ESSENTIAL BUSINESS KNOWLEDGE FOR EVERY CONTRACTOR
SMALL ENTERPRISES PLAY A CRITICAL ROLE IN THE AUSTRALIAN ECONOMY AND MAKE AN IMPORTANT CONTRIBUTION TO LOCAL COMMUNITIES. NOWHERE IS THIS MORE EVIDENT THAN IN THE ELECTROTECHNOLOGY INDUSTRY, WHERE THE MAJORITY OF ELECTRICAL CONTRACTORS ARE SMALL, FAMILY-OWNED BUSINESSES. Running a successful business requires more than good technical knowledge and abilities. Business management skills are equally important, particularly as your business grows and your role shifts from being on the tools to overseeing the work. The people who do
well in electrical contracting are those that think as business managers and contractors, rather than as electricians. With this in mind, we’ve compiled some of the essential business management skills needed for businesses to thrive and prosper.
INDIVIDUAL BUSINESSES MAY BE SMALL, BUT COLLECTIVELY THEY HAVE A BIG IMPACT These statistics highlight small business’s role in Australia:
The small business sector is large, vibrant and diverse covering many different types of business activities. Small businesses (employing less than 20 people) account for 97.4% of all businesses, with medium size businesses (20 – 199 people) representing 2.4%. Large businesses account for only 0.2% of all Australian businesses. Small business employs 41% of the business workforce, making it Australia’s biggest employer. By sector, small business employment is largest in the construction sector. Small business makes up 84% of all innovating businesses in Australia. The data shows innovative small businesses outperform non-innovative ones on all key metrics, including productivity and profitability. As at December 2019, small business employed 61% of Australia’s apprentices and trainees. Over 19% of small business owners are over 60 years of age, demonstrating the importance of this age group to small business and the economy more broadly.
Less than 8% of small business owners are under 30 years of age.
Women represent 35.4% of small business owners/managers.
Many businesses have demonstrated resilience and adaptability in response to the COVID-19 crisis. 40% of businesses surveyed by the ABS in June 2020 indicated that they had changed the way they provided products or services, with 20% indicating that they intended to retain these changes over the long-term.
Based on The Australian Small Business and Family Enterprise Ombudsman data from ‘Small Business Counts December 2020’
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Business Planning A business plan outlines your strategies to develop and grow your business. It enables you to define your goals and identify the actions required to achieve them. By providing a clear sense of direction, business plans help with decisionmaking and employing people who will support your business goals. They also help you to communicate with others about your activities, present the business professionally and provide context for your marketing approaches and messages. When developing a business plan, consider the following:
Your vision for the business. Why did you start it? What work do you want to do? What do you want to achieve? What resources you need to have in place. Training needs – both technical and/or business management. Your business strengths and areas you need to improve on. How big you want your business to be and in what timeframe. The sort of culture you want within your business and the types of people you need to develop it.
Write your plan down and review it regularly to keep your business on track. Harvard Business Review has noted that people with a formal plan are 16% more likely to achieve a viable business.
Make marketing and sales work for you Business growth rarely happens by chance. It requires a proactive approach to identifying the sectors you want to work in, the types of projects you’d like to take on, potential clients and
June 2021
