Adding Value to Australian Businesses
‘Nowadays people know the price of everything and the value of nothing’ – Oscar Wilde
What does value mean to you? What does it mean to your customers? Is ‘value’ purely a financial consideration or is there more to it?
We asked Australia’s leading social commentator, demographer and analyst Bernard Salt how he would define ‘value’ in the run-up to 2020. His take on the subject is certainly enlightening, and something to consider in your business.
It offers new ways of adding value to your business and understanding how a business valuation is about so much more than just dollars and cents.
Return to society
“I think the term ‘value’ is expanding its scope and range,” he said. “It once referred to a return on investment; it now covers the idea of a broader return to society.”
Mr Salt believes that a business must make a profit but also a contribution to society.
“It must never be a net detractor from society and/or the environment. I think consumers are increasingly being shaped by Millennial values around the need for business to make a societal contribution.”
This isn’t new; in 2017, the Millennial Impact Report in the US found that 87% of Americans bought products from businesses that advocated for issues they cared about.
Corporate social and environmental responsibility is one of the best ways to engage and keep customers and is something that can be considered when valuing a business. And it’s not just for large corporations. SMEs can also benefit enormously from adopting policies around charitable giving, recycling, staff welfare, volunteering and more.
Of course, there is a cost to doing this but consider the ROI in regard to marketing and promotion, building your brand, staff morale and increased sales.
Bernard Salt believes we must also value those who create businesses, the entrepreneurs.
“I very much think that Australia suffers from a tall poppy syndrome. There are lots of wonderful traits associated with Australians – TPS is not one of them! This is a ‘development area’,” he said.
Tall poppies are those who are considered ‘too big for their boots’, people who ‘flaunt their success’. That carries an insinuation that they just happened upon success.
“It takes courage to start a business and employ people and to do all the paperwork and to return a profit. It’s hard, damn hard. It needs to be encouraged not disparaged.”
Bernard Salt believes TPS came about due to Australia being geographically isolated. And that has led to the ‘cultural cringe’, where achievements are rejected not applauded.
Salt has long warned about Australia’s lack of entrepreneurial spirit; we asked him about the long-term consequences of not taking action.
“The future belongs to the bold and the entrepreneurial. I’d rather see Australian-owned businesses employ Australians than overseas-owned businesses employing Australians. Unless we create the businesses of tomorrow, someone else will. It might as well be us!”
Never rest on your laurels
Mr Salt says there are many ways a business owner can add value to their product/service to grow the business.
“Always look at ways of improving the business. Never rest on your laurels. When you do that, it’s time to get out. Keep moving and planning and strategizing,”” he said.
If you’re selling the business, “make sure its profitable and sustainable and has good relationships with suppliers and customers. It’s not rocket science”