Three steps towards recovery
Friday, 17 October 2008
By Colin Benjamin
Last week’s advice was don’t panic. Now it is time to let the market stabilise, assuming that the regulators don’t cave in to the pressures from the short-selling brigade. We have already seen what happened to the volatility index in the US when these greedy non-productive fund manipulators were allowed back into the bullpen.
The world has accepted that there will be a change in the US administration with the Joe and Obama show leading to a fiscal stimulus to the domestic economy, a reduction in foreign intervention and an increase in support for the middle class rather than the corporate captains who have been shifting their business offshore.
This heralds an end to the economic crisis and the beginning of an international reconstruction of financial markets for small and medium enterprise that can demonstrate innovation, creativity and entrepreneurship.
What could still upset this move to stability will be determined by the extent that Dick (Cheney) recovers from his operation soon enough to try one last throw of the dice against Iran, and George (Bush) tries to put the Republicans out of a 10 year loss of control of Capitol Hill by stirring up a “kids overboard” type crisis in the Taiwan Straits.
If the decisions to rush military deals around the globe are the last acts of a lame duck president, we could well see China move funds from the dollar to the euro. But even the White House can read the polls.
We are seeing the consequences of Kevin 09 thinking about being a world-class player showing how to manage a 3% to 4% growth while encouraging the Institute of Public Affairs cheer squad to focus on protecting executive salaries at home.
We are also seeing that our big four financial institutions are being encouraged to swallow the smaller remaining regional players and encourage us all to start saving as if the crisis is only just in its infancy.
As the Americans become more insular and world trade talks go into a further stall, it is time for our business leaders to address their own goals and objectives and set new flags for customer services and strategic planning.
We still have a real credit crunch, a huge foreign debt and exposure to the 20% reduction in the growth of the Chinese economy, but there are now signs that the banks are looking for good lending prospects and opportunities to encourage small firms to take up the slack that is being created by the consolidation of the big end of town.
Three critical steps for SMEs in this environment are:
- Take the time to meet with any customers that have export links and may need your assistance to bridge the gap between short-term declines in orders and a long-term order book.
- Invite your best sales and marketing team to do the same with older customers who used to be a mainstay of your business growth and development, even if it is only to ensure that they are invited to your Christmas break-up (and don’t cut out the bonus because things were tough this year).
- Trim your production lines to those items that have longer term prospects and cut out those that have poor gross profits as cash will still be tight until the end of the financial year and you will have to be patient while the market waits for lower interest rates and the flow of Kevin’s $10.4 billion splurge.
Dr Colin Benjamin is Entrepreneurship and Strategic Thinking Consultant at Marshall Place Associates, which offers a range of strategic thinking tools that open up possibilities for individuals and organisations committed to applying the processes of innovation, creativity and entrepreneurship. Contact: CEO Dr Jane Shelton.
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