If there’s one thing any small business is always short of, it’s time.
Often we get so bogged down in the day-to-day things that keep our businesses ticking along, it’s impossible to free up the time needed to dream up big-picture plans.
The great news is there’s an increasing number of productivity tools that can help you easily (and cheaply) streamline your operations – hopefully boosting your profits in the process.
Here are five tools you can start experimenting with now.
This project management tool allows teams to divvy up work, thrash out ideas, store and organise files and assets, and layout deadlines.
Matthew Magain, who runs the whiteboard animation business Sketch Videos, says Basecamp helps him assign to-do lists, and chat with his copywriter, illustrator and videographer in one online location. He also uses it as a repository for shared documents.
“This stuff normally happens over email or phone calls – the fact that they get sent a notification (when tasks are updated) is a huge time saver,” he says.
Alternative option: Freedcamp
Dropbox keeps files such as photos and documents safe and synced, making them easy to share.
Mr Magain uses Dropbox to store and share videos and other files that are too big to email.
It also allows him to store the various elements of each video in separate folders, such as scripts, imagery and audio, which everyone in his team can automatically access.
In his second business, the online learning resource UX Mastery, Mr Magain uses HipChat, a tool that enables teams to chat privately or in a group and share files.
Users are able to organise conversations, dubbed ‘rooms’, by topic.
For instance, Mr Magain uses ‘content’ to chat around podcasts and newsletters, and the ‘community’ room for chats about fostering the business’ online community.
Alternative option: Glip
Task management tool Things is something Mr Magain says he “would not be able to live without”.
The tool is basically a giant to-do list, which can be viewed by project, topic, or priority.
Mr Magain uses it to capture anything he needs to do in his professional or personal life, and the information is synced to his phone.
He uses it in conjunction with an Excel spreadsheet, where set times for each task are laid out.
“I realised that if I don’t plan my time like this then I’m completely reactive.”
Alternative option: Todoist
Advertising agency PENSO uses a large array of productivity tools to improve business efficiencies, including software development tool Jira.
Penso’s head of production David Rigbye says Jira has helped the business dramatically improve the way it delivers its products - such as websites, designs and videos - to clients.
“It allows us to break projects into tasks and ship them incrementally,” says Mr Rigbye.
“Rather than disappearing for months on end and launching a big project at the end of that period - it enables us to deliver the first component in one week or even one day.”
Alternative option: Assembla
Last week, we looked at the basics of marketplace lending and why it's making such an impact on small business lending.
Across the globe, marketplace lending is one of the fastest growing forms of lending. Major international investment bank Morgan Stanley, reported that from 2010-2014, global marketplace lending enjoyed a 123% CAGR. They predict that, by 2020, marketplace lending to Aussie small businesses will reach $11.4 billion.
Across the globe, marketplace lending is one of the fastest growing forms of lending. Major international investment bank Morgan Stanley, reported that from 2010-2014, global marketplace lending enjoyed a 123% CAGR. They predict that, by 2020, marketplace lending to Aussie small businesses will reach $11.4 billion.
The bank’s blue paper was titled ‘Global marketplace lending: Disruptive innovation in financials’. In it, researchers described how marketplace lending to businesses will grow much faster than lending to consumers. They talked about Australia’s “high online/mobile banking penetration [and] growing margins”. In other words, Aussies are comfortable doing important financial business online. And lenders that are agile – i.e. mobile, flexible and using technology smartly – are able to provide a high quality service.
True to this, most of the marketplace lenders in Australia are online-based. For example, Banjos entire application process is online. Thanks to security software and other capabilities that replace manual application assessment functions, lenders can get the info they need more efficiently. They don’t need to have a physical branch where borrowers can come in and hand in their paperwork, to be sighted in person. Credit and business information can be verified in seconds by connecting to official databases, including government registries.
It’s not just lenders benefiting from good technology (and positive attitudes to technology). Business owners and managers are getting an opportunity to have a closer look at what they want from their borrowing experience. Because there aren’t standardised packages in terms of rates, repayments and so on, business owners can look at their own books and define a deal that suits them. Some marketplace lenders like Banjo, offer the opportunity to chat with a consultant about how a loan will meet their broader business needs.
Flexibility
With marketplace lending, approval criteria and rates are adjusted according to the applicant’s circumstances. There’s no single rate that applies to all borrowers. This means creditworthy businesses like yours can access cash at a better rate. Better performing companies get rewarded for their management skills. On the other hand, businesses that are doing it tough can still get access to the money they need to get ahead.
Accessibility
Similar to flexibility, accessibility means being able to complete the loan transaction from any location with an internet connection. Essentially, it’s a 24/7, 365 day service that is always open for your business when you need it. This has a range of important implications. For example, rural and regional businesses can access services they may otherwise have to travel to cities for.
Fairness
Some banks think in black and white. To streamline their operations, they try to reduce the number of products they offer, and the criteria by which applications for those products are assessed. In contrast, marketplace lenders often focus on one type of loan and one audience (with Banjo, it’s business loans for SMEs). This means they can broaden the variables in terms of who they can accept and the different rates they can offer, whilst still processing loans quickly and efficiently.
Plain English
Online-based lenders have a special incentive to keep their offer simple and their service has been formed with the goal of enhancing the user experience. The good news is, it’s more than possible to get all the essentials across without resorting to jargon and legalese.
It will be interesting to see whether Morgan Stanley’s projections on marketplace lending come true over the next few years to 2020. At Banjo, we believe they will. It’s an almost inevitable result of the changes in the way everyone – not just banks – does business. So what if marketplace lending doesn’t have fancy offices, besuited loan officers, and free keyrings? It’s not your style, it’s not our style. We’re agile, dynamic and mobile.
And we wouldn’t have it any other way.
You’re sitting in the plush grey waiting room at the bank. It’s quiet, air conditioned and clean inside – but that doesn’t mean you’re comfortable. You’ve only been in the queue for fifteen minutes, but it took you and your partners weeks to put together your business plan and proposal.
You look down at the wad of neat little charts, graphs and figures in your folder. Suddenly, you’re hyper aware that it doesn’t really represent the heart, soul and potential of your business. Is the loan officer even going to understand what you do? Will your business loan get approved – and if it does, will it be in time? It’s more than a tad stressful.
But what’s the alternative? After all, each loan requires the same information and processes in order to be assessed, right? Well, not exactly...
Marketplace lending, often referred to as peer to peer lending (P2P), is a fresh new alternative to traditional bank lending. As the name suggests, it’s driven by market forces. Supply (of money and investment opportunities), and demand (for credit and favourable rates).
Marketplace lending organisations recognise that businesses have lots of choice when it comes to sources of credit. They also recognise that every business in every industry has its own unique circumstances. Circumstances that make it a better candidate for credit.
Banks have strict criteria about who they can lend to. Traditional credit assessment techniques can rely on a very narrow range of information provided by financial statements. Often the quality and type of security being offered to support the loan is an incredibly important factor in determining the success or otherwise of the application.
Marketplace lenders look at financial statements too. But, unlike banks, they go deeper to look for other clues as to the individual business’s future potential. A marketplace lender may review social media data, online accounting software data and bank statements for real time assessment, and online industry market research. They ask questions such as ‘what does market research tell us about the future of this local industry?’, ‘what unique, protected intellectual property does this business own?’, or ‘how will the loan transform the business’s potential?’
Marketplace lending defies tradition in more ways than one. Take Banjo for example, we offer a comprehensive online service. No more queuing up in a branch!
For small and medium sized enterprises, a successful business loan is about much more than just getting your hands on the cash. It’s about the application process, timing, flexibility, the sense of understanding, accessibility, and the cost of credit. All attributes which are fundamental to marketplace lending.
As a marketplace lender, we simply get it. By focusing solely on the SME business community, and reforming the ingrained attitude to how credit should work, Banjo can deliver the all-round positive experience that small businesses have been missing from the big banks.
Open any business newspaper or website, and there’s one word you’ll almost definitely find on the first page: innovation (Along with ‘disruption’, ‘agile’, and ‘cloud’ – but that’s a discussion for another day). Politicians love a good bit of innovation. Malcolm Turnbull introduced his government’s Innovation Agenda in early December. At the launch, he said that “We want to be a culture, a national culture of innovation, of risk-taking, because as we do that, we grow the whole ecosystem of innovation right across the economy.”
But despite what the pollies and commentators say, it’s not just a matter of research, education and infrastructure. There are plenty of Aussie businesses out there with the ideas, talent and drive to do great things. The problem is red tape and regulatory burden.
To sum it up, regulations designed to protect the public are broad and inflexible. They’re often confusing for start-ups and other small businesses. Regulations can stop businesses accessing funding, trialling their idea, or launching to the public.
A lot of the red tape needs to go. According to the Heritage Foundation, Australia’s regulatory efficiency is falling. For example, we’re 21st in the world for labour freedom – just behind Colombia. Of course, some basic regulation is absolutely necessary. You wouldn’t want to get rid of basic safety requirements. Especially for products and industries such as healthcare and transportation.
There’s a balance to be struck.
The United States is a great example. Back in April 2012, the JOBS Act passed with bipartisan support. JOBS stands for ‘Jumpstart Our Business Startups’, which should give some clue as to its aims. The main parts of the Act introduced critical flexibilities, including (but not limited to):
Closer to home, there’s the Hong Kong fintech scene. ‘Fintech’ is financial technology – using innovative software to provide financial services. HK has a thriving community of start-ups working on a variety of projects and products. Payment processing, cryptocurrency, investment. In Hong Kong, when it comes to your money, there really is an app for everything.
These businesses are largely free of regulation. They don’t need state licenses for important features or functionalities. For example, until November last year, you didn’t need licenses for stored value facilities
That depends on who you ask. Different public, industry and private groups are busy advocating for less cumbersome regulation. Their objectives include clarifying, reducing and removing the rules for SMEs.
In December 2014, NAB released a detailed deregulation plan for SMEs. Key points included:
Many points, including the BAS idea, were welcomed by the government. As part of the government's official Cutting Red Tape initiative, in mid-November, they announced $4.5 billion worth of red tape savings – double the target. From the start of July 2016, they’ll refocus on reforms that directly impact innovation and productivity.
Want to get involved? You can make a submission directly at the Cutting Red Tape website. Contact COSBOA or your local chamber of commerce to find out how you can contribute. Keep an eye out for small business tax and admin changes that’ll come into force in the first half of 2016. And don’t take your eye off the National Innovation and Science Agenda.
For some, a smartphone used to be a welcome means of distraction from work. However these days – depending on your business – it’s likely that your phone has become a device that you simply can’t function without. So let’s take a look at a few ways to make use of the incredible technology and timesaving tools available at your fingertips.
Just don’t get too distracted by Facebook: it’s a time-sucking vortex. Unless you’re using it to market your business, of course.
Layla Roberts, who owns a personal concierge company Concierge Connections, is arguably one of the most organised women in Sydney. Given she’s in charge of making her clients’ lives easier, Ms Roberts does all she can to streamline her own business operations. One of the ways she does this is to catch public transport to meetings and use that time productively.
“I’m always out and about – whether I’m going out for a client meeting or whether I’m going out for personal reasons,” says Ms Roberts.
She previously used PayPal Invoicing to invoice clients on the run, but now mostly uses the app Invoice by Wave, which she believes has a more professional feel. Other popular invoicing apps include Invoice2go, FreshBooks and TradiePad.
There are countless apps to help get your daily to-do lists out of your busy brain, and onto your phone. Ms Roberts uses the ‘notes’ function, along with the app Trello, which helps her remember things when she’s out of the office.
“I love lists. I’ve got a personal folder and I have a business folder,” she says.
Those who prefer to speak their lists, rather than write them, can dictate to-do lists (or compose emails) via their iPhones. Simply open your email, press ‘new message’ and hit the microphone to the left of the space bar. You can then email the list or prepared email to yourself, and print it out, or alternatively email it across to a client or staff member. Apps such as Wunderlist or OmniFocus are among others available.
Expensify promises ‘expenses reports that don’t suck,’ allowing users to create a paperless office. Among other things, you can upload receipts, generate receipts from online sales and automatically create expense reports.
If it’s a cash injection you’re after, Banjo Loans was designed with the smartphone user in mind, so small businesses can easily apply for finance on the go.
There are also plenty of other apps – from free to pricier monthly options - that can make handling your business’ finances a doddle. The Australian Tax Office offers the myDeductions app, which helps classify and capture work-related expenses, gifts and donations or the cost of managing your tax affairs. It also helps you to store photographs of receipts, and record car trips.
Heavy hitter Xero has a mobile app that helps you reconcile, send invoices, add receipts and create expense claims. Like most popular apps it’s available on iPhone, iPad and Android smartphones.
New survey shows nine out of 10 SMEs think emerging alternative finance providers are equivalent to or better than dealing with a bank.
The results of the inaugural Banjo Small Business Finance Survey show some encouraging results for the alternative finance sector. The survey, to be undertaken quarterly, serves to understand how Small to Medium Enterprises (SME’s) in Australia are financing their businesses and the funding challenges they face.
The results of the inaugural Banjo Small Business Finance Survey show some encouraging results for the alternative finance sector. The survey, to be undertaken quarterly, serves to understand how Small to Medium Enterprises (SME’s) in Australia are financing their businesses and the funding challenges they face.
According to 2014 RBA data, there was $247bn in SME lending in Australia[ii]. The graph below shows where SMEs presently obtain funding:
“In terms of the main external funding sources, 3% of SMEs using alternative finance is a significant figure,” says Banjo’s consulting economist, Jeff Oughton (ex Head of NAB’s Economics team and director of Economics and Beyond). It equates to around 7.5bn in funding in 2015. By way of comparison, 4% of SMEs have used a foreign-owned bank and 8% a regional bank; “ The data highlights that an innovative alternative finance industry has emerged in Australia with substantial growth potential to support the funding needs of SMEs”.
“The results indicate that alternative finance is fast establishing itself as a 5th pillar for small business funding” says Oughton, whose company Economics and Beyond conducted the inaugural Banjo Survey with Evolve Research.
Showing growth of approximately 100% year on year since 2014 suggests an increased buy in from SMEs with those having used it citing ‘flexibility’, ‘good understanding of my business’ and ‘cost’ as key factors influencing their decision. Banks in comparison showed a CAGR of 2.1% in funding SME’s for amounts of less than $2m.
The recent East and Partners Business Banking Index suggests many SME’s will look to change lenders if interest rates move, their survey also indicating that SME’s are looking for better service and turnaround times. This bodes well for the alternative finance sector which not only offers the latter, but a transparent fee structure and no collateral requirement.
There are 2.1 million SMEs in Australia[iii]. and 51 per cent have no business funding product [iv] Post GFC, the SME sector has cited access to finance as an issue their businesses face, and –as observed in the UK and the USA [v]– this has constrained investment and economic growth. This survey supports these market observations with 27 per cent of SMEs stating ‘cost of finance’ and ‘availability of finance’ as major challenges for their business.
Based on the Banjo Survey 80 per cent of SMEs will likely be approved for an alternative finance loan, compared to approximately 1 in 5 from a traditional bank. Indicatively, for every 10 SME’s applying for bank funding, two were successful, one was unsuccessful and 7 chose not to apply for various reasons including cost and collateral requirements.
“ There are still too many hoops to jump through when applying for traditional finance,” says Andrew Colliver, an ex-senior NAB banker now CEO of Banjo Loans.
“Too many SMEs rely on cash flow and family debt and don’t apply for funds from traditional lenders because it’s simply too difficult,” says Colliver.
He notes alternative financiers don’t take uncalculated risks with loans. Rather, they often have more detailed checks and balances when credit checking, thoroughly assessing the health of a business. “This enables us to approve more loans without needing to rely on collateral at all.”
The results found that 25 per cent of businesses surveyed missed an opportunity because of a lack of funding, a situation that is all too common in Australia says Colliver. “Lending is a necessary part of supporting investment and growth, SMEs are screaming out for more accessible lending products.” The Banjo Survey indicated SMEs found access to traditional finance ‘too strict’ and ‘too expensive.
The research is based on an online survey with the financial decision-makers of approximately 850 Australian micro to small businesses with fewer than 50 employees, conducted in December 2015 and January 2016. The sample base is reflective of the Australian SME market geographically, by legal type, industry size and composition, as revealed by ABS data.
ENDS
[i]The European Alternative Finance Benchmark February 2015
[ii]RBA D7.3 Total credit outstanding by size and sector
[iii] ABS Counts of Australian Businesses 2014
[iv] Australian Centre for Financial Studies, Financial System Inquiry 2014
[v] The UK Alternative Finance Industry Report 2014
Why Australia's brain drain is stifling innovation …. and the SME sector
As we head into 2016, I will be writing a series of articles reflecting on the links between innovation, finance and the future of our younger generations.
In my first post I take a look at some of the issues around recruiting qualified talent, STEM talent pipelines and the gender pay gap.
Australia appears to be undergoing some post GFC digestional reflux as it transitions from a three-speed to a ten-speed economy. The Governor of the Reserve Bank of Australia, Glen Stevens, in parallel with the Government, has been steering the economy for some time towards a ‘new world’ multi speed economy underpinned by high growth rates in professional services, health services, and information and technology - and this is where the problem starts to get interesting.
Australia is in a unique position. According to various sources such as the Turnbull Innovation Paper and LinkedIn’s Cliff Rosenberg on the “brain drain”, we're simply not creating sufficient STEM talent and the talent we do create is seeking better opportunities overseas.
I’m talking now about science, technology, engineering and mathematics (STEM) and how as a country we need more of it. (Interestingly gender diversity is a subcategory within the lack of STEM talent – these areas are still struggling to attract and retain women throughout.)
Whether this is because there are a lack of opportunities for young people, these areas are traditionally not seen as particularly appealing or sexy, or perhaps for other reasons, I’m not sure. However, this “brain drain” and lack of STEM talent is stifling our innovation in general and inhibiting our ability to solve these old problems.
"Australia is under-performing internationally compared to STEM-strong countries such as India and China.” Cliff Rosenberg
You might wonder why I’m interested in this.
Usually, the people providing customer service would have a combination of customer relationship and credit/risk skills. So I’m keen to see our current workforce demographic transition to around 50% of our workforce comprising marketing, credit risk, banking, compliance regulatory skill sets, and the remaining 50% with STEM qualifications – software developers, data engineering, statisticians, mathematicians and designers.
Ideally, we’d also like to be known as an employer of choice - known for workplace flexibility and other attractive workplace practices and opportunities that help to attract and retain talent, including women. In an ideal world, I would also like 50% of those 50 new starters to be female.
As a specialist SME provider of growth funding; we observe that:
We’re a technology company that provides financial services to SME’s in Australia – so it makes sense that 50% of our staff should also be female.
Projecting forward, I’ll have problems with executing this, because previously when we’ve put panels together with this goal in mind it’s been really challenging to achieve on both the STEM and gender requirements. And it would appear we’re not alone in this.
According to the STEM Country Comparison report, in general Australia is falling behind its peers in start up formation and creation of talent. We have a real pipeline issue of lack of 15/16 year olds through to retirement age who have shown a passion to work in STEM related fields.
Additionally the gender split issue is not just a Banjo issue, with men far outnumbering women in both tech education and technology careers globally.
“30% is the average percentage of women working in the tech industry, based on diversity reports published by 11 of the world's largest tech companies in 2014.”
Frequently it’s said that from a gender diversity perspective, men get really interested when they have daughters. Certainly this is true for me. On a more personal level, I have a family of four with a daughter who is equally as engaged in looking at bugs in the garden, maths and other typically curious activities, as her brothers. What worries me is that in less than two or three government terms she’ll be making decisions about her future and I’d like her to have options. There are a couple of things that need to change. One is about the perception of people working in STEM which I’ve addressed above, and the other is the gender pay gap.
In an 8 December article in the Sydney Morning Herald, Small Business Minister and Assistant Treasurer Kelly O'Dwyer says:
"A legally mandated pay gap of 25 per cent under many employment awards was abolished in 1969, but as at November 2015, ……. the national gender pay gap for a full-time base salary is 19.1 per cent."
Quite frankly as a father, I’m appalled. If it’s taken us 46 years to get the gender pay gap from a legally mandated 25% down to 19.1% - things won’t be much different by the time my daughter is ready to enter the workforce. This is enough to worry any father in the country. Obviously, I want my own children to follow their own journey but I’d like to see an even playing field so they have choices.
Commissioned by the government of the day in 2012 and at great expense, the Securing Australia’s Future – STEM: Country Comparisons Report is a high-quality report and provides us with some clear guidelines for the future. This report, in conjunction with the National Innovation and Science Agenda establishes some clear frameworks for moving forward.
“We want to focus on the women who are change-career geeks. So it’s the women who are lawyers, marketers or nurses who are looking for a change in career, want to learn about technology and want to work in start-ups,"Tammy Butow, Geek Girl Academy
At Banjo, we understand that setting the right payment terms is one of the keys to great cash flow.
Katherine Hawes of Aquarius Lawyers says when it comes to putting in place the right payment term foundations for your business the first step is to look at your cash flow and budgets.
“It's important to review your cash flow statement and work out when you will have money going out to pay your own suppliers. Most companies tend to have standard 30-day payment terms. But as a service provider it is possible to ask for payment upfront or part payment,” advises Hawes.
Here are Katherine’s top tips for establishing and maintaining effective payment terms:
Says Hawes: “Be proactive rather than reactive and if your customer hasn't paid on time, get on the phone the same day and chase it up rather than doing nothing.”
Interns are no longer just a free source of people to do the coffee run for a business. As we know at Banjo, they are an imporant resource for many businesses and the foundation of an organisation’s talent pool.
Public relations firm the Red Agency Melbourne is just one business that has developed an intern program that is an important part of the entity’s overall human resources strategy.
Principal Grant Titmus explains the Red Agency has about 12 to 15 people that go through its internship program every year. Interns normally approach the agency and they are chosen based on their experience and via a face-to-face interview.
“There are benefits for both parties. The majority of the interns are third year students so it gives them a great opportunity to understand more about the industry and what happens on a day-to-day basis. We try to keep the work as interesting as possible so they are exposed to many facets of the industry. For us, it also provides a resource to undertake some of the more basic tasks such as monitoring or reporting,” says Titmus.
“But they also come to events that we manage and some client meetings. In the past we have gone on to employ many of the bests interns. So the program gives us a chance to look at how they work and enables us to select the very best,” he adds.
The interns do a variety of tasks, depending on the clients and projects the business has at the time. Tasks include research, media database creation, helping at events and activations and media reporting.
Titmus says when they are hiring interns they look for people who can demonstrate attention to detail, attentiveness, a good attitude towards tasks and an eagerness to learn.
The business does not pay interns who are there for work experience, but those who stay past a certain time do receive payment. Many do go on to become full time employees, but it depends on what’s happening in the business and the industry. “One year we kept on five interns, two in Melbourne, two in Sydney and one in Brisbane,” he says.
Titmus’ advice when it comes to making the most of interns is to give them work that needs to be done, so they are able to learn something from it and also benefit the company.
If you’re looking for interns and want advice about the best way to build them into your HR strategy, contact Interns Australia.
Creative communication and digital agency Penso’s top tips for getting the most from an internship program:
