The Australian economy certainly has a number of contradictions at present:
- The stock exchange values are up.
- Housing finance is up.
- House prices are up.
- Interest rates are still at a very low 2.5%. However, there’s an expectation that the Reserve Bank of Australia would like to raise the interest rates to around 3.5%. However, they are reluctant to do so, whilst the currency is at a high value.
- Unemployment rate is now at 6.1%.
- One of the things to watch out for is, if the currency starts to fall, there’s an expectation that the Reserve Bank will then move to increase interest rates to around 3.5%.
As an SME operator, what can you do about this?
Money is still moving in the economy. Some businesses are being creative to get a larger piece of the pie. Can you do the same?
At this stage, some strategies to think about include:
- Should you be locking in interest rates, in anticipation that interest rates are expected to move upwards in the next few months?
- Could the expenses of operating your business be reduced?
- Have you checked your labour manning budget and reviewed the various expenses being incurred?
- You could talk to your suppliers to try to re-negotiate prices or negotiate special promotional/marketing assistance.
- When planning to be creative, don’t forget to talk to your suppliers to see what assistance they could provide.
- What additional revenue could be generated within your business? This would probably require you to be creative and to look at throwing in a few ‘gimmicks’ that would appeal to your target market.
- Don’t forget the core business processes:
- Value creation – find out what people want and need and create it.
- Marketing – attract attention and build demand for the products and services you’ve created.
- Sales – the challenge is to turn prospective customers into paying customers.
- Value delivery and servicing – give your customers what you promised and ensure they are satisfied.
- Finance – bring in enough money to keep going and make your efforts worthwhile.
There is no doubt that we are in challenging times at present. Now is a good time to review your processes to keep your business strong.