Capitalising on tough times
Ian Brown BEc, CPA is Director of Corporate Services, UNE Partnerships. He is also co-chairman of the CPA Australia ‘Centre of Excellence for Business and Management’ Here he offers some thoughts about turning adversity into strength.
Today’s economic climate
We shouldn’t need to be reminded about the global economic turbulence at present. Mid year, oil was getting close to $150 per barrel; our dollar almost parity with the US dollar; the stock market 6000 points and interest rates climbing.
Now, late in 2008, how things have changed! Interest rates cut 2% in just two months; the stock market on a good day hovers below 4000 points; petrol costs around $50 per barrel and the exchange rate is around US 65 cents to the Aussie dollar. Consumer and business confidence turned sour during September, yet many countries throughout the world would be delighted to be as well-placed as Australia.
The need to invest
Businesses and individuals need realistic and flexible strategies so they not only survive this degree of volatility, but emerge from it in a stronger and better position. For a business, this means focusing on key investments and streamlining their processes and systems.
One such investment is marketing. Even a trimmed marketing budget should remain sharply-focused on selling and offering the right products to the right customers. Outlays could be moved from more broad-brush activities, towards those with immediate and measurable results. Keep close to your major customers and ask them what they want and need from your business. Deliver a high-quality product with a customer-friendly focus. Continue to invest in marketing activities that deliver tangible results, and move away from those that don’t.
A strong marketing and selling plan might look like a ‘cost’ in the short-term but it is a long-term investment in future revenue growth. Take advantage of weaker competitors by ensuring your firm is ready to ‘deliver’ in the eyes of your new-found customers.
Develop your key people
Another key investment needs to be made in the people at the centre of a business’s success. These key people are found across the entire organisation, from shop floor to senior managers. Identify those key people and establish pathways to encourage their future development.
Staff training is an option that has wider impacts on the whole organisation.
While investing in training might also look like a ‘cost’ in the short-term, it definitely pays off in long term prosperity of the business. Consider these points:
- It equips your people with skills and knowledge to lead into the next upturn (fear not – it WILL come!).
- It helps staff retention. Staff turnover is very costly if you consider the direct cost of recruitment plus the time spent ‘learning the ropes’ in the first year after appointment.
- Its value can be multiplied, when those trained staff mentor others around them.
Like any good investment, every dollar of ‘expense’ should provide a good return.Individuals might invest in their own training, or training could be funded through an employer. Either way, the skills acquired can improve earnings potential for the individual and for the business.
If you feel that it’s expensive training your people to be the best, just consider the cost of only having a second-best team!
