How to grow a business in South Australia
Jason Dunstone
Square Holes Founder | Cultural Insights, Business Growth, Flourishing Cities
(I finished writing this following our end of year team lunch yesterday. 2022 has been HUGE! I traditionally feel shell-shocked reaching the finishing line, and it is nice to sit back in rare silence and reflect on the year that was. Yesterday's meandering Square Holes team lunch, wine bar, then gin bar drinks was wonderful, much laughter, such a nice bunch of humans. The measure of a successful year)
This year is the 18th year of Square Holes. A time to reflect on our progress, and to revisit the journey, the joys and bumpy bits. Even with the best intentions at the start, the narrative of any business is formed moving forward. It is nice to look back, with the luxury of hindsight. One thing I have learnt at the helm of Square Holes is that growth is far from an easy task, particularly in a small market like South Australia. The narrative is different.
An abundant year for Square Holes
Looking back at the year that was, I can proudly say that 2022 has been abundant ...
There is a level of patience and resilience required to survive and hopefully prosper. Progress can be slower than hoped, as the timing needs to be right, but eventually progress is made. Curve balls and uncertainty can feel like failing, yet is often actually progress.
Recently, I've had a few congratulatory conversations for?surviving?so many years. While there is a level of pride in what we have achieved, such praise can be unsettling. Survival is not typically why someone creates a business, yet perhaps ultimately not dying is success.
It takes strategic thinking, local support and resilience to combat the constant uncertainty and chaos of running a business. We have tried from the start to be clear about who we are, and it has been wonderful in 2022 to refine our narrative - who are we, what sets us apart and where are we heading?
We are so pleased with the local design and development team behind our rebrand.
Some economic facts about South Australia
We love our home base in South Australia. Lately I've reflected on our successes, as well as the pros and cons of being based in the small, albeit wonderful, city of Adelaide. As a State with 1.8 Million people on a total area of 984,321 square kilometres, South Australia is 157% the size of France with 3% of the population. 1.3 Million (78%) of SA's population in the capital city of Adelaide. This creates a unique and complex culture and economy.
There are many benefits of a small population, including ease of networking and lifestyle, yet economic realities can make creating and growing a business challenging.
This at least partly explains why South Australia has a larger proportion of non-employing businesses (i.e. sole operators) and smaller proportion of businesses employing one to 19 staff than other states and territories. Australia is a small business economy, and South Australia has a larger proportion of smaller businesses and non-employing businesses.
It is a worthy hypothesis to ponder why this may be the case. The complacency that can come with a comfortable lifestyle, and/or business owner trepidation with a small market.
Growing South Australia's population and jobs are key priorities, and there has been much work and success in creating an environment to start and grow businesses.?Lot 14, the?Tonsley precinct,?SouthStart,?SA Government?and growth plan are all contributing.
Each State Election a platform (with the health system) is 'jobs for South Australians.' Employment is complex in smaller cities, and it is good to see progress in South Australia, recording well above the national economic growth rate. Yet, employment weakness remain.
South Australia has a small trade surplus (exports minus imports, of $1.7B) thanks to solid exports of wheat, copper, education and alcoholic beverages (primarily wine) to markets such as China the US and India (More >). It is important to note that our local economy is only a small slice of the overall Australian economy (i.e. around 5.6% of GDP). While growing slightly more than other states of Australia, South Australia is small and vulnerable.
Branding South Australia
When I first moved back to South Australia around 25 years ago one of the first research projects I was involved in was to end the tag line 'SA Going all the Way!' There was somewhat of a desperation in the message that South Australia would do practically anything to attract investment and visitors to the State. I can recall focus groups where participants talked as if they were trapped in South Australia, at least we were a good place to raise children, even if the economy was a bit dubious in the late 1990's.
This was approaching a decade since South Australia's infamous?State Bank disaster?in 1991, one of the biggest economic disasters in the State's history. As a government-owned bank, deposits were guaranteed by the?Government of South Australia. The State Bank disaster was given as a reason for privatisation of the Electricity Trust of South Australia.
As a young person, no-children, moving back to South Australia I wasn't at all pulled to "the a nice place to raise children" proposition. In many ways it was off-putting. I loved, and continue to love, the lifestyle aspects of South Australia, and could see the potential to be a globally focused city and economy.
I have since worked on many research projects helping to support the positioning of South Australia locally, interstate and overseas, including initiatives such as SA Make the Move, Brand South Australia, I Choose SA and more recent 'A New State of Mind' campaign working to entice bright young minds to move to South Australia and set up their home, career and businesses.
From my research over more than two decades, South Australia's mind and mood is making measurable progress, the perception elsewhere is evolving, and our local state of mind is improving. The pandemic years have created many shifts in how people wish to live and work, and South Australia is well positioned to balance the wonderful local lifestyle as a hub for and globally focused businesses.
South Australia's geographic isolation, and small population is less of an encumbrance than ever before. Even so there is complexity in global growth for local businesses.
The 'A New State of Mind' campaign (created by?Fuller) targets young people in core target markets (e.g. Melbourne, Sydney and Brisbane) to consider visiting, moving to and growing a career / business from South Australia. Square Holes conducted concept testing earlier this year and is conducting on-going monitoring of perceptions of South Australia, intentions and other key metrics within the target audience interstate and locally. We love the campaign and are enjoying watching the measurable shifts as a consequence.
I feel that South Australia has never before seen such progress, and in many ways we are at the start of an exciting new era. With less need to live in big cities for a career, smaller population centres with enticing lifestyles are increasingly appealing.
Why 'buy local' is so important for South Australia
A critical way to address the economic weaknesses in small economies is the creation of 'buy local campaigns.' Typically, such campaigns are more prominent in smaller economies, such as South Australia and Tasmania, from the heightened economic vulnerability.
Initiatives such as I Choose SA were developed to help retain sales, profit and hopefully employment growth locally. A few years ago I was quoted in an article about the?#ichoosesa?campaign and research we conducted on the importance of buying local ...
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“Failure of locals to support local businesses is a global economic issue, and the size of SA requires local support to be culturally and economically prosperous.”
In recent years, many other initiatives, including on-line stores and marketing campaigns, have emerged in South Australia (and elsewhere) to make it easier to 'buy local.' The reality is that most consumers do not skew purchases to local, as the large global brands are more well known, easies to purchase and trusted so attract most sales. Buy local is often not ingrained in consumer behaviour as the default.
Square Holes has developed many strong on-going relationships with many of South Australia's iconic brands, who have prospered from growth beyond local markets into interstate and overseas. Yet, likely they wouldn't have grown to a critical mass initially without local buyer support. Local buyer support is critical in creating a growth foundation.
Square Holes is grateful for the support from local brands and government over the past couple decades. Without such a supportive local client base we likely would not have survived, grown, employed local graduates and other team members and invested back into the South Australian community, arts and not-for-profit sectors. We have worked hard to offer a high quality and friendly service, and are grateful for the support. Our research has guided with locally and globally focused clients, and we are pleased with the relationships grown and contribution to government policy, business growth, and other aspects.
A concerning trend I have noticed in recent years is leaders in local iconic brands, government and other organisations choosing 'not' to support local. A few procurement decisions Square Holes has been involved in and feedback from colleagues in similar sectors such advertising, creative industry and other professional services illustrate leaders ignoring the local talent pool. Or, government departments unnecessarily importing service usage from interstate or overseas owned groups, often without proper process and transparency.
Leaders seeking local community support, yet ignoring local talent. Such importing of professional services weakens critical sectors, and they shrink, the future talent weakened.
South Australian leaders can be hypocritical, or ignorant, seeking local support, yet?bypassing local products and services and sending revenue and profitability interstate and overseas. Thereby contributing to destabilising the local economy.
Global brands, be they consumer products or professional services, are ever seeking new markets to grow, and are often willing to invest and burn large amounts of cash to grow market share and become faux locals. Local businesses can be unable to compete with such polished, well resourced and aggressive Goliaths, spreading themselves globally and extracting customers in order to optimise shareholder return. While it has theoretically never been easier to go global from anywhere in the world, local businesses can struggle to grow with shrinking local revenue streams, smaller cash reserves and slick global competition.
It's a 'chicken or egg' debate.
What came first, the lack of local business support or diminished local talent pool? Mine is on the former, and why it is worth 'investing' in locally owned products and services.
Why local is better than Goliath
Opportunity for smaller local businesses may come from being visible and communicating their value above global alternatives. There are many benefits of smaller and local, particularly in 2022 when the traditional value proposition of large groups has eroded.
The question to me is how can South Australia prosper and grow for future generations?
In 2016 I wrote the below piece for SA Life, discussing my perspective on how South Australia will find value from supporting local businesses, embracing the lifestyle and thinking globally. Small populations and economies like South Australia do not have the organic robustness of large economies, so require care to nurture local entrepreneurs.
Critical in this is acknowledging the challenges and obstacles faced by local businesses.
I really like Brand Tasmania's acceptance of weakness as a strength ...
"Tasmania wasn’t always known for extraordinary products and experiences. Our isolation, and the forces of globalisation, meant we had to reinvent our economy at the end of the twentieth century. To do it, we drew on our culture of invention and enterprise.?To compete, we had to work harder. We focused on better, not more.?We chose to protect our environment, to ensure everything we grow and make here is different."
Similarly, South Australia has weaknesses that could be twisted to be a strength (e.g. a perception of 'boring' is debunked as quirky and creative). And, small businesses seeking to grow may be able to find their weakness twisted as a positive in order to grow.
Closing musings
It is important to keep ourselves and local iconic brands, government and organisations accountable. While buy local may not always be best, it should be the default, particularly when it is not possible to justify otherwise. Local businesses will increasingly struggle to grow if leaders fail to nurture a flourishing economy of products and services. When large commercial and government spends are sent interstate and overseas it just seems a bit sad.
In many ways South Australia has shaped the business Square Holes is 18 years later, and we are so grateful for the support. We have refined our service and narrative to optimise our chance of success locally, interstate and beyond, and look forward to our next growth phase.
Similarly, how South Australia articulates its uniqueness and 'who we are' is critical. There are many obvious strengths, cultural, economic and otherwise, yet understanding South Australia's vulnerabilities is key.
I dream of a future with more South Australian brands growing globally.
Wherever possible choose South Australian products and services, keep commercial and government leaders accountable, and beware of Goliaths pretending to be locals.
Please have a wonderful Christmas and New Year season.
For more from me read via below or https://squareholes.com/blog/author/jason/, subscribe to my newsletter, or read / subscribe to Square Holes ' eMag Think!
Thank you and have an awesome 2023!
Chairman National Smallgoods Council, Northern Economic Leaders and Owner Barossa Fine Foods
2 年agree with your article, we all do need to support each other to gain the critical mass to be a significant contributor to the wellbeing of our community. As with you, high quality work, persistence and passion are a good start to be the corner stone for a successful future. We are well placed to grow and adapt to the changing world as long as people with vision have influence and tenacity to drive forward.
Executive
2 年Great analysis Jason. And I love the concept of turning around perceived weaknesses. Thanks for sharing it. Happy New Year, see you on the other side.
Director Logomotion Marketing.
2 年Great insights Jason and congrats on year 18. Oh for a government and visionaries who support S.A. enterprise and minds. Always have felt this is a leash on the State's true potential.
Excellent (an in-depth) article Jason Dunstone. Your synopsis of SA and insights on the myriad of nuances of this big but little state is exceptional. Thanks for sharing.