SMEs (Small and Medium Enterprises) and startups have always been the bedrock of innovation and progress. These entrepreneurial endeavours inject fresh ideas, create jobs, and foster economic resilience. However, for many SMEs and startups, navigating the journey from conception to market and then to managing growth is fraught with challenges and uncertainties.
Enter the Industry Growth Program (IGP), an initiative unveiled during the May 2023/24 Budget presentation by the Australian Government. With a substantial investment of $392.4 million, the IGP is gearing up to breathe new life into the SME and startup ecosystem, offering a lifeline of support and opportunity. The Minister for Industry and Science, The Hon. Ed Husic MP, is committed to creating the right conditions for Australian business owners and entrepreneurs to grow and thrive here in Australia, instead of leaving and going offshore, as is frequently the case.
A Familiar Beginning
For those who have followed the trajectory of support for innovative businesses in Australia, the IGP may ring a familiar bell. This program builds upon the better parts of foundations laid by the Accelerating Commercialisation component of the Entrepreneurs' Programme, which started in 2014. With the benefit of hindsight, the decision to end, and start this program is a commendable one.
The Crux of the Matter
Innovation and creativity have never been in short supply among Australian entrepreneurs. However, translating these ideas into commercially viable products and sustainable businesses is where many stumble. The Industry Growth Program aims to bridge this critical gap by offering vital resources during the embryonic and growth stages of business development. The danger is money does not equal success. If the founders don’t have the requisite knowledge, are willing to stretch themselves and know how to deploy resources to make the venture a success, then they are destined to fail.
Prioritising Growth
The IGP has strategically aligned its focus with the National Reconstruction Fund's priority areas, which include renewables and low emissions technologies, medical science, transport, value-add in agriculture, forestry, and fisheries, as well as resources, enabling and defence capability. We investigated the definition of enabling capabilities and found that it includes SMEs and start-ups that provide goods and services in the engineering, data science, and software development fields, with an emphasis on FinTech, EdTech, AI, and robotics. The goal of the program is to catalyse rather than merely support business growth.
Designing for Success
The Industry Growth Program's success lies in its ability to adapt to the unique needs of businesses at various stages of their evolution including the founders and teams’ strengths and weaknesses. It's not a one-size-fits-all approach and central to this support network is bringing in experienced mentors and coaches who have traversed the challenging terrain of entrepreneurship and both exited and built businesses from the ground up. These guides, who have 'been there and done that,' will provide invaluable insights, helping entrepreneurs navigate the complexities of business growth. Moreover, they play a pivotal role in instilling a mindset of adaptability, ensuring entrepreneurs reign in their egos and allow their businesses to grow to their maximum potential. The challenge many business owners have is prioritising their growth activities so that they can sell, deliver products or services and at the same time hire staff, build the brand, improve their leadership, and delight customers.
For businesses within a revenue bracket of between 0-1 million, the focus is primarily on product and market fit. The crucial skills to refine include sales, marketing, creating irresistible offers, enhancing work capacity, product service development and improving operational processes.
As businesses progress into the 1 million - 10 million revenue range, the emphasis shifts towards delivery. Here, increasing customer lifetime value, hiring astutely, deeply understanding the customer base, and embracing delegation become paramount.
The 10 million -50 million range marks a stage where professionalisation of all functions is key. Inconsistencies are mitigated, tight acquisition processes are established, experienced individuals are recruited to propel growth, and a high performing and great organisational culture is obsessed over.
The Executive Director of the IGP tasked with this role must lead and ensure performance metrics not just for the companies are being measured and met and regularly reported on, but the governments' investment and objectives are being met.
We can only hope that the IGP appoints some new faces who genuinely care about the success of founders and their enterprises. Research shows simply providing funding is not enough, it must be supported by a structured support process imparting the vital knowledge and guidance required to negotiate the complex road to success.