From skills shortages to climate change and global entrepreneurship, there’s plenty of action on the horizon for Aussie businesses. We asked business experts what they expect the New Year to bring small to medium businesses, and what personal and professional resolutions they’re making for the future.
Peter Sheahan – Entrepreneur and Gen-Y Expert
The future of business in 2008 and my personal resolutions for the New Year are closely tied together. One of the big issues for next year is driven by demographics: the big talent crunch. We’re starting to feel it already, and it’s only going to get worse as companies have to compete aggressively for the best talent, usually by crafting powerful employer brands.
Here in Australia, that talent shortage manifests itself strongly as an ICT worker shortage that poses a real threat to our nation’s competitiveness. But this threat also presents a profound opportunity. It’s an opportunity to reposition ICT as an exciting career-of-choice in the minds of young Australians. As a nation, we can’t afford to let this opportunity in ICT pass us by, just as all other industries can’t afford to neglect their talent as they compete for the best people.
2008 will be a year of challenges in the workforce, but they are challenges that innovative and bold businesses and industries can overcome.
Kirsty Dunphey – 27-year-old Self-made Multimillionaire, and Retiree
We’ll be launching a new business—www.reallysold.com. It's a departure from the type of business I've been involved with from my first at age 15, in that I won't be dealing with people face-to-face. Reallysold.com is an online business that helps real estate agents write killer advertisements that rock the properties they're selling. For me, 2008 will see this business in its initial marketing and beta phase—lots of fun stuff! I also hope to start another two businesses and put out my third book in 2008.
In terms of trends for business, I could ramble on here about web ‘two point ohhhh’ and all the technological challenges and excitement that business owners will face over the next year. But I feel that the trend business owners need to be really aware of is providing consistently high-level service to their clients while still incorporating those fabulous technological advancements. Whether your business is online, a local corner store, an accountancy practice or a five-star resort, we all need customers who can't get enough of us!
Personally, I’d like to travel more than I did in 2007 (my goal every year!), look after my health more and push myself on every level. I want to end 2008 flushed in the face and knowing that I couldn't have tried to achieve any more for the year.
Anthony Bell – Founder Bell Partners Accounting and Advisory Firm
We can’t get away from the interest rate crush—the credit squeeze that’s coming out of the States—and I think Aust business owners should be looking carefully to cash flow to fun their growth. And I think mad marketing campaigns and brand growth will be restricted a little bit next year.
But at the same time it’s a great time to be market share grabbing—a bit of recession and interest rate growth cleans out the weak and the old. We’ll be looking to capitalise on that a little bit, to try and grab a bit more of the market. A business like ours actually performs best when people are in a little bit of trouble and need a little bit of advice.
In our business growth, we’re aiming for about 20 to 30 percent like last year. We’ll probably look to expansion, too. We’ve got to address the SE Asia market, and probably also the NZ too, so a bit of cross-bordering growth. And dare I day it, in-house legal counsel.
On a personal level, I’ll look to work with the medium-management team a bit more. I’ll keep strong in investment outside of business investment, so in property and through market security. But I pump assets into the business to drive that, so I’ll probably still do that.
This last year’s work–life balance has been great, so hopefully I can keep on with that.
Robert Bryant – IBISWorld
At IBISWorld we take our forecasts out to five years. This takes into account the time it takes for business to truly take advantage of any trend, establish itself in the marketplace and ensure it has the infrastructure to take advantage of it. We find this to be a more applicable forecast period than 12 months.
Looking ahead, the resources sector will continue to dominate the top 10 industries in terms of growth over the next five years. In particular nickel, uranium, and iron ore are forecast to top the industry growth table. This doesn't mean you have to be a big mining corporation to take advantage. There has been a great deal of growth in everything from the supporting infrastructure, engineering, construction trades, transport, even entertainment and leisure, as local and regional economies continue to prosper. Opportunity continues in the business services sectors–accounting, legal, recruitment and training.
Outside of resources, financial services are expected to be another dominant sector. This is due to several key factors. Our aging population funding their retirement, strong employment levels driving incomes up, and recent legislative changes encouraging us all to take responsibility for our own financial future. Consequently, investment advice, and the industry that encompasses investment services and superannuation, all feature as areas of opportunity in the years ahead.
Following are some of the highlights based on industry growth forecasts, but, as ever, companies that understand their own business, that of their customers, and the business environment they operate within, have as good a chance as any to find success in the year ahead!
John Downes – Partner, Growth Solutions, Deloitte.
As a consultant in the SME space, I find that small enterprise has just as many problems as big enterprise, but they’re faster to react—more decisive—and you can make a big difference very quickly.
Thanks to retiring baby boomers, the number-one issue facing everyone (globally) is the talent shortage. They’re being constrained not be the opportunities in the marketplace, but the opportunities for them to get good staff to perform the work. It’s going to be a growing trend in 2008. And that provides significant opportunities for businesses, as well as the challenges. Service businesses will increasingly rely on outsourcing more to fill roles.
Some of the resource gap will be filled by the ‘grey army’, and small businesses will need to be prepared to take on different staff models to access those skills.
There’s also a trend towards sustainability, and corporate social responsibility, to make an impact on climate change. There are a lot of opportunities for service and manufacturing businesses that address climate change.
With an increasing sense of busyness, there’ll be continued use of outsourcing for ‘valet’ services, such as home cleaning, car detailing, buying services and concierges. That’s going to lead us into a boom in franchising in industries that are either service or SME focused. So that caters to the market in two ways: one, for us to serve up those services and products, but also more readily draw on the retiring end of he community who are able to take on more of the part-time or casual roles in those franchises.
Suzi Dafnis – Entrepreneur and National General Manager, Australian Businesswomen’s Network
Having sold Pow Wow Events in August, my hope if to have more free time to work on the Australian Businesswomen's Network, a role that, while voluntary, is very fulfilling and my way of giving back.
Our MentorNet program, which kicked off in 2007, will continue with a goal to have 1,000 women go through this six-month mentoring program in the next two years.
A new initiative Her Voice (hervoice.com.au) is an exciting new direction for the
ABN, and will take the concerns of the ABN’s community of over 20,000 Australian businesswomen to government and industry, advocating and lobbying to make a real difference to legislative outcomes.
In terms of business trends and predictions, I think SMEs need to think global. I feel that those businesses that think globally, even if they only operate locally, will win. There is such easy access today to the latest of everything, latest think, business ideas, education. If you’re not accessing what’s hot in key places around the world, your competitor might be.
Technology and especially social media and networks will find a solid place in business practice. If we look beyond the social aspects of Facebook and My Space there is a clue to how to build loyalty and attraction to customers. Using technology to interface relevantly with your customers will be key.
I think those companies that display a real and necessary care for the planet will win points. But it can’t be tokenistic. If you’re not really being green, don’t pretend to be.
Tim Harcourt – Chief Economist at Austrade and Author of Beyond Our Shores
The global economic environment is currently open and buoyant, with many opportunities for a small, open, and stable economy like Australia with a strong resource sector and manufacturing and services capabilities. The world economic outlook is in its most healthy state for at least 30 years and expansion is expected to continue. The strength and sustainability of China’s growth continues, Japan’s economic resurgence has assisted the region, and India has been a major economic growth market in the first decade of the 21st century with Australia a key beneficiary.
The trend towards openness in the global economy has also changed the nature of Australia’s engagement with the world at the enterprise level. Australian businesses are now ‘born to be global’. Manufacturing and services are now more open, and we’ve been able to take advantage of global growth in the emerging economies.
Research estimates there are around 42,000 exporting businesses today with some 15 percent of all SMEs now actively engaged in exporting. Many are also moving beyond traditional exporting and importing, and are globally engaged with the world through licensing, franchising, strategic alliances, and global supply chains.
In short, while the global economy is in its best shape in nearly 30 years, Australia does need to be aware of risks and imbalances in the global business environment– whether of a financial, geo-political or environmental nature. However, economic reform, particularly focussed on capacity constraints in infrastructure and skill shortages, will advance Australia’s international competitiveness and help more Australian businesses, large and small, to prosper in the global marketplace.
Graham Turner – Founder, Flight Centre
After a good year in 2006/07, growth will again be a priority for Flight Centre Limited during 2007/08.
The company will seek to expand its retail, corporate and online footprint globally, through shop and business openings, while also exploring new product offerings and diversified revenue streams, which may see the company transfer its proven retail model into different businesses.
Other priorities for 2007/08 will include continued development of Flight Centre Limited's customer and product strategy and finetuning of the company's bricks and mortar friendly web strategy.
The company will continue to pursue strategic acquisition opportunities in Australia and overseas to fast track its development in some important markets and sectors.
Generally, I believe that 2008 will deliver some significant benefits to Australian travellers. Positive factors include the buoyant economy, the strong dollar, the arrival of new carriers like Etihad, Air Asia X, Viva Macau and Tiger and increased capacity from many of the established carriers.
Dr Alex Maritz – Director of Master of Entrepreneurship and Innovation Australian Graduate School of Entrepreneurship
It will take entrepreneurs to accept the new era of business. In the next year we will be living in a chaotic transition period to a new age defined by global competition, rampant change, faster flow of information and communication, increasing business complexity, and pervasive globalisation. The pace of change has become so rapid that it takes a different type of venture to be dominant and marked for an entirely new era of business.
Three forces driving the new economy:
1. Knowledge. Intellectual capital as a strategic factor; a set of understandings used by entrepreneurs to make decisions or take actions that are important to the company.
2. Change. Continuous, rapid and complex; generates uncertainty and reduces predictability.
3. Globalisation. In R&D, technology, production, trade, finance, communication and information, which has resulted in opening of economies, global hyper-competition and interdependency of business.
Forces like technological breakthroughs, economic growth, market evolution, shifts in customer tastes, social changes, and political events can expand or shrink Australian business. This unoccupied territory represents a land of opportunity for the technological and strategic innovators who can see or create it faster than their competitors do. The opportunities are great, but so are competition and the chance of failure.
Customer power surges as customers have many more options today and can choose from alternative suppliers.