3 small business owners share their plans to grow and protect their bottom line from rising costs over the coming financial year.

At a glance

Here’s a snapshot of the advice from our interviewees:

• Take on a growth mindset to find opportunities and thrive rather than simply survive.
• "Interacting with people in online communities gives us a really good understanding about how our customers talk and think, what their fears are and what their goals are,” says business owner Emily Goldsmith.
• Retailer Joanne Swadling uses social media, Google Analytics and Google Trends to find out what people are searching for, then optimises her website for those products.
• "It's working out who your customers are, what their priorities are, what they need, then how you can reach them," says leadership coach Hareta McMullin.

It’s been a challenging few years for small businesses. Energy prices are expected to rise 30% this year according to the federal treasury, and workforce shortages are ongoing; job vacancies are at 194.9% of pre-pandemic rates, according to a report published by the Council of Small Business Organisations Australia (COSBOA) in March. Despite the economic challenges, it’s important for business owners not to panic, says Brisbane-based business mindset coach Christine Corcoran. “Focusing on scarcity can activate a fear response that causes business owners to make bad decisions for their business,” she says. “Focus on your customers and make decisions that will best support the growth of your business.”

Here’s how 3 small business owners plan to counter rising costs and boost cash flow this financial year.

1. Cut costs where you can

Noosa-based leadership coach Hareta McMullin, who runs Third Space People, has cut out all unnecessary expenses. “I have looked at what I can remove and what services I can leverage for free, such as Canva,” she says. “I have also streamlined my processes to save time, because that’s also a cost. I’m looking at my payment provider and my payment gateway to make sure everything’s automatic.” On the NSW Central Coast, Joanne Swadling set up online retailer Shop Naturally, which sells eco-friendly beauty and lifestyle products, in 2009. She manages her own social media and bookkeeping to save on staff costs, and tries to repurpose where possible. “We have an agreement with local bottle shops so we can collect empty wine boxes that we use for orders,” she says.

Christine says business owners should review their balance sheets regularly with their accountant, paying particular attention to operational expenses. She also advises business owners to work out their “scarcity number” — the number that causes them to panic and make bad decisions — and put that money aside in a separate account.

2. Sweeten the deal for customers

Joanne is trying various strategies to entice her customers to spend. “We’re providing bulk packages and special offers, and doing deals with suppliers so that we can send gifts with products,’ she says. “A lot of brands have a promo budget so we offer to promote their product in exchange for samples.” She is also trying to stay on top of what her customers want. “A decade ago, retailers were driving the market but now it’s consumers. I use social media, Google Analytics and Google Trends to find out what people are searching for, then optimise our website towards those products.”

3. Personalise your marketing

Emily Goldsmith runs Perth-based indoor plant pest protection company uBloomd. She uses data from Shopify and Google Trends to shape her marketing efforts and Triple Whale to track where her customers are coming from and what they’re interacting with. To create a community, she sends out email newsletters that detail new trends and offer plant care advice, and spends time with plant lovers on social media. “Interacting with people in online communities gives us a really good understanding about how our customers talk and think, what their fears are and what their goals are,” says Emily.

“A decade ago, retailers were driving the market but now it’s consumers.”

Hareta describes her initial marketing efforts as “spraying and praying”, but says she’s started to be a lot more targeted. “It’s working out who your customers are, what their priorities are, what they need, then how you can reach them,” she says. “For me, my ideal clients are corporations so I reach out to them directly. It takes time to nurture those relationships but I’ve found that to be the most impactful way to generate business.”

4. Upskill

Hareta has invested in an email marketing program run by Campaign Del Mar. “I am now focused on building my email list,” she says. “It feels like a more intimate way to connect with my audience.” She has also created her own PR and marketing strategy after completing a course with Odette & Co. “Those PR and marketing skills have been really helpful for me as a small business to position myself with a certain level of authority,” she says. “I now have referrals that come through from the unlikeliest of places.”

5. Think long term

Rather than devising a five-year plan, Emily creates smaller stepping stones towards long-term growth. “We make quarterly plans for our email direct marketing strategies and six-month plans for wholesale and product development,” she says. Christine says small business owners should always be looking for new markets while serving their current customers. “Think about where you want to go long term, and what steps you can take to get there. This could be improving your visibility, working on PR or getting into the conversations that are happening in your industry to become the go-to person and keep your product top-of-mind.” For inspiration, she says look for the outliers. “Look for businesses that are doing extremely well and ask what they are doing differently.”

Ask a Prospa specialist about how a Prospa Business Line of Credit can help support your business in times of uncertainty and make the most of growth opportunities.