There are important lessons in all the economic doom and gloom – not least of which is to stay focused and optimistic.
In setting our personal and business goals we cannot ignore the economic circumstances facing us – but I do believe we should see these as an opportunity rather than a block to success.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
A few ideas to keep you focused and optimistic!
The so-called US sub-prime crisis appears to be all about banks and other lenders lending more than responsible amounts to people who simply could not continue to repay their mortgage – it seems to be about short-term greed and preparedness to sell a product presumably at a higher rate to people who could not afford what they have committed to.
I have not read much about how these people got into these circumstances, but it seems that there is always a market for aggressive lenders as consumers increasingly demand to have everything now.
Some of the big lessons for us:
- Make sure your borrowings are only for assets and cashflow, and that your assets are valued conservatively.
- It may be a good time to pay off some debt, as rates may rise again.
- Understand exactly where and how your business is making money and focus on the most productive and sustainable areas.
- Communicate with both your suppliers and customers to determine their plans and how you can assist them.
- Communicate clearly with your bank; keep close to your banker.
- Spend only on those areas of your business that are productive.
- Do not cut your sales and marketing budgets, just make sure they are effective.
- Diversify your client base – dependency on one or two major clients is always dangerous.
- Secure any contracts you may have with clients.
- Have contingency plans.
- Manage your cashflow tightly.
- There may be some bargains out there in property, shares, businesses.
- Keep the situation in perspective.
As you can see, all of the above are things we need to do to run a successful business in any economy – when things become a little tighter, well-run businesses have a greater opportunity than those who have simply made profits despite themselves.
To read more Marcia Griffin blogs, click here.
High Heeled Success is Marcia Griffin’s latest book, and is a frank account of building a business from a solitary sales person to a multi-million dollar business with 4700 sales consultants around Australia and New Zealand. It recounts successes and failures along the way and was written to inspire entrepreneurs-particularly women to triumph in business.