Can your business survive a tougher economy?
Jun 10, 2019
I was back in the office last week after enjoying Queens Birthday weekend and it wasn’t long before the world’s doom and gloom had hit my inbox!
The dominant headings: Trade Wars. The US v China, Mexico, India… All three countries have either had tariffs worth billions imposed on them or in India’s case a tariff exemption cancelled as the US no longer regards India as a developing country. China is hitting back and no doubt so will India and Mexico.
Staying with the US, regulators have secured rights to probe digital giants Facebook, Amazon and Google for possible trade breaches. The announcement saw tech stocks take a hit and sent a ripple of uncertainly through the market.
Worldwide expectations and profit earnings forecasts are taking a hit and it looks like both the United States and Australian Reserve Bank will reduce federal interest rates in an attempt to stimulate their economies.
Here at home, the recent Well-Being Budget will give more impetus to rail and health but really does nothing to improve New Zealand productivity. Strikes continue in the education and health sectors – sectors all requiring more from a finite resource.
And the latest ASB Economic Scoreboard shows that while the Hawkes Bay remains on top for the March 2019 Quarter, Northland took a significant hit - down seven places to 13 out of 16 regions.
My inbox wasn’t painting a pretty picture. What does all of this mean for business?
There is certainly a tougher sales environment out there and a tightening of credit.
Doom and gloom does come with opportunities too. The current economic climate provides a great chance to give your business a health check.
How resilient are your processes to withstand a downturn? Look at things like monitoring your cash flow, your debt collection and any supplier arrangements. Can they hold up under pressure?
In the last few days the exchange rate against the US dollar has been a bit of a lottery. If you’re an importer or exporter keep a close eye on exchange rates movement. It could be a good time to fix your exchange rate if you’re an exporter.
It’s also a great time to look at negotiating better deals from Chinese suppliers – our clients are achieving a 10-15% reduction in their costs so just ask!
Companies who continue to flourish in a tougher economy have an agility mindset and processes to match.
How agile are you? We help our clients answer this question every day and then put things in place to ensure the health of their business. Contact our team if you'd like to find out how we can help you.