Edition 456 – Refreshed & Ready

Happy New Year. May 2025 bring you and your family, good health, much happiness and great success.

As I’m wont to do at this time of year, here’s how I think the year is going to pan out:

Politics – we’ll end up with a hung parliament after the next Federal Election due in May. The current government cannot win a majority, when they’re only polling 30% of the primary vote. They may entertain the prospect of governing in coalition with the Greens, however that itself could end up being a significant issue of compromise that even Labor isn’t prepared to go down the road of. This year will be fascinating in politics.
Interest Rates – aren’t coming off the boil anytime soon. International pressures, in particular, Trump 2.0’s mantra of imposing tariffs on imports into the US, will only drive retaliatory actions from those countries likely to be impacted, which in turn will drive inflation. It’s Corn Flakes economics, and it’s going to be costly for lots of exporting industries, and nations.
Unions – are heading for your workplace. The Government’s IR changes in this term, where they’ve now given unions the right to enter most small and family business workplaces, and check out what’s going on, is something that the majority of employers have never had to contend with. Ostensibly, it’s about checking on the welfare of workers, both financially and from a health and safety perspective. Under the radar – it’s a recruitment drive to turn around the abysmal level of union membership in this country.
Selling your business – if that’s likely to be in your plans for 2025, you may need to discount the sale price by anywhere between 25% and 40%. From what I’m seeing recently, business owners have inflated opinions as to the value of their business. Whilst the numbers might stack up, you may find that no one is willing to pay the price you’re after.
The Banks – are not going to get any easier with lending. I’ve recently heard of a potential business owner who was approved for finance for the purchase of an existing business, only to be told that one of the conditions of approval, was repayment of the loan in 4 years. That’s outrageous, and would have made the business cashflow negative at the end of the repayment period, and the labour return to the potential owner, not worth the effort.
Business failures – will increase. Some are operating on very tight margins, and in some industries, barely making wages, let alone a profit return to the owners. Post COVID, it was players in the building and hospitality industry that were most at risk of falling over. It’s now permeating the wider market, and no industry is immune.
Planning – is the key to not only the success of your business, but helping you to identify where the bumps in the road might pop up. In 2025, with the volatility in the domestic economy and with international affairs at seemingly unprecedented levels of fracture, having Plans B & C, to back up Plan A, are more important than ever.
Investment in your people – will need to increase, substantially, for most businesses. Training and development is seriously underdone in small and family businesses, and for a number, that’s now bearing itself out with examples of poor customer service and substandard production quality. There’s a baseline that many businesses have dropped below in terms of training their staff, and it requires a significant overinvestment in 2025 to get things back to where they need to be.

I’m confident for 2025, for those businesses that make the time to plan their future, then analyse their performance to see how it stacks up, and tweak things along the way. The old days of opening the doors and waiting for the customers or clients to rock in are well past us. The world has changed considerably, and understanding all potential eventualities and how that impacts your business, are critical to achieving the results you’re after.

This Week’s Tip

“Happy New Year! Buckle up – it’s going to be an interesting ride.”