Tag: small business

Does small business need government support?

Can governments provide business assistance?

The New South Wales State Government’s decision to axe their long standing small business programs raises the question of whether small businesses need government support at all.

Last week’s announcement the NSW Government are abandoning their business education programs and replacing them with a previously announced network of local business advisors shows where small business lies in the state’s list of priorities.

Taken at face value, the changes appear to be moving back to the face-to-face business advice model of a decade or so ago that was common before the winding back of small business programs and local enterprise centres by then Federal Liberal and state Labor governments under John Howard and Bob Carr.

On closer examination, it’s a cut to business support and an effective withdrawal of NSW government assistance to small business. The remaining services will be outsourced to the same local business centres that have been starved of funds for over a decade.

A concern with the individual advisors will be how many businesses they can reach, according to the NSW Trade & Investment annual report 2010-11 the axed events had an audience numbering over 5,000. It’s difficult to see how the advisor network will match that and makes one wonder how the more important events couldn’t have been streamed or podcast across the Internet.

Putting aside the pros and cons of this restructure, the bigger question is should small business expect any government support at all?

The record of Australian government support for industry is not good. We only have to look at repeated visits to the trough by what remains of the Australian car making industry, the bipartisan debacle of assistance to the renewal energy sector or the support given by the Keating Labor government to Kodak to see how well schemes have worked out.

Most of Australia’s economic success stories have happened despite, not because of, government’s pouring money into industries. For example, the first five years of the current mining boom was completely missed by the political classes along with the Canberra press gallery and the media economic commentators.

This is where small business steps in – rather than relying on access to the ministerial suite to protect their industries, the little guys and the startups compete on price, service and innovation. Aspects that organisations in protected industries or those dependent on taxpayer largess struggle with.

Indeed many small business owners and entrepreneurs struck out on their own because they felt stifled by bureaucracy. So offering them programs wrapped up in paperwork is counter intuitive.

Where the government can help is with keeping busy business owners up to date with new developments in business, markets and technology which was exactly what the events programs like Small Business September and Micro Business Week did.

It’s difficult to see how the individual business advisors employed by local Business Enterprise Centres will keep up with their clients up with changes regardless of how skilled or well intentioned they are.

All of the changes are justified by the report from the Small Business Commissioner’s listening tour. Apparently she was told businesses didn’t want events like Small Business Septtember

I certainly didn’t hear any complaints at the breakfast fourm I attended at the Northern Beaches, most of the concerns seemed to be from cafe owners arguing about council outdoor seating permits. If the commish wants to get involved with that nest of vipers, I wish her the best of luck.

Overall, small business can’t expect much from government; particularly in the modern corporatist society where Big Government does Big Deal with Big Unions and Big Business while Big Media selectively reports what suits it.

Probably the best thing for small business is stay nimble and avoid being stepped on the Big Dinosaurs as they dance obliviously to the major changes that are happening in the world around us.

Big dinosaurs look after their own, don’t expect them to give you anything except a big shower of dung.

Disclaimer: I’ve been hired by Trade & Investment to host various events on the now axed programs and worked for 19 months at what was then the Department of State and Regional Development. I wish all of those former colleagues who now find their positions abolished the best of luck in finding another role.

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Why small businesses aren’t using cloud computing

The IT industry needs to understand cloud services and small business

As part of their push into online applications, telecommunications company Optus yesterday released their Digital Ready report examining Australian small business’ use of cloud computing services.

One of the notable results is that only four percent of small business proprietors claim to use cloud computing services and 59% are unsure of what exactly cloud computing is.

Those results are surprisingly poor and indicate businesses don’t see the benefit or value in cloud computing services. There seems to be a number of factors driving this.

Misunderstanding cloud computing

That over 90% of small business owners claim not to be using cloud computing indicates many simply don’t know what these services are. If asked most would admit to using Facebook, web mail or some other online or social media platform that runs on cloud computing.

That’s an education issue and if anything is a criticism of those of us – including myself – who are trying to explain the concept. We can do better as an industry.

Security

Many businesses, big and small, misunderstand technology security risks and have an inflated view of how secure their own desktop, networks and servers are. In many ways the security of cloud services is better than most small business IT systems.

Where the security argument falls down is in the hyperbole of many IT security vendors – every month we hear breathless reports, repeated by gullible technology journalists, of how smartphones, social media or Apple Macs are going to be struck down by a new wave of viruses and each time the “threat” quietly fades away into obscurity.

As long as hysterical fear stories about the security of smartphones and cloud services circulate in the media, it’s understandable that small business owners will be wary of trusting technologies they don’t fully understand.

Sunk costs

Many established businesses have sunk costs in existing software and hardware. For proprietors or managers to justify moving a new service, whether it’s on the cloud or not, there has to be a clear financial benefit in doing so.

Terms of Service risk

Cloud services – whether free or paid – come with a set of terms and conditions. Online Payment, social media and other cloud computing services have shown themselves to be quick in shutting down business accounts without warning, any due process or an accesible way to resolve disputes.

Quite rightly, many business owners are wary of risking key processes or data to services that might cut them off without notice and who often lack a customer service culture.

The reluctant advisors

Business IT consultants struggle with cloud services. Cloud services are a threat to those used to making money from selling servers, software and desktop computers.

For the more far sighted consultants, the thin margins offered by cloud services mean they have to rely on fees for service. If something goes wrong, the client’s first call will be to the trusted advisor and not to the service providers’ helpdesks.

This is a headache too far for many consultants as they know they’ll probably not get paid for the time spent sifting the truth in a blizzard of vendor finger pointing. It’s far less risk and more profitable to recommend a server and desktop solution.

Is cloud computing important?

For businesses, the economics of cloud computing is changing industry dynamics. With lower capital costs, it makes enterprises more flexible and responsive to changing markets.

Cloud services are critical to businesses – for established companies they’ll find themselves losing out if they don’t at least consider the advantages and choose the right online tools.

The onus right now though is on cloud computing vendors to tell their stories better and demonstrate why they can be trusted with key business processes and valuable data.

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The saddest sign you’ll ever see

When a landlord takes possession of a business, there’s a lot of pain behind the signs.

The sign on an abandoned business announcing “Landlord taken possession” usually hides a pile of pain and distress.

It’s not cheap or easy for a landlord to take possession of a business premises and for most to do so it’s usually the end of long period of unpaid bills and broken promises.

Behind that sign is usually months, if not years, of stress and despair as a business owner has held onto a failing enterprise, bluffing their landlord, their suppliers, their staff, their own families and often themselves.

Almost every one of those signs has a story of failed relationships, destroyed friendships and ruined marriages.

Often they didn’t understand the cost of doing business and in many cases because they hadn’t consulted a bookkeeper or accountant earlier they didn’t understand their venture was always loss making despite what appeared to be a healthy cashflow.

When the truth about the businesses becomes obvious, life for the honest owner of a failing enterprise tries to bluff themselves and those around them that things will be okay, that the dream is still alive.

This is what worries me about many of the businesses that participate in group buying deals, they are desperate to keep their business afloat and believe the cashflow or publicity will save their failing venture. Even worse, many don’t understand how that “50% off” deal will affect their ability to pay staff and the landlord.

Even where the failed proprietor has been one the “two percenters” – the 2% of our society that runs their affairs with no regard for the pain and suffering of those they hurt – many people, particularly the smaller suppliers and low paid workers, have taken a hit as bills went unpaid and promises were not kept.

Most business owners though believe in their idea or vision and work long and hard in an attempt to achieve it. The majority of those who end up with the landlord taking possession are often those who ignored the signs and believed things would come good next season, next month or next week.

I’m always saddened when I see a “landlord taken possession” sign like the one near me in the window of what was an Italian restaurant until recently. What’s the saddest business sign you see?

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Why online listings are an essential business tool

Online listings with the major search sites are free and effective. Even more importantly, those listings form the basis for many of the location based services that are springing up on Smart Phones. You need to list your business on these sites to make sure they are appearing in the searches customers increasingly rely upon.

Online listings with the major search sites are free and effective. Even more importantly, those listings form the basis for many of the location based services that are springing up on Smart Phones. This article originally appeared on the 19 January Smart Company Business Tech Talk column.

Since Global Positioning System (GPS) equipped smartphones arrived on the market, we’re seeing all kinds of location based phone applications springing up.

Recently I’ve been playing with two of these services – Foursquare and Urban Spoon to find there are some lessons for businesses in how these products work.

These services are terrific at telling you where the nearest cafes, service stations or places of interest are, although at the same time I’ve noticed how inaccurate some of the business locations can be.

Often, particularly in the case of Foursquare, the wrong spot has found its way into the system because customers have taken a guess at the address, added the details while on the way to or from the business or just simply got the location wrong. Which can be awkward, particularly if your competitors are closer to the incorrect location.

So it’s worthwhile getting your businesses address correct on these services. Fortunately, it isn’t as hard as having to track down every single one of these new services and spend hours plugging your details into them.

The most important single service is the Google Local Business Centre, as many of these location based services use Google Maps. Every business should be on this already as the listing is free and the information also feeds into Google search results. If your organisation is correctly listed here, it will appear in all Google searches for your product in your neighbourhood.

Microsoft are in this market too with their Local Listing service which feeds into Bing results in a similar way to Google’s service. Like Google Maps, it’s free and listing only takes a few minutes.

The traditional advertising medium for most Australian small businesses has been in the Yellow Pages. Sensis also offer a free listing which will get you in their maps and directories (although to get a priority listing you’ll need to pay more).

So check your details are correct on all these services, it only takes a few minutes and given most customers, particularly in the business-to-business markets, use the web to research potential suppliers you’ll probably pick up a few customers just by having the right details online.

With mobile internet usage expected to overtake desktop surfing in the next few years, it’s critical your details are correct on these phone applications which customers are going to increasingly rely upon.

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