Articles - Business
Some of the headlines in TV news bulletins have issued grim warnings as to what might occur in 2012 with some commentators claiming that the emerging financial positions are the worst in 25 years.
Australia will not be able to totally escape problems from the ongoing mess in Europe which, when coupled with continuing problems in America and the “two-speed” economy in Australia, highlights the necessity for all businesses to be doing some planning now, to ensure business survival in 2012.
Some of the things to think about:
- Have you “stress tested” your business? You should review your cash management control procedures, particularly relating to: debtors, work in progress and compliance with bank covenants on any financial facility that the bank has made available to you.
- Be careful about an over-reliance on a bank overdraft, because banks have been known to suddenly withdraw overdraft facilities with little warning to the small business. If it is possible to arrange for a loan to incorporate a bank overdraft facility, then this might be a better approach to securing ongoing bank facilities.
- Have you thought about the carbon tax issues? The effects of these on your business and the changes you need to make to minimise the effect of the flow through from the carbon tax.
- It is probably a good time to undertake a wastage review – could costs be reduced relative to electricity, gas usage, travel expenses and telephone?
- Difficult trading conditions should not stop small business operators from maintaining a good relationship with their team. To survive in difficult times, small businesses need the best possible team they can employ.
Our recommendation is for all businesses to prepare Budgets and Cashflow Forecasts for the likely trading scenario in 2012 and have a meeting with your bank in relation to the facilities required.
If you would like to have a discussion with us relative to any aspect of "Getting Ready for 2012", please do not hesitate to contact us.
Didn’t we all just love Saturday’s announcement that the Gold Coast will hold the 2018 Commonwealth Games! This is fantastic for the Gold Coast specifically but for South East Queensland in particular. The filter will then redistribute those people that attend the games and all those people that contribute to the development process up until game day throughout Queensland and Australia generally. That is why all level’s of government from local to state and federal will commit to the development process that sits around such an event.
The Commonwealth games are on for only two weeks but it’s still all about “supply and demand”. Sentiment will change immediately to a more positive and certain outlook so “demand” for goods, services and facilities, etc, will return, because the market now knows that projects will be completed with certainty by 2018. The market knows that the government will commit $2b to local developments, Jupiters have committed $300m to the redevelopment of the casino and convention facilities and private enterprise will now commit to projects that will be in high demand where relevant to the new government infrastructure projects and with good proximately to the commonwealth games developments generally. All these facilities will than have greater capacity to hold concerts, major sporting events, conventions and tourism opportunities for many years to come. The flow on effect is huge!
The media (and its all about marketing) will project the Gold Coast to the word at a much greater rate than it normally has capacity to do. Local, state and federal governments will help fund this. This is great for tourism. Governments at all levels will grab hold of the coattails and use the event as leverage for the promotion of tourism for the Gold Coast, Queensland and Australia generally. Why wouldn’t they? It’s a great opportunity to get more bang for their buck!
What does all this mean at street level for all the small and medium businesses that have been struggling over the last few years and a market that can’t stop talking about how bad things are!
For every dollar spent the “multiplier affect” of that spend means that that dollar spent turns into many dollars as it works its way through the community from government and businesses ultimately to the person on the street that buys the milk or pays the home loan. For example if you build a house then the bricky is paid, the electrician is paid, the bricks are purchased, the lights and timber, the turf, the concrete, the white goods, etc…. down to the cloths line. Every business that you buy off to build the house has to then buy their goods to ultimately add value to it and supply to you. They all employ people to facilitate this, and they each spend their pay packet every week. So as you can see, you spend $500k on a house then that money is spent many times before ultimately you finish up with your house.
Understand this in terms of the Commonwealth Games spend. Lets say the government and private enterprise spend collectively $4b as a direct impact of getting the games then that turns into a multiplier of say 4 times from government to business to contractors to employees to basic consumption at the corner store, so we have a stimulus of $16b running through our economy that has 600,000 people. This is not Sydney with 5m people or Brisbane with 2m, this is only the Gold Coast so the impact is major and the positive sentiment that will be generated from this is huge. It started Saturday morning at 8am!
We need to embrace the progress that will be pulled forward because of the 2018 deadline and we need to spread the word to each other on a daily basis of how good things are here on the Gold Coast and how good they will be for the next decade. Negative energy has been in the air lately and it breeds like bacteria! This should be replaced now with positive energy, contributed by each and every one of us to create a collective positive and pro-active environment of winners and visionaries who are prepared to lead the Coast through a serious phase of positive change.
Be a part of it!
The Commonwealth games are on for only two weeks but it’s still all about “supply and demand”. Sentiment will change immediately to a more positive and certain outlook so “demand” for goods, services and facilities, etc, will return, because the market now knows that projects will be completed with certainty by 2018. The market knows that the government will commit $2b to local developments, Jupiters have committed $300m to the redevelopment of the casino and convention facilities and private enterprise will now commit to projects that will be in high demand where relevant to the new government infrastructure projects and with good proximately to the commonwealth games developments generally. All these facilities will than have greater capacity to hold concerts, major sporting events, conventions and tourism opportunities for many years to come. The flow on effect is huge!
The media (and its all about marketing) will project the Gold Coast to the word at a much greater rate than it normally has capacity to do. Local, state and federal governments will help fund this. This is great for tourism. Governments at all levels will grab hold of the coattails and use the event as leverage for the promotion of tourism for the Gold Coast, Queensland and Australia generally. Why wouldn’t they? It’s a great opportunity to get more bang for their buck!
What does all this mean at street level for all the small and medium businesses that have been struggling over the last few years and a market that can’t stop talking about how bad things are!
For every dollar spent the “multiplier affect” of that spend means that that dollar spent turns into many dollars as it works its way through the community from government and businesses ultimately to the person on the street that buys the milk or pays the home loan. For example if you build a house then the bricky is paid, the electrician is paid, the bricks are purchased, the lights and timber, the turf, the concrete, the white goods, etc…. down to the cloths line. Every business that you buy off to build the house has to then buy their goods to ultimately add value to it and supply to you. They all employ people to facilitate this, and they each spend their pay packet every week. So as you can see, you spend $500k on a house then that money is spent many times before ultimately you finish up with your house.
Understand this in terms of the Commonwealth Games spend. Lets say the government and private enterprise spend collectively $4b as a direct impact of getting the games then that turns into a multiplier of say 4 times from government to business to contractors to employees to basic consumption at the corner store, so we have a stimulus of $16b running through our economy that has 600,000 people. This is not Sydney with 5m people or Brisbane with 2m, this is only the Gold Coast so the impact is major and the positive sentiment that will be generated from this is huge. It started Saturday morning at 8am!
We need to embrace the progress that will be pulled forward because of the 2018 deadline and we need to spread the word to each other on a daily basis of how good things are here on the Gold Coast and how good they will be for the next decade. Negative energy has been in the air lately and it breeds like bacteria! This should be replaced now with positive energy, contributed by each and every one of us to create a collective positive and pro-active environment of winners and visionaries who are prepared to lead the Coast through a serious phase of positive change.
Be a part of it!
