How Australian Small Businesses Can Turn Financial Challenges into Growth Opportunities

January 25, 2024

australian small business growth shown with potted plants growing like profits

Planning your business is a key step for small and family businesses in Australia to grow and stay stable. It’s easy to miss this when you’re starting out or not growing much.

But if you don’t plan well at any time in your business life, you might miss chances to do more than just get by – you could really do well. We’ve been helping Australian small businesses with their books for over 20 years. Our trained experts know how to turn financial problems into chances to do better.

Let’s look at some real steps you can take now to make your bookkeeping and accounting better, and help your small business grow in a good way.

Common Financial Challenges and Their Impact on Small Businesses

Time constraints.

Contradictory regulations across states and territories, and not enough staff yet to wrangle them.

Too few big banks offer too little capital, or that require more than you can put together in terms of paperwork (always, with the paperwork).

These are just some of the business planning challenges small businesses in Australia may face. But examples like these are in actuality more of an end result. They’re less an original problem and more like a culmination of some of the smaller everyday difficulties that small and family business owners need to grapple with.

Defining and understanding these “smaller” hurdles is the first step to safely leaping over them.

Money Issues: Always Changing, and Always the Same 

The money stuff for small businesses in Australia and other places hasn’t changed a lot lately. Some problems might get bigger or smaller, but the main things they have to deal with stay the same.

  • Cash flow.
  • Tax obligations.
  • Resourcing.

When you think about rules from the Australian government, your business goals, finding new customers, and big money ups and downs, you can see why handling money is often a tough problem for many small businesses.

You’re just trying to keep up half the time. Occasionally, you also need to rest. 

Getting ahead can seem impossible.

(It’s not, but we’ll get to that).

First, a little more detail. Let’s get a complete picture of what needs to be done and why it’s sometimes hard to accomplish.

Bookkeeping and Financial Management Aren’t Why You Went Into Business

A lot of small business owners start their businesses by themselves. 

They might keep working alone for a long time or grow their business slowly. No matter how their business gets bigger, with more costs or money coming in, they are usually good at the special thing their business does, not at keeping track of their money. 

This makes sense, but if they don’t keep their money records neat and complete, it can cause problems later, like:

  • Cash flow challenges
  • Difficult securing funds for business expansion
  • Accounting or tax compliance issues

That last one is something we all want to avoid. Beyond taking focus and energy away from the business, it can stunt growth or even endanger the solvency of your entire enterprise.

So what’s the opposite of these conditions?

Shift From A Reactive Approach to a Proactive One, With Effective Financial Planning

Even at times when cash flow may be weak, or funding difficult to come by, or tax burdens heavy, a well-built and sufficiently maintained financial plan offers a springboard to progress in the form of much-needed clarity on the in-and-outs of your business.

Effective planning is key, especially when you’re running your own business in Australia. It allows you to anticipate and mitigate financial risks, manage resources wisely, and make informed decisions that lead to business growth. Done correctly, it transforms financial management from a reactive task into a proactive strategy.

In practice, this might result in:

  • Realistic budgets
  • Accurate forecasts for cash flow
  • Tax prep that is timely and efficient

Managing the finances of a small business isn’t always easy. But especially in Australia, where we value our local economies even as we seek growth, taking steps to first maintain the financial health of our small businesses often becomes a prerequisite for efficient scaling.

Planning Your Finances to Grow Your Small Business

Boosting sales or increasing your customer base may be the quickest way to scale your business, but neither of these strategies alone (or together) necessarily assure sustained success.

Growth can get tricky quickly, as it often requires investments in time and funding that need to be traced back to new returns on investment (ROI). Again, clarity becomes our goal to assure this, and business planning our method for achieving it.

A growth-oriented financial plan might:

  • Balance sustainability with profitability
  • Help fine-tune operations, for a faster and more efficient business engine
  • Provide a roadmap for growth, attached to real numbers
  • Shine a light on how to optimally allocate resources

But how exactly do we go about constructing such a plan?

What are the Financial Considerations when Scaling a Business?

While most of the below core financial functions are common to small businesses the world over, for Australian organisations they also need to be contextualised within your local and regional market dynamics. Results may vary, depending on what state or territory you operate within. If you’re unsure of what that means, reach out anytime to discuss your situation in more detail.

Otherwise, addressing each of these areas to the fullest extent possible should move the needle on growth, assuming other areas of your operations also indicate readiness.

Budgeting and Resource Allocation

When you think about growing your business, good budgeting helps you manage what you need now and what you’ll need in the future. With clear money information (which is really important!), it helps you decide how to use your resources smartly.

Examples might include:

  • Investments in new technology or equipment
  • Hiring additional staff or consultants
  • Increasing marketing or sales efforts

In each of these areas, your financial decisions should align with your overall business growth strategy, but it’s hard to do that prudently without a clear and accurate budget.

Cash Flow Management

We probably don’t have to tell you that cash flow is the lifeblood of any small business. But how much more powerful might a more accurate and precise cash flow forecast be to your dreams of growth?

A comprehensive and frequently updated financial plan can produce this kind of operational power. Beyond ensuring sufficient funds, it can enable small business owners to better time inflow and outflow, maintaining a healthy cash balance even as growth investments are deployed.

Investment Decisions

Whether expanding your product line, venturing into new markets, upgrading infrastructure, or employing some other growth strategy, the first step any prudent small business owner should usually take is to ensure any such decisions are backed by a thorough financial analysis. You can’t weigh risks and costs against opportunity without an investment strategy that’s steeped in fact. This carries through to funding sources as well. Banks and investors won’t back what they can’t weigh against their own risk, either.

All this considered now – the challenges, the benefits of financial planning, effective growth strategy – the question then arises as to how to strategically balance everything towards the assured elevation of your business.

You Don’t Need to Manage Your Finances Alone

Hopefully it’s become clear by now that strategic financial management involves more than just revamping your bookkeeping and paying taxes properly. That’s a great start, but setting up a more efficient baseline for enabling whatever growth trajectory makes sense for you often requires enlisting some help.

Let’s finish up today by outlining what type of help usually provides the most leverage, in these terms.

Outsourced Business Planning Can Make Everything Easier and Grow What’s Possible

Bring More Precision to Your Bookkeeping

Accurate and up-to-date bookkeeping wins you that clarity we keep mentioning. For small business owners with a lot of other things to worry about, help with bookkeeping alleviates the burden of tracking every transaction (or scrambling through records in a rush when you need key information. They payoff? More freedom to focus on strategic decisions.

Navigate Tax Compliance with Ease

While Australian tax law is often less complex than in some other countries, compliance still requires a good deal of knowledge and effort. With experts on your side to help optimise your financial health as a business, peace of mind becomes your new normal when it comes to tax obligations.

Normalise Efficient Payroll Management

Payroll is an area where costs can get out of control without you realising it. Between vendors and banks and regulatory compliance, complexity can creep in quickly. Streamlining your payroll via expert help allows you to keep more resource allocation focused on growth levers.

By now the advantages of collaborating with a knowledgeable partner for your business planning should hopefully be clear. Tailored services that align with your business needs and aspirations can be an empowering addition to your financial operations as a small business.

And that’s why we do what we do.

Get Tailored Bookkeeping Services to Help Your Small Business Grow

First Class Accounts (FCA) is the biggest group of bookkeepers in Australia. Being big means we can help almost any kind of small business in Australia with their money needs. 

We know a lot about the best accounting software and have been helping small and family businesses for over 20 years. FCA gives you smart money management and advice that fits just right for your business to keep going and grow.

Streamlined and Paperless Business OperationsInformed and Timely Decision-Making
Expertise in Latest Accounting SoftwareConsulting Beyond Bookkeeping
Protection Against Compliance ConcernsSpecialized Services for Start-ups
Tailored Financial Reporting and AnalysisEffective Receivables Management
Comprehensive Year-End ProcessesTraining and Support in Accounting Software

And bookkeeping is just the start of how we help.

When we talk about making your business plans better–like planning your money, following tax rules, handling pay, and getting ready to invest–we help our clients understand their finances clearly and make smart choices.

There’s a bookkeeper close to you who can make dealing with money less stressful and help your business grow more easily. And they’re ready to hear your questions.

FCA Blog Financial Management