order rates, inventory turnover and changes in consumer buying patterns.

Another important approach to deal with uncertainty is the tried and true swot (strengths, weaknesses, opportunities, threats) exercise. in volatile times, the ground shifts constantly so this sort of analysis becomes critical.


Volatile times provide companies with the opportunity to think strategically about where the business will be five years out and how they might build for the future. competitors are struggling too and that opens opportunities. By looking at the landscape and talking to customers, opportunities emerge.

one of the often cited examples is Lou Gerstner. when he took over as chief executive officer at iBm,

Gerstner knew he had to take $7 billion out of the company's cost structure in less than two years. he talked to customers. they told him that their key area of complaint was that iBm was too fragmented. Gerstner developed a new strategy where processes were streamlined and the layoffs were targeted to create an integrated model. iBm today is thriving.

Like Gerstner, business owners need to take time to do a swot analysis and, depending on their type of

business, look for new market opportunities. this requires them to realistically assess which ones have the best likelihood of success and how they should capitalise on them.

what resources are you going to need to support a new marketing strategy? will you have to employ more salespeople? will you need extra manufacturing capacity? extra warehousing capacity? most importantly, have you sat down and worked out the implications

for working capital; how you will fund expansion. will it be equity? Debt? cash flow? perhaps a combination of all these options? they will depend on the state of the market. Assessing the ups and downs of the market is therefore a critical part of forward planning.

whatever strategy you adopt, take a conservative approach when calculating working capital projections. in many instances, getting external advice to bounce off your ideas and test your projections is a sensible

option. it’s worth the investment.

For those businesses in manufacturing, product innovation should be a critical part of any planning process. most products have a shelf life, and a strategic planning session is the ideal time to assess where your product is placed in the ups and downs of business cycles.

in a volatile climate, you need to ask whether your market share is under threat. Are new competitors

coming into the market, perhaps even from overseas? Are their products better? Are they cheaper? what is your strategy for competing with a new product? Do you need to develop a different line?

in today’s skills-constrained labour market, the loss of important staff can be a threat to your business. Never take your employees for granted. Do they have career paths? Do you have relevant training programs in place? in times of uncertainty, staff are less

“ getting external advice to bounce off your ideas and test your projections is a sensible option”



six things to manage the ups

and downs

1. get as close as possible to customers. look after the ones who have stayed with you.

2. do a swot (strengths, weaknesses, opportunities, threats) analysis. this allows the company to identify areas that need attention and assess opportunities as they emerge.

3. be conservative on your working capital projections.

4. be strategic. work out where you want the company to be in five years' time.

5. staffing needs to be a priority. attracting the best talent and retaining it is a competitive advantage.

6. watch the cash flow carefully. review costs regularly.

likely to move. But when the market picks up, competitors start offering better packages to entice them away. staff turnover tends to increase when markets recover. every business owner needs to be mindful of this. in volatile times, it is critical to have strategy sessions focusing on staff and what skills might still be needed.

the other important part of managing through the ups and downs is to watch the cash flow. Businesses need to keep their accounts up to date. the simplest way is to have a cash-flow spreadsheet that allows business owners to quickly see how much money is coming in and what payments have to be made. they should use them to see what their cash flows are going to be in the weeks ahead.

owners should also look at preparing regular profit-and-loss statements. these should be updated weekly, or, at the outside, monthly, and within a few days of month end. this gives the business owner time to act on the information.

By adopting this rigorous approach to monitoring cash flows and profit-and-loss statements during volatile times, businesses achieve two ends.

First, it makes them think

more carefully about any spending; discretionary expenditure can be put on hold if the next month’s projected cash flow looks like slowing.

second, it makes businesses more aggressive about collecting cash. it alerts the business to what’s coming in and what is taking too long to arrive. many businesses need to be tougher on cash collection. sometimes it’s even necessary to halt supplies until customers pay.

A regular review of costs is best practice in a volatile environment. At the very least, it should be done monthly but many companies, particularly retailers, have gone to a higher level of scrutiny and are assessing costs weekly.

the review should focus on a diagnosis of the business. what are the main revenue drivers? is it volume? price? can either of these be tweaked to maintain or build margins? what areas of expenditure can be cut or streamlined? And is the business getting the most out of its assets?

Volatility is part of the business landscape. smart businesses will identify it as a time for reflection and build better processes for the good times.


For most small business owners, the paperwork is a jungle where it’s easy to get lost

paperwork, whether it’s for tax, superannuation

or various compliance requirements for employees, enterprise agreements, environment or occupational health and safety, can often be the most challenging aspect of the job for small businesses.

operating a small business is becoming more complex and frustrating. Government regulations and tax laws require far more checks than they did years ago. the tax Act, for example, is now 60 times longer than when it was first introduced in 1937. employment-related regulations and environmental laws are also becoming more complex.

Larger businesses are generally able to take the changes in their stride. they have the staff and resources to deal with the problem. But small businesses, with fewer employees and resources, are finding paperwork problematic and costly. what makes it even more difficult is the fact that small business operators are rarely experts in business, but rather experts in the business that they do. As a result, meeting their regulatory obligations can be a big challenge.

For small business owners, there are two problems with paperwork: finding the time to do it and understanding compliance obligations. the problem for many small business owners is that paperwork can become the dominant feature of running a business, outranking wealth creation, building profits and efforts to become more productive.

so what can be done to make life easier for the conscientious small business operator?

the first point is to understand that compliance with rules and regulations can have a number of positive flow-on effects for businesses, even though the time taken to meet them can seem excessive. therefore, it is important to have a good understanding of the relevant business laws and regulations.

second, it should be easier now because much of it, from paying bills to statements to superannuation, is electronic. still, if you have papers you must keep, you need to have a filing system. how you break it up is up to you. you can classify it according to the companies to which

coNqUer the cLUtter



the bills are paid or you can have particular categories. Anything computer-related goes into the computer folder, anything car-related goes in the car folder and so on. some have a file for all banking activities and another for all administrative activities such as repairs and insurance.

Also, it is a good idea to keep these in one central location. A good filing cupboard or cabinet is one of the better investments you can make, and not usually very expensive.

organisation is also essential.

Good business systems can keep compliance costs to a minimum. Better record keeping reduces the time needed to gather financial information for tax compliance. Good workplace practices also ensure fewer accidents and cuts downtime through staff losses. ensuring equipment and processes are up to standard encourages efficiency as well as ensuring compliance.

how should the systems work?

First, when getting the year's receipts and tax invoices in order, ensure there is a description of the goods or services you sold on the invoice and what was bought on the receipt. that would allow your accountant to determine income for tax purposes and deductibility.

List every asset you use to make your income (for example, a computer you bought for work). make sure to include depreciation

claims you have made on that asset in previous years and have the receipt or contract for each asset and for any costs incurred (such as legal costs, setting-up costs, transport) in getting the asset into a condition and location for use in producing income.

you need to show your accountant any dividend statements you received and any shares you sold, as well as the date the shares were bought and sold.

if you have a rental

property, ensure you collect all the necessary receipts and invoices from that property. Documentation of repairs should fully explain the work carried out, remember this: a repair is immediately deductible but an improvement to the property is depreciated over time.

if you sold an investment property during the financial year, you need to present all relevant contracts for the sale and the purchase, as well as other documents such as

the cost of renovations and other improvements, to your accountant.

paperwork is an inevitable and essential part of running a business. the trick is to make it work for you and to have systems that ensure it runs smoothly and with minimum fuss.

“ a good filing cupboard or cabinet is one of the better investments you can make”


the month. A good forecast model can anticipate problems so you can take action to avoid them.

it can be used to develop assumptions on sales, costs, credit and funding to produce monthly cash flow projections well ahead and assess the impact of cash flow on future sales, costs and credit terms and replacement of assets, such as office equipment.

2. time your invoices invoice more frequently, rather than doing what many small businesses do and leave it to the end of the month.

consider this: if you have $40,000 a week coming in and you don't invoice for it for a couple of weeks, that’s $80,000 less that you have to work with.

the golden rule: invoice as soon as the job is done.

3. take payment up frontDepending on your relationship with your customers, the strength of your business and the particular job, it might pay to collect a good amount up front before the job begins.

some businesses, for example, might settle for 40 per cent of payment up

profit is what the accountants report to you but in small businesses, cash is king

coNtroL yoUr cAsha n accounting profit is

one guide to the health of a business but its cash flow tells the real story. it could be making a profit on paper and still be going broke. if what is being paid out exceeds what's coming in, a business can be in trouble, even if in accounting terms its transactions are profitable.

payment from a sale, for example, might be deferred as a result of giving credit to the customer. At the same time, you have to pay suppliers and staff. you might also have to invest in rebuilding stocks and buying new equipment.

if cash receipts lag cash payments, the business suffers a short-term cash short call.

cash-flow analysis is not like the standard profit and loss table. it takes in many more variables such as accounts payable, receivables, costs, inventory and work in progress.

here's how to keep your cash flow healthy.

1. forecast cash flowthe forecast should tell you who you are paying, when the payments are due, who is paying you and when that’s coming in. the forecast also sets out all your costs for



front and the rest on the work being completed.

4. triage payments this is done frequently in the construction industry where payments are staggered across the process. the first payment comes when stage one is completed, the next when the second is done and so on. this makes cash available for resources needed to complete the work.

5. reward early paymentssome companies offer

incentives for early payments, such as 2.5 per cent off the price. some offer discounts for payment several months in advance.

this brings in cash when you need it, compensating for a lower return on the job.

6. avoid cashmany small business owners carry cash. this is best avoided, as it can slip through the fingers.

As soon as the cash comes in, it’s best to bank it. ensure that all payables are done

electronically. whenever possible, use a business credit card for travel, meals and minor expenses. this leaves more cash in your hands and defers payment.

7. manage your receivables carefully create a schedule of what’s owed and stick to it. call in overdue accounts and make sure you understand the debt recovery procedure. Debt collection agencies can provide a pro forma letter for late payers.

Also, you might consider

adding a late payment fee for the recalcitrant.

8. monitor inventory remember that inventory consumes cash. you have to purchase it before you can sell it and regardless of whether or not you sell it, your vendors will want to be paid.

every dollar you spend on inventory is a dollar less cash.

9. stay on good terms with your bank. if you know you are in for

a short-term cash shortfall, make sure you have a plan and keep the bank in the loop.

10. time your payablesNegotiate terms with suppliers to stretch these out as long as possible. By doing that, you are creating an interest-free line of credit.

At the same time, however, don’t do this at the expense of a solid relationship with suppliers. you need to work with them.

such are the rules for cash flow. they will vary from

business to business but generally, most companies adhere to these or variations of them. cash flow makes the difference between a good and bad business.

“ remember that inventory consumes cash. you have to purchase it before you can sell it”


when you start your business, generally you

will be wearing all the hats. you will be the one setting up supplier relationships, dealing with customer complaints, handling the technology meltdowns, taking and fulfilling customer orders, answering phone calls, and much more.

how long should you continue doing this? the answer depends on your vision of what you want your business to be and how much this requires you to work on the business rather than in it.

For many business owners, there comes a period where they have to make the choice of working on their business – developing staff, vision and strategy – rather than in their business. But how do you make the switch? And can you do both simultaneously?

working in your business means you are constantly putting out fires. A customer can be annoyed, some clients are taking too long to pay and the website just

went down. of course, these are matters that will

require your attention.problems arise when they

take all your attention and stop you from looking at the broader strategic issues, at marketing and building client relationships.

every entrepreneur needs the space at some stage to delegate responsibility, step back and survey the landscape. the problem is there are no hard and fast rules here. much of it will depend on the kind of business you are running and your personnel.

A 1970s study by the University of wisconsin found that companies fall into one of three categories which determine the extent to which the owner can work on the business, rather than in it.

craft firmsthese are companies started up by an entrepreneur who is particularly skilled at a certain craft. it can be a restaurant started up by a talented cook, a pastry shop opened by a great baker or a car repair shop started by a skilled mechanic. these entrepreneurs tend not to be professional managers. they have decided to put their talents to use in business.

the business depends on that individual continuing

there comes a time when you have to work on your business, not just in it

GoiNG For Growth



“ what’s more expensive: paying an administrator or losing sales due to a lack of focus?”

to be personally involved in creating a product or providing a service to customers.

these companies do not grow that much, usually because the owner is happy with the business as it is.

promotion firmsthese companies have very high growth built around a product or service with some

competitive advantage, a niche in the market that they hold. these firms are usually started by typical entrepreneurs who have high growth goals and they have the vision and charisma to get people excited about the business.

however, while many of them are great at starting something up, they do not tend to be that good at managing or delegating.

administrative companiesin the final group, the administrative companies have professional managers who spend their time planning and budgeting, rather than being directly

involved in the day-to-day activities of the business.

these companies are likely to have formal procedures, processes and job descriptions. the big focus here is on product and process improvement. while the craft companies have low growth and the promotion companies have spectacularly high growth, administration companies

are somewhere in the middle, settling for growth that is slow and steady. these companies operate whether the owner is there or not.

the study’s significance is that it tells owners what they need to do if they want to spend more time working on their business rather than in it.

if you set up a craft business but feel you want to work more on the strategy, marketing and vision, you will need to make the transition to an administration type company. that means delegating. the same applies to ambitious entrepreneurs who might want to step back from their

promotion business.if you feel you can’t afford

an administrator but at the same time you don’t want to keep playing nursemaid to your sales people, you will have to make some hard decisions. what’s more expensive: paying an administrator or losing sales due to a lack of focus?

to make the transition, you need to have a clear

plan, a committed team and at least three things: time, systems and money. without them, there will be little chance of making the switch, one that’s essential to developing a vision for the future.


emma faulkner is the classic case of a business owner wearing many hats. She has two podiatry clinics, one in Essendon and the other in Bacchus Marsh. She also offers podiatry services for three retirement villages and one hostel. and she has an 18-month-old daughter.

as a result, Faulkner has now shifted her focus from working in the business to working on it and making sure the name gets out there. She employs seven part-time podiatrists to do treatments while she works on the bigger picture. Each clinic has a practice manager to keep the place running and to coordinate.

“I used to be extremely hands on,’’ Faulkner says. “I did all of it myself and then the practice started to grow and it was getting ridiculously out of control.

“That’s why I started to step back so that I could work on the business

instead of in the business. That allowed me to focus more on advertising, marketing, getting out there, networking and making contacts with other people in the industry.”

For Faulkner, working on the business means networking with doctors, osteopaths, physiotherapists, gym instructors and personal trainers.

“I have also been trying to get out to do some screenings at the local high school and primary school so that I can offer podiatry advice to the students and their parents,’’ she says. “It means we potentially have more patients coming into the clinic if they need further podiatry care for their children’s feet.”

In addition, she works closely with the athlete’s Foot retail chain. all of that takes time, but with the part-time podiatrists

working at her clinics, and with retirement villages and the hostel, it’s the only way to get things done.

“what I have been trying to do is get the name out there as much as possible so if someone has a foot problem, they send them to me,’’ she says. “with anything to do with providing foot care to the community, I have been out there trying to build our reputation and make sure people know who we are and where we are.”

The crucial thing, she says, is to stay relentlessly organised and focused.

“If you’re not organised, you can forget it,’’ she says. “as long as I keep everything tidy and well-organised, I find things reasonably easy.”

case study

For A BUsy poDiAtrist, the time hAs come to work oN the BUsiNess iNsteAD oF iN it

tAkiNG the Next step

faulknerpodiatry

“ if you’re not organised, you can forget it”

Faulkner podiatry is an officeworks Business customer


your customers

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Taking care of


whether you call it a business plan or marketing plan, you must have one: a picture of where you want to go and some steps to get there

the classic marketing plan could run to as much as 200 pages. Forget that. there are several reasons why plans

should not be too long. the first is simple: people won’t read it. Another problem is that these sorts of plans have too many tactics and details, so many that the most important things get lost. the final problem is the most serious: any document that large is hard to change and in a fluid market where new trends emerge and where customers come and go, that can be disastrous.

Good marketing plans need to be clear, concise and convincing. Anyone creating the plan has to be able to sell it and get support for their recommendations. Good plans are also built around rigorous analysis. who are my current customers? who else will buy my product or service? why will they buy it? how many will they buy? what is the size of the market and where is it? is it growing? Are there segments of users who are not happy with the competition? And do any of these segments present an opportunity? it is impossible to create a good plan without understanding customers, the competition and the market. these insights are critical and you can only create a powerful plan if you know the business inside out.

solid marketing plans are built around three foundations: goals and objectives, strategic initiatives and tactics. every plan needs these three sections. ideally, each section should run to no more than one page but can take months to write, and for good reason. Developing the plan is the big challenge in marketing. Deciding what to do and how to do it is hard work. it should make execution straightforward.

goals and objectives this part is critical. A good marketing plan makes things happen and there is no point having vague and unclear goals and objectives. A marketing plan that talks about

sUccess DoesN’t jUst hAppeN: yoU hAVe to pLAN For it


Taking care of your customers

“quality” does not go far enough. is the quality going up or down? what is the company doing about it. innovation? sure, but what kind of innovation? Understanding your customers is well and good but what will you do with those insights?

the marketing plan’s goals and objectives need to drill into these questions and answer them. Also, the goals and objectives need to be linked to profit and cash

flow. in addition, there may be non-financial goals. these can be important, because hitting short-term profit numbers by, for example, reducing sales staff or outlets could damage the brand. the non-financials keep things in check. Another important thing to remember is that there shouldn’t be too many goals and strategic initiatives because that dilutes the plan and diverts attention from stuff that’s important. the best rule is to keep it to three or four to create focus.

As jim kilts, former ceo of

kraft, Gillette and Nabisco, wrote in his book Doing what matters: “i want rigorous analysis and thoughtful assessments, but i don’t want complexity. if strategies and plans aren’t easily understood by everyone, they will be acted on by no one.”

or, as General electric ceo jeff immelt famously observed: “every leader needs to clearly explain the top three things the organisation is working on.

if you can’t, you’re not leading well.”

the marketing plan also needs to be closely tied to the company’s business plan or vision statement. these spell out what the company is about, how it goes about its business and what its goals are. the business plan is more than marketing because it looks at such issues as staffing, financing, strategic alliances and locations. the business plan provides the background for the marketing plan. the two documents need to be closely aligned.

initiativesDetermining the strategic initiatives is the hard part. Are we doing the right thing? have we overlooked anything?

this is why it is important to involve everyone in the marketing plan. your key people will provide insights into potential marketing opportunities. of course, if you are a one-man operation, you will have to do it all yourself. then again, those meetings will be short.

if you don’t involve the sales team, for example, you might not discover that more customers are asking for discounts. if you don’t involve human resources, you might not realise that there are some skills gaps emerging in your organisation as older and experienced hands move on or retire.

if the packaging group isn’t consulted, you will never know that it could take months to print new graphics and logos. your key people provide input into what’s achievable and where

“ if strategies and plans aren’t easily understood by everyone, they will be acted on by no one”


the potential marketing opportunities might lie. A cross-functional team helps identify the initiatives you need to beat your competitors.

Another reason why it’s important to involve the entire team is that it turns the marketing plan into a magnet that pulls employees together. Getting your employees to feel committed to the company means sharing with them your vision of where it is heading. many people do not understand financial projections; their eyes glaze over when they see the numbers. But they do get excited about a marketing plan that shows them how the future will look.

selecting the initiatives is challenging. often, it’s not about what to focus on but about what not to focus on. Learning to say no is critical for developing a good marketing plan. As Apple ceo steve jobs said: “people think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. it means saying no to the 100 other good ideas that there are.

“you have to pick carefully. i’m actually as proud of many of things we haven’t done as the things we have done.”

tactics tactics are about the four ps of marketing: price, product, promotion and place. this section should explain how each initiative will be implemented. if the initiative, for example, is about increasing sales to core profitable customers, the tactics need to spell out the programs that will make it happen.

you need to refer to the marketing plan at least quarterly, but it is even better if you do this monthly. you should track performance as you follow the plan.

the plan should cover one year. things change, people leave, markets evolve, customers come and go. there should be room for adjustment.

this will not detract from those core ideas behind those goals and objectives, strategic initiatives and tactics. yes, market conditions change and as a rule, no plan is foolproof. But if there is no plan, the company cannot move forward and even a slightly inaccurate plan is better than not having one at all. it is better to have the plan than to have no idea where you are going.

vital questions for your

marketing plan

1. who are my current customers?

2. who else will buy my product or service?

3. why will they buy it?

4. how much will they buy?

5. what is the size of the market and where is it?

6. is the market growing?

7. are there segments of users who are not happy with the competition?

8. and do any of these segments present an opportunity?



FAciNG Up to sociAL meDiATwitter, Facebook and the other online meeting places have attracted millions of users. Can you afford to ignore them?

t raditional ways of taking up customers’

time through television commercials, trade show booths and junk mail are becoming less cost-effective. relevant and personal information always works better than junk, which is why social media delivers value.

New ways of spreading ideas, through blogs, consumer fan clubs, permission-based rss information and social media sites such as Facebook and twitter are gaining momentum. For many companies, they are delivering results.

some of the world's leading companies now

have social media policies incorporating Facebook, twitter and Linkedin into their marketing and

business strategies. As well as monitoring what is

said about them online, so they can deal with problems quickly, these strategies create communities that share information and increase innovation. Adidas, for example, joined forces with mtV to create an

exclusive Facebook contest where the winners would be given an all-expenses-paid party. Dell has 20 channels on twitter. other companies using Facebook include calvin klein, Zara, Gatorade, Audi, harley-Davidson, Viacom, Vogue, pringles, cNN and puma.

ernst & young Australia has a Facebook site for its recruits. the firm answers questions from prospective employees, posts videos of people talking about their experiences and gives tips on how to get through interviews. it even allows people from outside the firm to have conversations with people on the inside, to give them an idea of what it’s like to work there.

Law firm Deacons has a few online communities, including twitter, FriendFeed, Flickr, Facebook and Linked-in. it was the first large Australian law firm on twitter. Go to the site and you will find updates on everything from the latest off-the-plan duty concessions to anti-money laundering information. plus dollops of material promoting the firm.


there are some rules. commonsense ideas for policies around twitter would include learning how to articulate the company vision in 140 characters or fewer, without public relations spin, and trying to engage with others including employees, customers and even activists.

the company needs to ask itself several questions. how will the business be promoted? who will be

responsible, senior managers or others? how will the activity be monitored? what are the guidelines? will it extend to private computers and mobile phones?

most companies have not done anything. still, with companies such as coca-cola and Ford leading the charge, we can expect many more will start to move into social media.

By setting up a fan page on Facebook, a company can find all sorts of new ways to engage with customers. try sparking debate, for example, on a hot topic and give your customers a

platform to engage. Update the site with photos, videos and original content. or alternatively, create some incentive for people to go to the site by running contests, having items on sale or giving away free products. Use it to promote special events.

one of the most important features of social media is that it relies on word of mouth, which is cheaper than advertising and more

targeted. word of mouth is treasured by marketers. they know that consumers trust recommendations from friends and family far more than advertising. And they know that turning consumers into advocates for a brand is extremely cost-effective, much more so than advertising or direct mail.

consumers now have more knowledge about what to buy and where the best prices are. they do their research, check with their networks, read blogs and the latest comments and reviews online. in short, customers are no longer relying on

pretty brochures and ads. they are using social media to build up their knowledge and are going to various sites to compare and contrast information and opinions. this fundamentally changes sales relationships.

it also puts pressure on companies to adopt social media. For many small businesses, that can be an unsettling proposition because it puts part of the marketing in the hands

of the customers. it is true that the message could go the wrong way if it is not handled properly. But the benefits can outweigh the risks if these services are used wisely.

the most obvious benefits are increased customer loyalty and engagement. Also, your business will gain exposure not through your own advertisements, but through people who have already been your customers. After all, we are more likely to trust a Facebook update or a blog review from someone we know and trust than from the business itself.

“ consumers trust recommendations from friends and family far more than advertising”



a s phones get smarter, so does marketing.

the mobile phone is set to cover every part of our lives. Because everyone has their own mobile number, the phone will become the equivalent of a thumbprint.

A report from jp morgan says it believes 2010 will have been the inflection point for mobile advertising, as the continued growth of iphones and Android phones has brought the technology into the mainstream.

internet analyst mary meeker writes: “we believe more users will likely connect to the internet via mobile devices than desktop pcs within five years.”

it analyst firm Gartner predicts that will happen within the next two to three years.

these are big calls but the money seems to be moving in this direction. Google acquired Admob, a mobile ad network, for $800 million late in 2009 and last year its rival Apple acquired mobile ad company quattro wireless for $300 million.

this represents a great opportunity for businesses. Using mobile technology, they can move from high-

cost, one-way customer interactions to low-cost interactive experiences.

companies using sms programs, for example, can provide important information about everything from store locations to shipping status to appointment times, either on demand or through automated notifications.

mobile websites can provide self-help services such as FAqs. similarly, companies can use mobile applications (“apps”) to provide high-value experiences such as live chat or intelligent automated response programs about products and services. Apps and mobile web can provide content such as product reviews and can influence purchase decisions for large-ticket items, technology and fashion goods.

companies are also starting to use mobile phone technology for prepaid gifts and vouchers. in Britain, for example, kellogg is running a mobile voucher promotion offering consumers the chance to win money. All the consumer has to do is text a code found on rice krispies squares

the FUtUre is moBiLeeveryone has at least one. the mobile phone is emerging as a platform for companies to build new business


bars. A barcode is then texted to consumers, which they can then exchange for a free bar in stores.

some companies have started rolling out gift vouchers which can be downloaded on a mobile phone. Also, mobile technology may soon allow people to use their phones to store cash in electronic format, similar to how a toll road tag can be loaded with money. mastercard is testing

prepaid sticker tags that can carry cash and be attached to a mobile phone, key fob or watch. say goodbye to loose change.

For the consumer, it becomes a tantalising proposition. mobile phones now have flash memory cards similar to those used to store images in digital cameras, allowing mobile phones to be used for a huge variety of purposes.

in the future, for example, you might keep your medical details on your mobile. this allows you to be identified and automatically interface with your doctor's

system every time you visit the practice.

phones will also be used for payments. you may use one to make small payments such as, for example, a poached egg and coffee for breakfast, your parking fee or a cinema ticket. And instead of queueing for a sports event or concert you would call the ticketing computer and pay for the tickets using your phone. the “tickets” might come

through as an electronic signal, the equivalent of a digital barcode. these would be stored in your phone's memory and read by a sensor as you go through the door to the event.

mobile-phone access to a bank account or credit card system also changes everything. the phone could be used to pay bills, buy flowers for your wife, get information on special deals such as cheap holidays or discount offers from retailers with whom you have registered and buy the goods on the spot.

significantly, mobile

marketing could also have a big impact on consumer loyalty and branding. consumers want content delivered when they need it, and because mobile experiences can be addictive, it becomes a building block for customer loyalty.

customers love it and for many businesses, it’s a handy way of reaching a larger market. For business, the future is mobile.

“ more users will likely connect to the internet via mobile devices than desktop pcs within five years”



marketing 101 tells us that it’s a lot cheaper

to sell new products and services to an existing customer than it is to a new one, where you need to put a lot more work and money into the relationship. customer retention delivers profits. happy customers are more likely to buy additional products and services and refer business your way.

Deteriorating customer service is a massive issue. there are the more than 8000 (and growing) gripe websites, ranging from www.complaintline.com.au and www.notgoodenough.org to those set up by disgruntled customers, ex-employees and activists for the sole purpose of electronically savaging or “flaming” specific corporations

the question is whether service levels have actually deteriorated, or is it more a case that consumers have higher expectations

and easy access to communications? maybe it’s both.

customer service has many components.

these include timeliness,

delivering exactly what was ordered, without hassles – and feedback if there are problems later on. helpful staff is just one area. But ensuring all the components are in place helps the company hold on to its customers

to keep their customers, companies have to realise that the service era is over. Good customer service is important but these days, it’s not enough. even if you have a superior product or deliver on your promises, you need something more to distinguish your business.

it's how you make your customers feel that sets you apart. it's no longer a case of selling products and services. success is more a matter of selling an experience and capturing the customer's heart and mind.

so how do companies go about capturing customers’ hearts and minds? here are six steps.

1. determine the relationship valuetry to classify your customers from the most profitable to the least. marginal

Use them, DoN’t Lose themevery lost customer leaves a hole in your pocket. here’s how to keep them happy


the top 10 ways to lose your customers

1. refuse to help when the customer is not happy with the product or service.

2. ignore customers when it's obvious they need some attention.

3. push customers into buying stuff they don't need.

4. tell them things that aren't true.

5. be rude and talk down to them. do your best to make them feel like idiots.

6. make sure you never have important items on your shelves.

7. have only one or two people serving at peak times.

8. display one price on the item, then charge a higher one.

9. make sure your staff don't know how to do a simple transaction, such as a lay-by.

10. don't return phone calls or emails.

relationships might receive follow-up every quarter, average relationships every month, but the best relationships need weekly attention. A good customer relationship management (crm) system, with details of past customer relationships and service history, enables a company to strengthen bonds with customers and improve its service to them.

2. train staff and have good phone systemsyou need to train staff to be customer-focused and have the authority to take action. your automated phone system needs to be easy for callers to use and you need to keep wait times down. calls should not be transferred through the chain – requests and problems need to be resolved quickly. the aim is to build the value of every relationship with each interaction.

3. heed complaintsNo company likes getting customer complaints but they happen. the way you handle it will determine how likely you are to hold on to the customer. Analyse what caused the complaint and be rigorous and honest. Look for a positive outcome.

misunderstandings, mistakes and problems are not unusual in business so

you need to use all your resources to fix the problem and leave the customer happy and more likely to remain with you.

4. learn from your mistakescustomers will perhaps forgive a mistake made once or twice, but if you wish to keep them, do not repeat them. if you do, that will destroy the relationship. Do whatever it takes to improve.

5. the bit extracustomers appreciate it when you do that bit extra for them. try to make a habit of it. Little things, such as remembering birthdays, anniversaries or any other special needs your customer may have, can make a deep impression. customers love to be noticed.

6. stay organisedcustomers will ask questions. you need to provide them with answers. try to keep material available to answer commonly asked questions. Being available, almost becoming a trusted adviser, helps preserve relationships.

too many businesses focus on expanding market share and finding new clients. they make a sale, then move on. But successful companies look after their customer base and build on it.



consultant Phillip archer has a very clear view about the marketing plan for his HR and recruitment company archway: it’s all about the customer.

Every year, he will update the plan and keep it focused on the customer’s needs. Constantly reworking the marketing plan, he says, is a journey to keep up to date with the constant changes in the industry.

“You have to come at it from where the customers are,’’ archer says. “You can’t do something that you might like but the customers don’t get.

“That’s what your marketing plan has to try to reflect. It’s about collaboration and it’s a constant communication where everybody knows what our offering is and we have to give them something that will relate to their needs and requirements.”

He says incorporating

the changes in the industry into the marketing plan is absolutely critical for the business. “Ten years ago, we relied on different ways of recruiting,’’ he says. “Today, viral marketing is used very much for finding good candidates. You can find them through networks that didn’t exist five years ago.

“You have to give the right message for people to take you seriously. You have to be seen in the game and unless you’re sharp at it, and you reflect what your position is, that makes it very hard.”

archer says much of his company’s marketing comes through its website, www.archwaygroup. com.au.

Like the marketing plan, the website is very much a work in progress. “we are updating it each week with ads and the latest offerings of what we are doing,’’ archer says. “we are now upgrading the

website to make it look sharper and different.”

The other parts of archway’s marketing plan include newsletters that are sent out to clients every quarter, containing the latest information about what’s happening in the market.

In addition to that, his company puts out regular thought leadership pieces and hosts breakfast sessions for up to 50 clients every quarter at plush venues such as Crown Casino and the Langham Hotel. at the sessions all the latest issues, from recruitment to social marketing, are discussed.

“It’s all about relationship building,’’ archer says.

case study

For A recrUitmeNt coNsULtANt, keepiNG Up with chANGes iN the iNDUstry meANs keepiNG his cLieNts hAppy

the reLAtioNship is eVerythiNG

“ you can’t do something that you might like but the customers don’t get”

Archway is an officeworks Business customer

your people

more on the web

www.theage.com.au/small-business/managing/people www.business.gov.au/Businesstopics/employingpeople

Taking care of


Taking care of your people

economic ups and downs and patchy recoveries can provide small businesses with rare opportunities to

recruit the best brains in the market. still, recruitment and management specialists say they need to tread carefully. Finding the best and brightest in uncertain markets leaves a number of difficult but important questions.

how do you identify, recruit and retain talent? how do you do it when you might be laying off staff in other less profitable areas of the business? where do you find talent? placing ads or word of mouth? or is it best done through networks? how do you groom recruits? what incentives should you offer to keep them? And how do you manage their integration into the company if the rest of staff is shell-shocked from cost cuts and redundancies?

to recruit effectively, companies need to look at their strategies. they then need to stress-test them against the current conditions and identify where they want to be when the recovery really takes off. By doing this, they will be able to assess how the recruit will help the business and how the recruit will fit in with the business strategy.

that gives business owners the opportunity to identify their competitive strengths and examine ways of improving their firepower. this helps them identify and analyse skills the company needs when the market bounces back.

Before companies even start hiring the best and brightest, they need to examine the skills they require to carve out or strengthen their market and beat their competition.

some companies will look to a special type of recruit. they want people who can think outside the box, who are one step ahead of the competition, who know how to package themselves and their products and who are flexible in how they make decisions. they are different from the kind of sales, pre-sales and service delivery person or project manager who, in a boom market, sits by the phone waiting for the

recrUitiNG the Best AND BriGhtest NeeDs A cAreFUL ApproAch hiring good people can reap rich rewards, but make sure you know what you want


customers and projects to come in. these types of recruits are proactive. they are prepared for knockbacks and they are more competitive.

even in bad times, finding people like that is not easy. the reality of a jobs shakeout is that those who are not performing well lose their jobs and the best performers are kept on. it’s not like picking low-hanging fruit.

companies still need still to put in a lot of diligence and

energy to select the right person to make sure they suit the business. this means they need to act strategically. it’s just as easy to make a wrong decision as it is to make a right one.

Again, this means looking at the business model, identifying how it is different from competitors.

And a due diligence process means checking every part of the potential recruit’s background and asking the right questions in the interview to match the job being offered. there’s one golden rule: past

performance points to future performance.

For example, if a company is looking for a salesman working in a high-risk environment, they need to ask about how the candidate works to a deadline. when was the last time they did it? what did they do to meet it? was the risk worthwhile?

Unless the business is just looking for someone who can fill in for the next six months, the employer needs

to look at someone who can fit into the business in two to four years' time.

where to find talent? there are four different markets.

First, there is the active market of online jobs boards with offerings such as seek, mycareer and careerone.

then there are networks of contacts and colleagues. this can include everything from local chambers of commerce to guilds and associations.

Alternatively, there are the social networks such as Linkedin, Facebook and twitter. Linkedin is a

network of experienced professionals from around the world, boasting 170 industries and 200 countries. Facebook is the largest of the social networking sites. it has more than 400 million users. Facebook aims to connect people with friends and others who work, study and live around them. it also looks to connect friends, family and business associates. the Facebook empire has now expanded to include connections to

organisations, businesses and interests. twitter, a microblogging social network, can help connect individuals to businesses.

on Linkedin, companies can pay about $200 to post a job for 30 days. or they can buy job credits and pay less per job posting. Alternatively, they can sign up for Linkedin talent Advantage which is used by recruiters. if they don't have the money to pay for job postings or join the talent Advantage, they can still find free resources on Linkedin. with Facebook, companies

“ companies still need still to put in a lot of diligence and energy to select the right person”



can use the Facebook Directory to search for users, pages, groups and applications. Alternatively, they can post jobs for free in Facebook marketplace or pay for a Facebook ad.

A third option is staff referrals. employees usually have their ears to the ground. An advantage with staff referrals is that it is easier to integrate the person into the organisation when they have been nominated by staff. Another advantage is

that employees know what’s required and know all about the working environment. they are the best placed to know whether the person they are recommending will fit in. Also, they are more likely to look after that person and help them adjust to the new working environment.

the final, most difficult but potentially most rewarding market is where companies go out head-hunting and poach from competitors.

there are two advantages with this approach. the first is you get someone

who would be great for the organisation. second, it places competitors at a disadvantage. your disadvantage is that it means paying extra. with sales people and operational people, the question needs to be asked whether the new recruit will be worth their salary many times over.

rewarding and grooming is another key issue and needs to be handled with finesse. there are two ways

of grooming and rewarding star recruits: money and career opportunities.

high-flying recruits tend to be more self-motivated and self-driven. this means that the company needs to keep them motivated by offering them stimulating career opportunities. Good sales people are likely to be motivated by money. if they can see the potential for developing larger accounts and better reward systems, this will be their key motivation.

the final challenge is integrating the recruit into

the organisation at a time when the company is trying to keep costs down. there are many companies that have recruited at a time when they are putting off staff. how to best to handle this?

management specialists say there's only one thing you can do in these circumstances: be open and honest. As a rule, people deal better with tragedy than they do with uncertainty. if people are

unclear about what is ahead, they will lose focus and are more likely to leave the organisation.

specialists also say that when bringing in the recruit, the focus needs to be on the position, not the individual. managers should emphasise what the new position will do for the organisation. that, in itself, is what recruitment is all about.

“ when bringing in the recruit, the focus needs to be on the position, not the individual”


according to traditional management literature,

it's important for companies to have some sort of employee engagement where people feel valued, where they wake up every morning wanting to get to work and make a difference. the idea is that if you do that, the employees will go beyond the call of duty to help customers and become passionate advocates of the business. that's the theory.

the economic downturn changed that. people were losing jobs and many managers did not have the time any more. while the economy is in better shape, the cost-cutting and lack of attention over the past two years will have major ramifications for employees and companies.

in the past, many initiatives aimed at engaging employees were launched when growth, profits

and employment were booming. that arguably made it relatively easy for bosses to develop the kinds of things that delight staff. these included generous benefits and perks, extensive training and development programs.

companies also provided big bonuses for beating targets. Until the global downturn. even with the recovery, many companies are moving cautiously. that should set the alarm bells ringing in board rooms because there is evidence suggesting that companies with more engaged and highly-motivated employees tend to outperform their peers.

traditionally, many companies felt that the best way to motivate employees was by paying them outsized salaries. how wrong they were. the global financial crisis was a stark reminder about the dangers of motivating employees with bucket-loads of cash. instead, they should have focused on helping employees find joy and pleasure in the work itself. that can mean giving workers more autonomy so that they can choose what they do and with whom they would like to work. it allows them to foster a desire for constant improvement.

so what should managers do? what are the better companies doing to keep their employees motivated?

the best companies focus

BUiLDiNG the teAm spiritmotivating staff is one of the most important challenges for managers. it is often also one of the most difficult



on communication. this is critical. communication is the key to making members of a company's team feel that their voices matter. employees are always more motivated when they feel needed, appreciated and valued. this means being as open and as transparent as possible.

Another way is to develop a start-up culture. this can be done by creating projects and setting workers loose on them. these projects

can range from redesigning systems to cleaning up the warehouse. it is one way to keep employees motivated and finding surprising new ways of looking at old problems.

the world’s most famous entrepreneur, richard Branson, is a project fiend. wherever he goes, he takes notebooks in which he records his ideas for projects just waiting to happen.

keeping up staff morale is also important. companies can use all sort of strategies for this. many, for example, provide free food, play

around with the dress code (casual Fridays, ugly tie day) or hold meetings outside the office, in the coffee shop down the street or at a local restaurant.

maintaining or even increasing productivity is essential. many companies started to do this during the downturn by introducing four-day weeks and nine-day fortnights. many more are looking at increasing flexibility by introducing systems that allow

employees to work from home. telecommuting will very much be a fixture of the future workplace.

For employers, maintaining your own morale is absolutely essential. it can be infectious and improve staff morale. All business leaders say the way to stay upbeat is self-belief and surrounding yourself with people who are good sounding-boards. self-belief also comes from looking carefully at your strategy, reviewing it and ensuring it still works. if things are changing, then the objective or output of that strategy

needs to be altered or put to one side or readdressed. this provides a level of certainty and helps the employer confirm to everyone that he or she is in the driver’s seat.

smart companies should also look at their decision-making processes and ask whether they need to speed things up and whether senior managers should talk to their direct reports more often. Again, that comes back to communication.

it is just as essential for

companies to strike the right balance between keeping their best staff and managing their payroll costs.

setting a good example to the rest of the staff by showing that you are working just as hard as them, that you are all in this together, is as important in a boom market as it is in a downturn.

motivating staff is one of the most prized of management tools. the best companies that know how to do it well always seem to thrive.

“ communication is the key to making members of a company’s team feel that their voices matter”


lee gilmour’s 24-hour gym and indoor sports centre has only been going for two years but he has very clear ideas about how to keep his 20 staff members, both full-time and part-time, motivated and on the ball. The most important part, he says, is to have complete and open communication with all of them.

“we meet regularly as a team and we make sure they are getting their word in,’’ Gilmour says. “we meet on an individual basis and on a team basis. we try to meet with individual staff once a week and as a whole, we meet once a month.

“we try to keep these meetings to an hour and we get through the good things and some of the bad things when they happen from a management perspective. we set out what needs to be done and we talk about our vision.

“Because we are a new business, they are at the forefront and they get the feedback from customers. we encourage them to put that back to us and then we implement changes around that.”

another technique he employs is to send all his staff, including part-timers, away for extra training. It’s not only good for his business, it’s also important for their careers. More to the point, it makes them feel valued.

“I enrol them in courses. It’s important for them to have certificates in fitness,’’ he says. “a lot of the other gyms don’t make it compulsory but I tend to enrol them as soon as they start and get them some certification for their future. They always see it as a positive.

“Even if they don’t stay here, they will walk away with some qualification.”

Gilmour also ensures that his employees are

constantly given extra tasks. It breaks up the monotony of day-to-day routines and gives them a real sense of achievement.

“we might. for example, run a special event like a boot camp and get one of our staff members to take it on board and manage. They get in, work extra hours and get some sense of achievement through the customer achieving a goal.

“Or it can be cleaning or rearranging equipment, something outside their normal job role week in and week out.

“It keeps them motivated and the more the better. we have found.”

case study

For A sports ceNtre operAtor, whAt’s GooD For his stAFF’s cAreers is ALso GooD For his BUsiNess

coAchiNG the wiNNiNG teAm

“we meet regularly as a team and we make sure they are getting their word in”

Fitness Arena is an officeworks Business customer

your technology

more on the web

www.theage.com.au/technology www.theage.com.au/small-business/technology

Taking care of


making the wrong choice when purchasing software can lead to a nightmare that haunts you every working day.

even after deciding on the categories of applications that you need, you must then navigate through a sea of choices.

it can take a week or two using a software package to figure out if it really is right for you. many applications might boast appealing features that in practice are too complicated for your needs. Alternatively, they might be simple to use, but lack functionality or support.

Deciding on the right package has been complicated further by the arrival of cloud computing. rather than buying a packaged application that you run on your pc, cloud computing sees the application hosted on the internet, and you use it and access your data through a web browser.

thankfully, there are several shortcuts through the software selection maze.

According to julian smith, general manager at the accounting software maker myoB, hunting around online can turn up free trial versions of many software packages. he also recommends your accountant or bookkeeper as one of your best sources of advice.

Accounting software itself is one of the most important purchases that business will make, with packages available from quicken, myoB and others. smith says it is important to scope out what you actually need before buying anything.

“if your business sells time, such as a hairdresser or professional consultant, your solution might be simple,” smith says. “if you have staff, or are planning on employing some, then it is important that your software has payroll functionality. if you are selling products, or products and time, you need a more complex product that also handles inventory.”

myoB’s product line starts with myoB justinvoices for basic invoicing needs. myoB BusinessBasics is its entry-level

wiND oF chANGe BriNGs cLoUDs with A siLVer LiNiNGchoosing the right software for your business can be a headache, but new developments promise to ease the pain, writes Brad Howarth


Taking care of your technology

product, while Accountright plus adds functionality such as payroll management.

on a day-to-day basis, however, it is your office productivity software that you will rely on the most. Again, numerous options are available, but the leader of the pack is microsoft’s office suite, which has recently gone through its latest revamp with the release of office 2010.

the director of microsoft Australia’s information

worker Business, oscar trimboli, says the release integrates significant web-based functionality.“it’s the ability to share information across the web, so that a small business can collaborate with a customer or a supplier on the same document, whereas in the past they would have needed to email that around,” trimboli says.

examples include working with an accountant on a spreadsheet simultaneously from separate offices, or broadcasting a powerpoint presentation to a potential

customer over the web, while talking through the slides over the phone.

web-based tools and applications are also having a big impact on small business thanks to cloud computing. these applications are usually rented on a monthly basis. Apart from the elimination of large upfront licence fees, cloud applications never need to be patched or upgraded, as this is handled by the software host. so too

are data backups.you can also access your

data anywhere you can get an internet connection, and no longer need to worry about having someone at hand for support. conversely, however, the software becomes unavailable should your internet connection drop out, and there may be no one to talk to should you have other problems.

According to the research vice-president at industry analyst firm Gartner, michele caminos, the relative newness of cloud computing

means that many small businesses will be wary. “if you look at small businesses, they simply don’t have the time to implement the latest technology that might have glitches,” caminos says. “But a lot of these cloud services have been around eight or nine years, and they do have a strong value proposition with strong security and reliability.”

caminos says it is definitely a model that small businesses need to consider.

“the beauty of sAAs (software as a service) is that it takes the requirement of management of the application out of the hands of the business and gives it to a service provider, and lets the business go back to what it does best, which is generating revenue.”

But it is the question of support that smith says is one of the primary benefits of packaged software from companies such as myoB. “choosing a product that can be supported by their accountant or bookkeeper is really important,” smith

“ choosing a product that can be supported by their accountant or bookkeeper is really important”


says. “it is almost inevitable that they will want someone to come in to their business to give them a hand with something.”

he says that maintaining a reliable internet connection is critical, as even sub-second delays when performing data entry can be frustrating.

one of the best-known cloud services is salesforce.com, a customer and sales staff management tool that has been available since 2000. Numerous local cloud software suppliers have sprung up, including sydney-based accounting package saasu.com and New Zealand’s xero.

the chief executive of xero, rod Drury, says that using a cloud product can deliver access to a community of other users online. it is more likely that problems will be fixed quickly, as a problem that affects one user is likely to affect many, and they can quickly communicate among themselves.

“the good thing about being online is that with blogs and twitter there are lots of people who have tried these solutions before, and you can get the feel of other people’s experience,” he says.

xero is also one of a bunch of cloud services available

through telstra’s t-suite online service. “the companies that are on t-suite have gone through the wringer, because telstra is not going to risk its reputation,” Drury says. “And they bring financial strength and strong support.”

t-suite also includes versions of microsoft applications, including its exchange email service and sharepoint collaboration software, as part of a service that the company calls Business productivity online services (Bpos).

“these are systems that historically have only been available to large companies with large it budgets,” says microsoft’s industry market development manager for the communications sector, steve johns. “the premise of the internet has always been a levelling of the playing field, and this enables a small business to get all of these solutions in a simple per head, per month basis.

“they can get enterprise-grade software without writing an upfront cheque and implementing it on a server. it enables more than what a lot of them currently do, and based on our stats on how small businesses are operating, this is not only cheaper, but it’s better.”

software tips:how to make it a tool not a trap

1. the most important purchase is accounting software such as quicken and myob.

2. your website is your shop front; make sure it does everything possible to drive business your way.

3. sites need to be not only appealing but easy for search engines to find.

4. be very clear about the goals for your websites, regardless of the size of the business.

5. keep content fresh by having a blog, a twitter account and a facebook page.

6. internet phones are on the rise – check whether they will suit your needs.

7. the big issue is ensuring quality of the connection over the internet.



pUt the weB to workthe internet is a great opportunity to expand your business – if you use it well

your website is your shop front in the electronic

world, so you need it to do the most it can to drive business your way. But the web is littered with sites that are poorly maintained, difficult to navigate and do nothing to make money for their owners.

there is a lot to think about. sites must not only be appealing, with information that customers need, they must be easy to find for search engines too. they should make it simple to contact you, and offer payment options that are secure and easy to use.

According to james Breeze, chief executive officer at usability specialist objective Digital, one of the most overlooked aspects of websites is how people actually use them.

“the key for websites for small businesses is not to try

anything funky,” Breeze says. “you can still have a nice design, but keep

the structures of the pages relatively simple.”some basic tips include

ensuring that the link to your homepage is at the top left of each page, and the search box is at the top right. people tend to read

websites in an F-shaped pattern, meaning headline information also needs to be near the top left, and main content at the middle left. menu categories should be specific to the items that they link to.

contact information must be prominent but avoid posting an email address, as it may be harvested by spammers. Use a contact form instead.

it is also important not to overload a page with graphics, and pDF files, such as product catalogues, must be small and designed for a website, rather than being a large print-ready version. it is also important to ensure that your website is formatted so that it can be easily viewed on mobile devices.

creating a website today is relatively cheap and easy. tools such as wordpress, joomla and Drupal give hefty functionality to amateur users, but these template-based systems can be deceptively complex for novice users. you can also buy a pre-built website from sites such as Flippa.com, or hire a professional.

According to Zoe warne, co-owner of the web development agency


August, you must be clear in your goals for your website regardless of the size of your business. “Do you want your site to generate inquiries, drive sales or refer business to a network?” she says.

warne also stresses that content must be kept fresh with the latest news about your products or customers. “you should look at refreshing content at least every few days, because if visitors see a site that was last updated in 2002, they will

tend to think the company is not abreast of latest trends.”

the owner of public relations agency cp communications, catriona pollard, says one of the best ways of keeping content fresh on your site is to write a blog. A twitter account and Facebook page can be used to promote each blog post and draw traffic back to your site.

“you can update a blog very easily,” pollard says. “that means you are providing updated information to people who will keep coming back. i

might write a blog post and post its headline to twitter. every time i’ve done that i get a massive spike in traffic of people who have gone to read it on my website. once they are there they might look at what else i offer.”

But having the best site is meaningless if no one can find it. with Google and other search engines you are competing with the rest of the world, so it is important that your site ranks well. there are two

options – optimise your site’s content to be more readily discoverable (known as search engine optimisation) and buying keywords on search engines that bring up your site when they are typed in (called search engine marketing).

once you have got people to your website, there is a good chance that you will want sell them something. But more than half of all online transactions are abandoned before completion, often because the forms that the buyer is asked to fill out are too hard.

the founder of online Banking review, charis palmer, says that taking payments online also requires both an online merchant facility and a relationship with a payment gateway service provider.

“you need a merchant facility, so you need a relationship with a bank, and if your business has not been established for long that is not an easy task and you have to jump through a few hoops,” palmer says.

“And setting up a gateway is not simple.”

Ultimately Breeze says the best way to know if you are getting the most out of your website is to test it with people who will give you honest feedback – employees, friends and family, or professional organisations such as his own. “And do that before it goes live, otherwise it is very expensive to change,” Breeze says.

“ content must be kept fresh with the latest news about your products or customers”



anyone who has made a phone call using skype

will realise how easy it is to talk to people over the internet. But while skype is great for calling friends and loved ones overseas, is the internet up to the challenge of handling the telephony needs of a business?

the past decade has seen the emergence of a plethora of internet-based telephony services (also called Voice-over-ip, or Voip) all claiming to be ready for business customers, such as myNetFone, gotalk Australia and Freshtel.

chief among them, however, remains skype. the company now claims more than 500 million registered

users and is adding 400,000 more each day. it carried 12 per cent of the world’s international calling minutes in the last three months of 2009.

skype’s vice-president and general manager

for Asia pacific, Dan Neary, says 35 per cent of skype’s users are using it for business. the company has launched several business tools, including Business manager,

which lets employees pool skype credit rather than having separate accounts, and provides ability to reserve local phone numbers in different countries. A new service will integrate skype directly into many office pABx systems.

But the big issue for skype and other providers is ensuring the quality of the connection over the internet. Neary contends that a skype-to-skype call across the public internet is better quality than a regular phone call, with new technology halving its bandwidth requirements from a couple of years ago.

But is the internet as reliable as the regular phone network? the senior product marketing specialist for converged ip solutions at telstra Business, Dave mcGowran, says businesses need to think hard about whether the quality and reliability of their experience on the internet is good enough for their business.

“For small businesses, despite the fact that there are a lot businesses out there offering ip telephony,

iNterNet phoNes: A BiG cALLthey promise more functionality and lower costs, but are Voip phones ready for your business?


generally it is still not cost-effective for them to move away, because the pstN and isDN systems are bulletproof and they get reliable quality voice,” mcGowran says.

the quality issue can be partly addressed by ensuring that voice calls have priority on the office network as well.

the chief technical officer at Australian

network equipment maker Netcomm, Brett stevens, says it is important to buy equipment with built-in quality-of-service management to prioritise voice traffic.

“otherwise, if you are trying to send an email or watch video at the same time as you are making the call, the quality of call will be diabolical,” stevens says.

quality-of-service is a high priority for ip telephony service providers also. the technical director at myNetFone, rene sugo, recommends that businesses purchase a separate broadband connection for their voice traffic.

once the quality issue is settled, sugo says business users should have no qualms about moving their voice calls on to the internet.

“it’s no less reliable in a statistical sense, which is hard for people to understand because they think that it is new and their isp might go down,” sugo says. “there is really very little difference between us and a

traditional service, because the points of failure are the same.”

with many services you may need to purchase a new internet telephony handset. According to stevens there are several features that you should look for.

“you want to make sure that whatever you’ve got has got a telephone port that you can also use with a standard analogue telephone service, and supports the Australian standards for telecommunication,” stephens says. “And if the service you are using has voicemail, you want to know

that the phone is able to access that.”

stephens says it is important to make sure that the handset you buy supports the particular software protocols your service provider uses to encode and decide the voice signal, and can re-register with the network should it drop out for any reason.

“ the big issue for providers is ensuring the quality of the connection over the internet”



digital agency atomic Media has embraced cloud computing and the change has revolutionised its business model.

Capital expenditure on IT has always been expensive, requiring investment in the research, purchase and hardware on which to host the applications.

The world has moved to a SaaS (Software as a Service) model where the application is in effect “rented”, with the hardware which hosts and runs the application being provided as a service rather than a product.

The effect on a business such as atomic Media, a provider of e-commerce and e-marketing solutions, has been profound. Studio management software is hosted on servers in the US, collaboration in the UK and development servers locally.

atomic Media general manager andrew

Cannington says it makes business sense. “as technology advanced, it became far too expensive for both atomic Media and our clients to develop bespoke applications,” he says. “we partner with specialists in these areas, and introduce best-of-breed technologies to our clients at a fraction of the cost.

“It works better for the software provider because they have ongoing revenue streams, it works better from a business perspective as you do not need the hardware and the people to administer it. Finally, it is an operational expense rather than capital expenditure, providing significant accounting advantages.”

This fits perfectly with atomic Media’s business.

“we want to ensure that our staff spend as much time as possible working collaboratively with our clients, so they should not

be shackled to their desks.“Many of our staff are

constantly in clients’ offices or in transit interstate. we are now in a position where they can get access to their time sheeting and their project management software anywhere in the world.”

atomic Media also makes sure it provides its staff with the latest in technology equipment. The people in its creative department are on Macs,

its project management team members are on PCs and sales people have tablet computers.

“Technology is now cheap and accessible, and largely interoperable, so we choose the right technology for the right job.”

case study

A DiGitAL AGeNcy hAs chANGeD to cLoUD compUtiNG AND reVoLUtioNiseD its BUsiNess

A BUsiNess moDeL thAt jUst cLicks

“ they just click on a laptop at an airport and they have access”

Atomic media is an officeworks Business customer

the planet

more on the web

www.environment.gov.au/sustainability/industry www.climatechange.gov.au/what-you-can-do/business.aspx

Taking care of


Taking care of the planet

the survival rate of small businesses is small. the number of them that survive and thrive, that go on to success and

long-term sustainability, is even smaller. if businesses are not concerned about sustainability, they

should be. A focus on environmental sustainability forces the business to look at the long term, where the focus is on the enterprise, not the entrepreneur, and the owner is looking at the long-term development of the enterprise, not short-term rewards. in other words, small and medium-sized businesses (smes) focusing on environmental sustainability have a strategic mindset which views changes in the business environment, including sustainability issues, as an opportunity. Unfortunately, there are many more that see these tasks as an additional burden rather than a source of potential advantage.

the bottom line is that not being green is bad for business. Nowadays it's not just a matter of having a social conscience or wanting to save the planet. there is a strong business case for having an environment-friendly operation due to looming climate laws and volatile energy prices. sustainability also creates business opportunities.

on the one hand, smes have a great advantage over large businesses – they are fast and nimble and better equipped to respond quickly to changes in the business environment. on the other hand, their big disadvantage is that they lack the information in the marketplace that shows them how sustainability is an opportunity to innovate and to engage their employees.

the impact of smes on the environment should not be underestimated. According to the latest statistics, smes make up 99.4 per cent of all Australian businesses and account for about 60 per cent of the national economy. A British study found that 43 per cent of the nation’s wealth derived from smes but up to 60 per cent of the nation’s commercial waste

iN the LoNG term, GoiNG GreeN cAN Be A GoLDeN opportUNitysustainability should be seen as an opportunity to cut costs and grow business, not as just another burden


was produced by this sector.so why aren’t more small

businesses leading the charge on sustainability? A study undertaken by the National centre for sustainability at swinburne, sponsored by telstra subsidiary sensis, found that many smes did not understand environmental laws and could not see any scope for cost reduction and did not see it as essential for business survival. As a result, they were ignoring opportunities and leaving

themselves wide open to regulatory issues and possibly even litigation.

the study also found they had few staff with expertise and did not have the resources or time to invest in sustainability.

Being a green laggard can hurt business. cutting back on energy consumption can actually save the company lots of money. secondly, it can help a company raise capital because investors are more likely to put their money into businesses that

have integrated climate risk and sustainability into their strategy. Being a green business also facilitates more innovation. it forces people to become more creative and it can generate ideas that can end up making the company money.

there are several keys to running a green business. Number one is recognising that energy prices are going to go up because of demand for fuel from developing economies such as china and india. that will

force companies to become more energy-efficient. companies will have to put in place corporate-wide energy efficiency targets.

Also in these times, companies will have to look at cheap ways of meeting sustainability goals, getting their entire workforce involved and coming up with new ideas to meet those targets.

tremendous social pressures are now emerging. An increasing number of customers are demanding that businesses show their

green credentials and be more environmentally conscious. companies that are considered more green than others in their sector have a competitive advantage over their rivals.

indeed, research shows the majority of Australians consider the environment when making buying decisions. the research, undertaken by furniture retail giant ikeA Group, shows that three-quarters of Australians are likely to be influenced by a company's social and

environmental practices when shopping. women in particular are calling for organisations to take steps to help protect the environment. According to the research, 82 per cent of women and 68 per cent of men indicated that it is either extremely or very important for companies to protect the environment.

For smes, this piece of research is important because for most families, the woman is the chief purchasing officer. All the important decisions, such as

“ cutting back on energy consumption can actually save the company lots of money”


Taking care of the planet

schools, holidays, electronic goods, home improvements and cars, are made by women. By ignoring environmental issues, companies are missing out.

Apart from environmental benefits, there are immediate pluses for any business willing to make small changes that embrace sustainability. with fresh air and natural light, staff members feel more efficient and effective and are also less likely to take days off sick. And in an age when environmental responsibility is becoming highly regarded, having an edge environmentally makes it easier for businesses to attract and retain staff. energy and water bills can also be cut.

All that is in addition to the growing number of customers who are likely to choose your product or service over another if they know your business is making an effort to do the right thing.

A growing number of small businesses are now moving into this space with the emergence of the eco-preneur. these are the entrepreneurs who build a business around ecology and the environment, the carbon capitalist who sees climate change and the environment as a business opportunity.

the most successful eco-preneur would have to be Al Gore. the former Us Vice-president turned eco-warrior is making millions from venture capital funds and other companies focused on bio-fuels, sustainable fish farming, electric vehicles and solar power. Gore is likely to become the world’s first carbon billionaire.

But there are ordinary people too. these are the consultants and small business owners helping other businesses become more sustainable, or selling sustainability products and services. they include the small businesses that restore degraded land, clean the air, build healthy and safe homes, devise clean, renewable energy sources, offer prevention-oriented alternatives or help preserve and restore the ecological and cultural wonders of the planet by changing the way we experience travel. these are just some of the new business models now emerging.

smes cannot afford to ignore green issues. it’s not just about saving the planet. it’s more to do with seizing opportunities, creating profitable niches and building a strong customer base. that creates a business that is truly sustainable, in every sense of the word.

why going green makes good

business sense

1. being a green laggard is bad for business with looming climate laws and volatile energy prices.

2. cutting back on energy saves companies money. it also encourages more innovation.

3. rising energy costs will force more companies to become more energy efficient.

4. more customers are demanding that businesses show their green credentials.

5. businesses making small changes for sustainability also help staff. workers feel more efficient and are less likely to take days off sick. a green office is also a good way of attracting quality staff.


cutting emissions in an office might have some

costs. But these have to be weighed up against the costs of not doing anything. Failing to monitor energy consumption and reduce emissions can have a bottom-line impact. it’s not just about saving the planet.

it has been estimated that basic efficiency improvements could cut national emissions and save businesses more than $700 million. so how should a small business do it?

An increasing number of companies are getting an environmental health check and measuring their carbon footprint. some bring in consultants to do it, but many are discovering they can manage it themselves by using one of the many

carbon calculators readily available. there is also software that provides computer users with feedback on the amount of energy, dollars and greenhouse emissions

that has been saved when they use computers.

it is important to involve staff. No plan, no matter

how well thought out and formulated, will work without staff support. Ask for suggestions. ensure staff are involved with the company's environmental direction by establishing a “green committee” which can look at issues and develop ideas. you can also set up a “green ideas box” which allows staff to put forward their own suggestions for reducing emissions.

Another way to reduce costs is to scale back travel. it’s true that people need to travel every day to get into work, but can that be managed better. By staggering start times, fewer will have to deal with peak-hour traffic. companies can also implement car-sharing schemes, or if they are big enough, a shuttle service. Alternatively, companies can look at policies that encourage people to work from home. remote communications with the use of the internet and email would allow many people to go to the office just three days a week instead of five. improved logistics in the delivery of goods would

cLeAN throUGh to the Bottom LiNecutting your emissions is good for your business, good for you and your staff and is good for the planet


Taking care of your planet

also help reduce emissions. think, for example, of all those journeys by half-empty trucks.

the global financial crisis forced many companies to reassess their travel budgets. many replaced travel with video conferencing. this is likely to continue as companies look to rein in costs. reducing the travel budget has an impact on the climate too.

with logistics, it would also help shifting as many journeys as possible to low

or non-greenhouse gas emitting modes of transport. most trips in the city are less than five kilometres. how many of these trips could be made on foot, by bike or by low-emission public transport?

Another way is to look at the type of vehicles employed. how many trips actually require you to use heavy fuel-guzzling cars? is it essential or more for style and image? would it have that big an impact if the company switched to less fuel-greedy cars?

companies can also look at the kind of fuel being used. Look at alternative fuels such as LpG and biofuels. these are cheaper and better for the planet.

Another simple step is to recycle and reuse office waste. that includes paper, it equipment, office furniture and textiles. introduce recycling bins, labelled to prevent cross-contamination of paper, metal and plastic.

many companies are also bringing in measures and technologies to cut down on

paper use. plans to reduce A4 office copy paper use by 10 per cent per person and converting to using recycled A4 would make an enormous difference.

the process used to manufacture recycled paper can use up to 90 per cent less water and 50 per cent less energy than getting it from new trees. many are encouraging staff to refrain from printing out emails. other companies are investing in document imaging software which allows paper documents to

be scanned and emailed, instead of printed, faxed and photocopied.

A simple analysis looking at the reduction in paper costs from that would show that it would pay for itself after one year. it is also a good idea to buy printers with a double-sided printing option. that will halve your paper costs. Also, ensure the printer has 'draft' or 'econosave' modes that save ink and toner and try to fill the third paper bin with paper that is already printed on one side and

use it for drafts and internal documents.

Good housekeeping rules are important. ensure staff turn off all electrical equipment when they leave the office. that includes pcs, phone chargers, photocopiers and lights. if you have to leave the computer on overnight for after-hours backup, turn off the monitor. that reduces power consumption by up to 50 per cent. if you are away from your desk for half an hour or more, switch your computer off.

“ switching to a laptop can save up to 99 per cent of energy use every year”


Another tip: don’t use screensavers, they are energy wasters and do not serve any purpose.

install sensor lighting and turn off all lights and appliances at night, on weekends and over holidays. this will go straight through to the bottom line and result in massive cost savings. Greenhouse gas emissions can be reduced by 30 to 80 per cent by fitting lower wattage globes around the office.

companies can also reduce heating or cooling by two degrees at the thermostat. A one-degree centigrade difference in temperature between indoors and outdoors can add three per cent to your air conditioning bill. this increases greenhouse gas emissions by the same amount. staff will not notice the difference if you manage your heating and cooling but energy efficient equipment for air-conditioning and heating can save up to 30 per cent in energy costs and greenhouse gases.

other money saving, emissions-reducing measures include installing shades on windows to cut cooling costs, buying only five-star energy rated appliances and turning off all non-essential electronic equipment at the

power point when not in use, as stand-by can use just as much energy as when in use.

companies can also upgrade desktops to laptops which use half the energy. A desktop computer used for eight hours per day releases more than 600 kilograms of greenhouse gas into the atmosphere every year. By contrast, laptop computers are more energy efficient and only use 15 to 25 watts when fully on. switching to a laptop can save up to 99 per cent of energy use every year.

other good ideas include using low-energy flat-panel monitors, checking all appliances with a simple meter to identify power-hungry devices and switching to green power to support the alternative energy sector.

reduce your energy and cut

your costs

1. to reduce energy use, it is important to involve all staff as no plan will work without staff support.

2. scale back travel.

3. look at video conferencing as an alternative.

4. shift work journeys to low-emissions forms of transport such as trams or trains.

5. see if the company car fleet can switch to less energy-hungry vehicles.

6. look at alternative fuels such as lpg or biofuels.

7. recycle and reuse office waste.

8. cut the amount of paper and switch to recycled.

9. ensure staff turn off equipment when they leave the office.

10. install sensor lighting.

12. install shades on windows to reduce cooling costs.


sustainability is part of everyday life at Bundoora Primary School.

a new building at the school has a water tank that flushes the toilets. and it has been designed to be sensitive to carbon dioxide. when the CO2 hits a certain level, automatic shutters open to let in air.

The school also has a paper recycling program. Each classroom has a recycling monitor. Student leaders work with those monitors, collecting the paper every week and emptying the containers into the recycling bin.

The children in years 2, 3 and 4 also tend a vegetable garden in the school. They plant, take care of the vegetables and then harvest them. The produce is then used for a special soup or salad day at the school, where everyone gets to eat what they have grown. The students also tend eight different types of fruit trees.

Years 5 and 6 pupils tend to a worm farm, collecting food scraps. The castings go straight to the vegetable garden and fruit trees.

Principal Lee Pollard says the school has a number of programs and plans in place to build a more sustainable school, and give the children a greater appreciation of the environment.

“we have energy monitors in every classroom and it’s their responsibility to turn our lights off and keep rooms to a sensible temperature,’’ Ms Pollard says. “we are also applying for a grant which will give us solar panels on the roof of the school. That will enable us to generate more electricity than we need which we can then give back to the grid, reducing our expenditure on electricity.’’

Children are told not to put their rubbish in the

bins in the yard. Instead, they are encouraged to take their rubbish home with them. The school also holds rubbish-free lunch days where children are encouraged to bring lunches without wrapping.

She says that the message of tidiness and no rubbish is a selling point for the school. It creates a reputation among parents for being a clean and tidy place, which in turn attracts more students.

Ms Pollard says sustainability is not something that’s added to the school program, it’s part of the school ethos. “a few years ago, we had it as a special part of the curriculum, now we are doing it as a matter of course.”

“ we have energy monitors in every classroom”

case study

From rAiNwAter to FLUsh toiLets to wrAppiNG-Free LUNches, A primAry schooL is prActisiNG whAt it teAches oN the eNViroNmeNt

sUstAiNABiLity is A mAtter oF coUrse

Bundoora primary school is an officeworks Business customer

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