Businesses in north west Tasmania, particularly small businesses who are proactive and future-oriented will be best positioned to benefit from a challenging future and, uncertainty.

A characteristic of many small businesses in northwest Tasmania is the heavy reliance on one or two major customers, quite often from the same sector (agriculture, fishing, mining, manufacture, health care).

Whilst many northwest businesses have been prepared to accept this risk (consciously or unconsciously) in the past, with the increasing levels of uncertainty, some businesses in this region are considered vulnerable.  Responses at both government, regional and individual business levels should be strategic and preventative, rather than reactive and ‘after the event’.

One response to improving business resilience to significant disruptions is for businesses to become as efficient and as competitive in their respective markets as they possibly can.   This will inevitably mean changes to business processes, the introduction of automation and other technology, increased use of information through an informed use of artificial intelligence and, significantly more training and development for employees. 

Whilst this response is always good (although we have been attempting this for as long as I can remember), improving efficiencies is of little use if a business cannot produce their products at all (drought) or the customer no longer requires our product (or our customers no longer have a customer).

A more strategic and wide-ranging response to improve the resilience of small businesses in northwest Tasmania is for businesses to move away from their traditional characteristics of northwest businesses and begin to spread their income sources through diversifying their products and services, diversifying their customer base and diversifying their industry sector.  This does mean small businesses moving away from producing, in many cases, one product for one customer.  Producing one product for one customer is convenient, minimises the number of variables businesses need to manage and provides for efficiencies through repetition and economies of scale – but it dramatically increases the vulnerability of businesses in the instances of significant disruptions to their businesses.

This strategic response will require operators of small businesses to improve their capabilities in the areas of:

1. Opportunity identification;
2. Opportunity assessment;
3. Opportunity implementation;
4. Information management; and,
5. Business planning.

For example, as a result of the uncertainty surrounding the future of the King Island cheese factory (even with a new owner), and the ongoing impact of the recent drought on King Island beef farmers, work is being undertaken to identify opportunities for King Island beef farmers to diversify their income sources. This could include income from establishing and operating small, bespoke, niche cheese manufacturing businesses on the Island producing cheese for consumption on King Island (locals, visitors) and for sale off island in Tasmania and on the Australian mainland. Businesses of this nature have already been established on the Tasmanian mainland – so there is a precedent for this.

Changing the way we do business is never an easy choice, particularly for those of us who have operating our businesses over an extended period of time.  We have a choice between being in front of the changes businesses in northwest Tasmania are experiencing (and will continue to experience) and determining our own futures or, constantly ‘putting the fires out’ as a result of being reactive rather than proactive.  It’s a bit like driving a car forward by looking through the rear vision mirror. I am sure there will be businesses operators who will ‘bunker down’ and wait out the storm with the expectation that our region’s economic circumstances will finally settle down and revert to previous conditions. I don’t believe this to be the case.  Having advised many businesses through the global financial crisis (2008) and the recent COVID pandemic, I have seen those businesses who have been proactive and strengthened their businesses emerge from major disruptions with increasing turnover, improved cash flow and higher levels of profitability.  I have also seen the opposite where businesses who have not adopted a proactive, future oriented approach emerge from the disruption in poor shape, high levels of risk and facing ongoing struggles with viability and purpose.  The choice is stark but it’s also yours.