Keep your good customers, and your good staff, by taking appropriate steps right now. COLIN BENJAMIN
By Colin Benjamin
As we head into the festive season, it is appropriate to present the best and worst case for a prosperous new business year and continue to press an earlier theme – plan ahead to get ahead.
The best case is that the central bankers and federal authorities are absolutely committed to pumping out funds into long term infrastructure projects and mitigating a massive potential loss of jobs in the household sector. Couped with a rapid fall in energy costs and continuing reductions in household interest rates, this is a push for optimism and continued personal consumptions.
On 13 December 2008, the weekly Roy Morgan Consumer Confidence rating rose for the fourth week in a row – up 1.5 points to 99.9 after the Rudd Government’s stimulus cheques began arriving in the post-boxes of Australian families and pensioners. The small rise in the Roy Morgan Consumer Confidence rating has been primarily driven by Australians feeling more comfortable about buying major household items and their personal financial situations.
Over the next 12 months, 38% (up 4%, and the equal highest figure since the bankruptcy of Lehman Brothers on 15 September) of Australians expect their family to be “better off” financially while just 19% (down 1%, and the lowest figure since March 2008) say that they expect to be “worse off”.
The worst case is that small and medium business that is heavily reliant on credit card purchases will find that consumers have taken to heart the Rudd/Swan story that we are headed for tough times and have started to reconsider the risks associated with the very high interest rates on their credit cards. This could lead more retailers to start issuing their own store credit cards in a bid to kick-start sales. This is already happening in the US, but let’s hope it doesn’t get out of control, as it could lead to another mini credit crunch.
Business confidence has slumped to its lowest level since 1990 on the latest ACCI-Westpac survey of industrial trends. Shane Oliver, chief economist of AMP Capital Investors (speaking in The Australian Financial Review), is still forecasting further slowdowns as we either stay or move into a recessionary phase over the remainder of the financial year. Very large job cuts in the financial industry and a failure to get last year’s huge bonus handouts are going to put further pressure on household spending patterns.
So, to reiterate earlier messages in this column (see below) now is the time to have a top team retreat, review the forward business plans, and focus on retaining both good staff and good customers. Then build up your communications and customer relations programs, because there will be plenty of buyers for good deals.
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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