Edition 219 – Ramping Up
Yesterday afternoon, the Reserve Bank Governor, Dr Philip Lowe, gave his sober assessment of the impact of the coronavirus outbreak on the Australian economy:
- The economy will shrink by 10% in this first half of 2020.
- Australia will experience its first recession in 29 years and our worst economic hit since the 1930’s Depression.
- Unemployment will hit 10%, double what it was in February.
They’re horrible numbers and statistics that prove what a wrecking ball through the economy COVID 19 has been. However, the outstanding work undertaken by our Governments and Health professionals in going early, enforcing strict conditions and containing the virus means it could have been a lot worse for Australia. The Job Keeper programme in itself is predicted to have stopped unemployment from rising to 15%.
The fact there is not merely talk about suppression, but indeed eradication of the virus in Australia, speaks volumes for our strict bio-security measures and, fortuitously, the fact we are an island.
Along with Dr Lowe’s grim immediate outlook, he also posited this – that Australia’s economy will bounce back in 2021 anywhere between 6 and 7 per cent. If the RBA Governor is so confident to publicly declare the likely 2021 economic outlook so early, whilst we are in the middle of a lockdown scenario, then it speaks volumes for what he and the economic boffins know and understand about the underlying elements and strength of Australia’s economy.
For family business owners, that means you need to be preparing for two scenarios:
- Strict and astute stewardship through the next few months.
- Buoyancy through the back end of 2020 and into 2021.
All of this points to the very heart of what each family business does – what the strategy is for each and every business. Never before has it been so important for businesses to understand:
- What we do?
- Why we do it?
- How we do it?
- Can we do it?
- Should we do it?
- What aren’t we doing that we should be doing?
- How do we make money out of it?
- Who do we market to and how do we market to them?
- Do we have the right people and right skills to do it?
- Do we have the right technology to do it?
- Are our internal processes robust enough to bring us out the other side?
- Do we have the right financing in place to ensure we manage debt, build profits and recapitalise our businesses impacted by the wrecking ball?
Up until now, most family businesses owners are, unfortunately, too lazy or too short sighted to stop and think for a minute (or a day) about what their business should look like next month, next year and in 5 years.
With all we have been through to date and will continue to go through over the coming months, you can no longer unlock the front gate, throw up the roller door, switch on the machines and keep doing what it was that you did yesterday. Everything has changed in the business space – which means the thinking, planning and implementation must also change.
This Week’s Tip
If you believe you will be doing the same thing in business in 1 year’s time that you were doing 1 year ago, you haven’t learned the lessons of what has changed in our world, forever.