• Rob Haynes

Living in Uncertain Times

When we talk to business owners, a common theme is uncertainty. We have Federal & State Governments that are dealing with debt, so have put together tough budgets. These budgets have impacted on consumer confidence; households have reduced their spending whilst they try to digest how welfare changes and increased government charges affect their budgets. To complicate matters, the Federal Government is struggling to get its budget measures passed by the Senate, so the end outcome is far from clear.

On the global front, the situation is not much clearer. The US economy seems to be emerging from recession however, the data can be patchy. Europe is still dealing with many of the issues that arose during the GFC. In the US the Federal Reserve still has interest rates set at emergency levels, as do many of the Central Banks, including the RBA.

Economists spend a lot of time dissecting economic data from all parts of the world. Their aim is to interpret the data and form projections based on their understanding of the conditions. Forecasts are often based on history however, does history always repeat? The answer is often yes, but on the other hand unique conditions can often exist…….

So, how does business deal with uncertainty? Clearly business owners need to be aware of the broader environment, after all, it would be foolish to ignore outside factors however, the question is to what extent should business decisions be influenced by conditions outside your direct control? For me, the primary focus should be on factors that are under the owners’ control; customers, suppliers, employees, marketing, product range, pricing………

More broadly, the business needs to have a clear long-term strategic direction and have appropriate plans that fit with the broader strategy. Another key to success is to have a small group of key advisers that are specialists within their fields, they should know the business well and be able to provide objective guidance.

Purely from a financing perspective, there are Commercial Lending products that provide certainty. We are working with lenders that have niche products such as a 25-year term for Commercial Property loans, with no annual reviews. Rates can be variable or fixed (providing repayment certainty) and interest only periods of up to 5-years are also available.

We can also help with working capital. We can help you model your cash requirements and make sure that you have adequate facilities in place.

Financing is only one aspect, we have used this as an example of a strategy to obtain more control. Please contact us if you would like to discuss any of this in more detail.

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