NDIS businesses could be running at bigger losses than we projected
Expert blog series | 2 minute read
NDIS businesses could be running at bigger losses than we projected.
Here’s what you need to know.
As a small business owner, you are no doubt aware of the statistics surrounding small businesses and the high business failure rate in Australia. 60% of businesses will fail in the first three years, and of those who fail, 50% are profitable. Which means that even if your business is profitable - the risk of failure is still very present. So how are you working to fix that?
The fact is, many small businesses, with less than 20 employees, do not survive for very long, and definitely do not thrive in their industry - made harder again by the nuances and challenges that come with the NDIS and its ever changing demands and expectations. And sadly, business failure can happen even if you’re profitable due to many other factors. While these are worrisome statistics, it’s important to remember that, as the business owner, there are several steps that you can take to ensure that your business survives and thrives, instead of collapsing like so many others.
The NDS released stats on NDIS Business success in Australia, as of December 2021: “65% of providers say that operating conditions are getting worse, up from 61 per cent in 2020 and 38 per cent in 2019. Only around a half (57 per cent) of those that recorded a profit in 2021 expected to make a profit in 2022.” Now this is mildly terrifying and if this is something that you are already aware of - finding the resources to quickly turn this statistic into something we can collectively prove wrong. If more than half the industry is running at an objective loss, then what can we do to protect our businesses - and the longevity of the NDIS as a whole?
Here are a some tips to help turn our NDIS businesses around:
Look for effective and easy-to-use systems that reduce labour costs and conducted efficiently. Systems and programs to look out for may included automated service agreements, billing, governance and compliance, marketing & email campaigns for outreach to your network. Whatever can be driven by a system, should be - also, it’s much cheaper, easier and more predictable to run than an administrative staff member.
Pro tip: Admin costs are a huge drain on NDIS businesses that run small profit margins. Look to consolidate and streamline your administrative processes and save.
Impart KPIs on all staff, at all levels that focus on client retention and incentives for new participants joining on referral basis. Include KPIs as a part of their employment contract - being clear in the work they need to do, drawing simple to follow guidelines for staff at all levels and having their continued employment be contingent on their ability to meet achievable KPIs.
Pro Tip: no more than 6 KPIs ideally - 3 focused on the specifics of the job they are hired to do, and 3 on the organisational mission/values/cultural expectations. Each staff member needs to understand their employment is a symbiotic relationship and needs to work both ways.
Did you know it costs on average around $3k to hire a new staff member? This includes advertising, time spent shortlisting and interviewing, calling references, administrative time spent doing the NDIS worker screening check, writing up contracts and setting them up in all your payroll and rostering systems, training and inductions - and if they don’t go well - managing them out of your business and the countless hours doing this too. Hire carefully! Reference check every employee and ensure you know you are getting a good cultural, and value based employee who can contribute to the mission of your organisation. We want employees to be here for a long time, not just a good time.
Pro Tip: Think creatively! Give staff the opportunity to build groups and activities based on their own interests, skills and connections and watch the magic happen! Staff who feel they are participating in the growth of the business are more likely to stay where they are, saving the business on consistent hiring.
Know and clearly communicate your point of difference with your competitors. The ability to promote how and why your service is different from your competitors is key to being able to sell what you do and how. Knowing our niche of participants we are best suited to work for and using this to partner up (either officially or under an MOU) with other service providers that offer non-competing services that have the same market clients as you can prove beneficial.
Pro Tip: Spend time researching your competitors, and for each of their points of difference, write your own. Ensuring you stand out from the crowd of providers is key to meeting the market and knowing your participant’s needs and goals.
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Renee Ventaloro, Busienss Strategist & Coach, Valiant Valiant Business Coaching’s Renee Ventaloro is an NDIS Business Operations subject matter expert, having been in the NDIS since its inception. Having run, owned and sold her own NDIS businesses, Renee is solely focused on helping other businesses level up, create quality services, with a focus on profitable, scaleable and ultimately, saleable, high value businesses with great staff and appreciative participants. Renee works as a Business Coach, with a key focus on risk management and mitigation, learning and education, marketing and networking, systemisation and automation, ensuring sustainable businesses and preventing staff and owner/operator burnout. Renee runs online workshops, specialty events, 8 week Business Booster training and 12 month Mastermind coaching. Contact Renee for your free NDIS Business strategy session by clicking here email or by visiting the Valiant |
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