SMEs need marketing plan

WHILE the short-term macroeconomic outlook is grim, small business groups are advising their members to get back to basics to adapt to the downturn.

Businesses that were recently focused on recruiting and retaining the right staff are today looking at developing key personnel or retrenching employees.

Curtin University of Technology Growth Program manager Phil Doyle said while the content and fundamentals of the university's training programs hadn't changed, the focus of the modules had.

"If you're making a loss you're making a loss, it doesn't matter if it was a year ago or today," Mr Doyle told WA Business News. "The fundamentals of business stay the same."

In good times, many businesses neglect their marketing programs due to the glut of work available, but when the economy takes a turn, these operations can struggle to maintain their market presence. "Marketing is critical during these times. Marketing is not just advertising and it's not just selling, it is understanding who your best clients are," Mr Doyle said.

"The best client is not necessarily someone who does the most business with you, it's where your most profitable clients lie."

During a downturn, he said, it was important for SMEs to get back to basics and monitor the financials of their business, such as preparing cash flow forecasts and a break-even analysis.

"Communication is also important and is always critical at all levels. Small businesses need to ensure they understand what is really happening in their marketplace, they need talk to customers and suppliers, as well as their bank," Mr Doyle said.

The Australian Bankers' Association this month assured the Council of Small Business Organisations of Australia that banks were still lending to the sector.

ABA chief executive David Bell advised SMEs to continue making loan applications, saying banks were continuing to lend despite the current economic climate.

Mr Bell said that, at $72.9 billion, new lending to businesses with a turnover of less than $2 million remains $3.8 billion above its three-year average.

Small Business Development Corporation managing director Stephen Moir said the state's SMEs were well positioned to weather the economic crisis if they adhered to sound business practices and continued marketing and promotional work.

"During challenging economic times, it is important not to reduce marketing efforts but instead keep your business in front of your customers so that when they do start spending, your name will be at the front of their minds," he said.

"In good times, [SBDC] has an increased demand for workshops and advice on starting up new businesses and expanding existing businesses.

"During economic downturns, we find more clients are looking for advice on cash-flow management, commercial tenancies, marketing and advertising, exploring new products or markets and business planning.

"In the past few months however, we have had a strong demand for workshops on how to start a business, as people leaving the mining and resource industries are considering the option of going into business for themselves."