Your people are your business.
Investing in people pays off
The real trade-offs of growth
Running a small to medium sized business (SMB) is a constant exercise in prioritisation. There is never enough time, rarely enough margin, and always something competing for budget that felt urgent last Tuesday and irrelevant by Friday.
In that environment, it's surprisingly easy to spend money on the wrong things. Not out of carelessness, but because the wrong things are often well-packaged, professionally presented, and easy to justify in the heat of the moment. The right things, by contrast, are quieter. They don't send you proposals. They just show up, do the work, and carry more of the business than the org chart suggests.
Those things are your people. And unfortunately they tend to be the last thing to get attention but the first to feel the squeeze.
Where the money actually goes (and shouldn't)
Before thinking about what you should invest in next, lets take a look at some of the different categories of discretionary spending that may be impacting the bottom line. None of these are inherently wrong. The problem is when they become habitual, unexamined, or substitutes for addressing what the business actually needs.
Subscriptions and software platforms
Promising to transform operations, they now sit somewhere in the background, unused or underutilised, quietly billing you every month. The average SMB carries more software overhead than it realises. A quick audit usually uncovers anywhere from $500-$3,000 a month in tools that duplicate each other, were never properly implemented, or outlived the problem they were bought to solve.
Branding and marketing spend disconnected from strategy
A new website, a rebrand, a social media management retainer - all of which have their place but are regularly prioritised before businesses have even nailed what they're selling, who their ideal customer is, or why those customers should spend their money with them. Spending on marketing a brand before the fundamental substance of the business is bedded in rarely ends well.
Conferences, memberships, and industry events
These certainly generate conversations, but rarely generate a pipeline. Networking has genuine value, but it accumulates costs - registration, travel, accommodation, time out of the business - none of which gets scrutinised the way a staff request for training would.
Generic advisory engagements
Coaches, consultants, and facilitators who offer broadly similar programs - regardless of your industry or business context. This isn't a dismissal of external expertise. It's a distinction between advice that fits the actual shape of a business versus advice that fits a ‘templated framework’ someone else paid them to develop years ago. Recommendations that look reasonable on paper but don't survive the day-to-day realities of the business.
Governance theatre
Advisory panels, informal committees, and external ‘independent’ voices (i.e. family, friends or loved ones) introduce complexity and dilute decision-making in businesses that would be better served by clear internal accountability. At the SMB revenue scale ($1M-$10M), good governance is mostly about discipline and honest internal communication. It doesn't require a quarterly lunch with someone who read the financials the night before.
None of this spending is categorically wasteful. The problem is the pattern: these costs accumulate while the people who could identify exactly where the money should go i.e. the leadership team sitting inside the business every day, are never asked. Pay reviews get pushed to next quarter without anyone checking whether a team lead is already fielding calls from recruiters. Development budgets stay at zero because no one in the room thought to ask the operations manager what would actually make the team more effective. Critical roles get filled on the cheapest option because the hiring decision was made above, not with, the people who will work alongside that person. The answers are usually already in the building. The mistake is not looking for them here first.
The real cost of under-investing in people
A single key person’s departure costs between $20,000 and $75,000 when you account for recruitment time and costs, onboarding, retraining, lost productivity, and the institutional knowledge that walked away with them. That's consistent with figures from the Australian HR Institute and broadly accepted across workforce economics.
What would it have cost to keep them? Often a $5,000–$8,000 salary adjustment. Sometimes flexible working arrangements. Sometimes just being genuinely told their work matters, regularly and specifically.
The opportunity cost runs the other way too. Businesses that invest in their people - in salary, in development, in working conditions worth staying for - build something that compounds exponentially: client relationships that survive account manager changes because the team is stable, operational knowledge that doesn't have to be rebuilt every 12-18 months, a culture that attracts good candidates because the people already there speak well of it.
The evidence is easy to see. It shows up in revenue per head in your P&L, in client retention rates, in the ability to take on growth without things falling apart.
What high-performing SMBs actually prioritise
High-performing businesses that grow steadily and profitably tend to share a similar set of priorities. Not because they're following the same framework, but because the fundamentals compound when you get them right.
They pay competitively and proactively. Not at the top of the market necessarily, but ahead of the point where good people start looking. In the current Australian labour market, skilled people in trade, logistics, administration, and client-facing roles have genuine options. Proactive salary reviews are a retention tool, not a budget line.
They invest in development that stays in the business. Not credentials for someone's CV, but skills that make the person better at the actual job your business needs done. The operations lead who understands your systems more deeply. The account manager who gets better at difficult client conversations. And unlike most discretionary spending, it doesn't just up and walk out the door.
High-performing SMBs communicate clearly and consistently with their teams. People who understand where the business is going, what's working, and where the pressure points are tend to solve problems before they escalate and care about outcomes in ways that job descriptions can't capture. Transparency is cheap and its absence is expensive.
They bring in outside specialists for specific, deliverable work. There's a meaningful difference between ongoing advisory retainers, and specialists brought in to build something - a reporting framework, a hiring process, a new system or process, a particular tech implementation. The real, tangible outcomes produce something the business actually owns.
Smart SMBs make hiring decisions carefully and onboard properly. Fast, cheap hiring followed by poor onboarding is one of the most reliable ways to waste time, money and goodwill. The businesses that get this right, treat the first 90 days of any new hire as an investment, not an annoying administrative process.
Three practical steps to rebalance your SMB’s investment focus
Audit the passive spend first.
Before the next ‘spend decision’ and as part of your budget planning process, list every recurring cost that isn't directly related to headcount or improving core operations: software subscriptions, retainers, memberships, advisory arrangements. For each one, ask: ‘what has this tangibly produced for my business in the last six months?’ and ‘What would we lose if we cancelled it tomorrow?’ The answers are often incredibly clarifying.
Have salary review conversations before its too late.
Don't wait for a resignation to discover you're $8,000 below market on someone who has been carrying a disproportionate share of the business for you. A structured annual review process of all roles against current market rates is far cheaper than the alternative. Use resources like SEEK's salary insights or the ABS Labour Force data as reference points.
Identify the one capability gap that's genuinely holding growth back.
Most businesses at this scale have one or two areas where the absence of proper process, skill, or infrastructure is a recurring constraint. Rather than addressing it with ongoing advice, scope and plan it as something to be built with clear requirements, a defined outcome, and either internal development (if your team has the know-how) or an external specialist engaged to deliver it, not just talk about it.
On a final note…
The businesses that can navigate growth most effectively aren't necessarily the ones with the smartest strategy or the most polished external positioning. They're the ones that recognise, early and consistently, that the people inside the business are its most appreciating asset and treat their budget accordingly.
Everything else has its place. But that place is behind your people, not in front of them.
If this resonates with where your business is right now, there's more thinking on sustainable SMB growth at businessrx.com.au.
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Author
Wendy Mayer, Founder of BusinessRx - helping build stronger foundations in $1M–10M businesses through systemised execution and practical, hands-on operational support to improve clarity, efficiency, accountability and sustainable growth. Together.
To learn more visit: www.businessrx.com.au | Reach out by email to: wendy@businessrx.com.au
