If you were an alien that landed in Australia you could be forgiven for thinking that we were in the midst of a terrible recession or major disaster by the ‘doom and gloom’ sentiment that seems to be hanging over our economy like a wet blanket.
Of course, it is natural for all economies to go through ups and downs, but after 22 years of continuous economic growth we seem to have forgotten how to deal with the down swing.
But how much of a down swing are we actually experiencing right now? Our current economic growth rate is still 3.5%. Even with the GFC we managed to get through relatively unscathed. Sure there were various sectors that rose and fell; however, overall there was still growth. And those of you who still don’t believe me, take a look at the last reporting season for ASX listed companies. They are doing quite well, thank you very much. Here are some stats:
- 90% of companies reported a profit
- 69% of companies reported an increase in profit
- 1% increase in revenue to $584.9 billion
- 4% increase in total net profits to $51.5 billion
Now if we assume that Australia will eventually (maybe right now) get back into a rhythm of normal economic ups and downs like the rest of the world (which to be honest we all know is happening regularly), what can be learned from that? Certainly not to pull the doona over your head and wait until it’s over!
This blog is not about figuring out how much crisis there really is, but if you are convinced there is a dip, major or not, the very best thing your business can do is get out and take advantage of the free space made up by those companies that ‘go under the doona of gloom’ and have your share in cleaning up the market.
Lessons from the likes of Warren Buffett tell you to get buying when the market is down. The smart businesses and sales teams make a move on markets in the down swing so they can ride the wave when it turns up again. There are needs and there is money out there, there are buyers who need to solve their challenges, there are markets to be won and owned.
This isn’t just rhetoric, we have an international team at Barrett; everyone had their share of experience in the major up and down turns of the past 25 years from different perspectives. And there are a few things we learned from this.
First of all, don’t become reactive or even static in your market decisions, it is hard to cultivate proactive market strategies in such times, but that’s what will get you ahead of the game.
Secondly, make sure the quality is right. Otherwise you might find yourself in a downward price spiral soon enough. In sales, quality mainly means making sure your sales teams can make the difference. I had great selling years in those supposedly ‘bad’ markets.
Thirdly, while cost-cutting is a popular game in difficult times, make sure to do the right thing with the money you save. A lot of companies are putting it aside at the moment, or giving it to their share holders to keep them happy. But don’t forget to invest some of it in growing your business. Build the highway before the traffic clogs up!
I’m not trying to ignore the world stage when I say this, we are all aware of the current geopolitical risks as well as the local political situation with the constant struggle between our political parties all causing a decline in consumer and business confidence. We must respect these situations for what they are but it does mean that we have to let them hold our businesses and customers hostage.
This is the time when the wheat gets separated from the chaff, so you need to get moving! Reposition your sales force where necessary, make sure “to clean up your house” before you venture out, but get going, start selling and really ramp up the opportunities. Especially in times like this we need to get out, get in front of our clients and help them be successful by finding innovative ways of doing business better and achieving what’s necessary to stay in the game, doing good business where there is a fair exchange of value.
So don’t miss the wake up call. Take a moment now, consider your current situation, look at your markets, see where the opportunities for taking market share or growth lie. And then make your move!
Remember, everybody lives by selling something.