Red Zebra Business Centre - Management Memos
May 2011 Making Measurably More For Your Business Since 1985! Page 1
SME's to continue being self reliant in the wake of Federal Budget

Max Williams, Principal Consultant

The 2011 Australian Federal Budget was greeted with some harsh headlines - "Forget Welfare - There's a Job to Be Done" caught the mood. "You'll get no help from this Government - so, get on and do it for yourself"

With resource industries powering along, the 2011 budget did nothing to address those imbalances in the two speed economy which are hurting so many businesses across the spectrum.

The Australian Retailers Association (ARA) said small businesses would feel ripped off after mostly 'recycled' initiatives disguised as new small business investment incentives, were announced in the Budget. They said retailers would pleased the Budget papers acknowledge the "cautious consumer", (See Management Memos, November 2010) and the impact this behaviour is having. Elsewhere, there were slim pickings.

Small payments to support parents and low income earners will have a slight, although mostly insignificant, impact on discretionary spending. There is little real relief for middle income earners.

With average readings for consumer confidence and willingness to spend at a 20 year low, this Budget did little to relieve small business gloom.

On top of that, the Reserve Bank is holding the trigger on a post-Budget rate rise. Any change would significantly impact the discretionary spending capacity of an 'average' consumer.

At the same time, RSM Bird Cameron's ThinkBig 2011 study has revealed that 75% of Australian small to medium enterprises (SME's) expect to grow in the next two years. This optimism comes as 73% of Australian SME's report growth in last two years - 31% reporting growth between1% and 14%.

The study further showed businesses with formal business plans are more likely to grow. Around 80% of SME's conducting formal business planning experienced revenue growth in the last two years - compared with 60% that did not plan.

Here's the paradox!

Lots of small businesses are struggling under a burden of soft market conditions and low discretionary spending capacity - but those who plan and work to grow, are doing so at a very strong rate.

Put plainly, small business people - many of them retailers - can influence the direction of their businesses. Amongst our clients, those who 'take the bull by the horns', develop growth plans, and go on to implement them, see real growth. Others revert to old habits - in a perverse attempt to protect themselves by conserving the status quo. It doesn't work!

The message is clear. There is money to be made. So, you'd better plan - then go out there and start making it!

Data is stolen


hen employees leave, there are always the questions of why, where are they going, what will they do now - and most importantly, will a competitor benefit from their knowledge. Often, they have decided to  become a new competitor themselves!

One brazen story of employees stealing

from their employer was seen by your correspondent  a long time ago. It came to light when the employer got a phone call from a prospective customer - only to find that the customer thought he was buying from a competitor. The competitor was a group of three staff members who had stolen designs, made duplicate tooling, and was using the employer's phone to take orders!

Some years later, a client saw his top engineering person taking home a computer one night - a desktop computer! Three weeks later that man and several others left to start up in competition, using stolen designs and a stolen customer list.

And so it goes on and on. Sales reps take customer lists, service techs take customer lists. Engineers and production staff take customer lists.

Why? Because your customer list is the most significant piece of commercial property you own!

That's why you need to keep your customer list - otherwise known these days as your 'database' - absolutely safe. And you must keep it safe from anyone at all in your industry - and anyone who could enter our industry.

Keep Safe

That means keep it safe from suppliers and competitors alike. And especially from your staff!

Now that's the problem, isn't it? How can you keep these things from your staff? After all, the examples given above, and a whole lot more, all come down to theft by disgruntled staff members who plan to leave. Let's look at a few pointers.

1. It's all a State of Your Mind

So much technology! So many things we can do now! Amazing! All true - but wait!

Underneath this, there is the fundamental need to recognise the value of what we are using in our business day by day. So, the first thing to do is to remember that your data is valuable. Try this simple example: Think what is on your system - you really don't want on your Point of Sale computer?

It is easy to get so much information on the computer in the shop, and that makes it convenient. Staff can make good use of their time, when a lot of the data they need it on the machine on the counter.

But it's very risky, too!

2. You Can Take Control!

In some situations, it seems like there is no option but to trust the staff. Well, of course you would. But remember the auditors' mantra - "Trust - and Check!"

In this case, it means creating a system where the service people, for example, do not get access to the whole list of service customers. They get the data of today only - and they get it in paper form. Some service vans depend on electronic data. Then have your IT contractor create access rules that means the data cannot be copied - only uploaded to your server.

If you think your business is worth, say, $300,000 in goodwill, some IT expense to protect that is good value! Why risk the business you have built?

If you recognise that you can take control, the only question is what is the best way to do it.

3. Lock up Your Daughters

The old Kentucky hill billies locked up their daughters, because they were valuable! So we should lock up the most valuable parts of our business. In the last couple of years, we have seen two clients lose a slab of business to ex-employees. Just burn a data CD in less than five minutes - and the game is over!

Our sense of wonder at what technology can do is deeply ingrained. Each new model of whatever we buy can do so much more. Each time we get a new computer in the business, we are told of all the extra new features you can use. In fact, we should be looking carefully at what we really do need.

Your IT professional can arrange to disable a lot of the features on your computers - features you would really rather not have. For instance - that machine with all your customer data can be disabled from burning CD-ROMs at all, or DVDs for that matter too. It can be done by creating specific profiles - or it can be done by physical intervention. Same for USB sticks too!

Make sure your network access is limited too. That way only certain key people can get access to that material - and even they can be cut off if you really need to.

4. Sad but True!

It is very disappointing to realise that we do have to think this way. There is always someone on your staff thinking about what is best for their long term goals - and that will probably involve leaving you.

Takes steps now to make sure your commercial data is safe. When the worst does happen, you will be much safer - and your losses will be much less.

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