Some simple tips for making Lismore businesses profitable
THERE are 15,584 businesses in the Northern Rivers yet most of them struggle to turn over $500,000 a year and 64 per cent per cent have no employees.
In the past four years 6283 local businesses closed.
Experts say everything from bad planning decisions to slow internet are preventing businesses from growing.
The Northern Star asked two of Australia's leading business gurus about what it takes to survive and thrive.
Entrepreneur and Shark Tank star Naomi Simson* says it takes very little effort to set up a business but making a success of it is an entirely different beast.
"If you have got an idea in the morning you can have it registered with a website and everything else done by the afternoon and away you go,” the founder of RedBalloon Australia and the Big Red Group says.
"The hardest part is about scaling a business and growing it - and finding customers.”
Ms Simson said scaling up was expensive and new operators could expect to not draw a liveable wage for 18 months or more.
Ms Simson said she was not surprised by that most local business struggled to turn over more than $500,000 a year.
"High turnover depends on the industry that you are in and what you are selling,” she said.
"If you are a retailer or warehouse holding a lot of stock, you will chew up your working capital.
"If you are a fee for service business, for example a consultant selling your intelligence, your costs are a lot lower.
"$500,000 sounds like a lot of money but it might not be.”
Council of Small Business Organisations Australia CEO Peter Strong has long been an advocate for enterprising start-ups.
He said planning was the key for people wanting to keep their businesses on track.
"You need to do a classic forward business plan with cashflow management so you know how much money you need to come in to survive - to cover your rent, your power, your suppliers,” Mr Strong said.
"You also need to manage your emotions - do not get so excited that you do not apply normal due diligence.
"Get yourself an adviser who knows your industry - not a relative but a professional - and listen to them.”
Mr Strong said business owners struggled if there was limited access to good quality internet.
"One of the biggest problems is that businesses do not have great relationships with their internet providers and that can cause major issues,” he said.
"We've found that where people have access to excellent internet they are more likely to succeed.” - NewsRegional
- You can read Naomi Simson's exclusive column, Biz Talk, online and in print in the Northern Star.
HOW WE COMPARE
REGION, NUMBER OF OPEN BUSINESSES, NUMBER CLOSED IN PAST FOUR YEARS
Northern Rivers, 15,584, 6283
Clarence Valley, 3808, 1668
Coffs Harbour, 6869, 3169