For many businesses, cashflow will be tight in the coming months as consumers and other businesses spend less due to the combination of:
- higher interest rates,
- the impact of the Ukraine war on freight and fuel
- supply constraints on gib, steel, and timber
- China’s approach to Omicron
- inflation hitting council rates, insurance, food prices and commodities like copper,
- a tight labour market with young people heading offshore
- stressed developers and contractors and failing businesses, and
- Omicron’s impact on foot-traffic count equates to lower sales, while sickness equates to labour shortages, which equates to lower productivity.
The emergence of inflation or rising expectations of even higher interest rates is a wakeup for businesses. Containing inflation will not be growth or asset friendly over the coming years.
Economic conditions are changing. ANZ’s Business Outlook Survey reports a net 27-33% of firms are expecting lower profits over the coming year. Costs are the big issue.
It’s time to reset and reconnect with staff, customers, and suppliers – many of who you haven’t seen for some time.
In an environment where economic conditions are evolving firms need to adapt quickly, protect, or if possible improve profitability, by reducing costs. At a minimum, protect the downside.
Like a Gazelle escaping a Cheetah, every hour of every day businesses need to be alert, fleet of foot, and able to change direction instantly.
If you would like to discuss specific strategies that work please get in touch.