Management Memos

Making Measurably More For You Since 1985

June 2016
 

How Will Your Business Look in 2017?

EOFY seems a million miles away this year. Are we distracted by the election just after June 30? Perhaps our fiscal and financial information is so confusing, we can't see where we're going? Or is it something else? Even so, it is FY2017 budget time. This review might help you build that budget!


Focus Your Budget on Your Intrinsic Strengths

When all the lights are green, it's easy to go ahead smoothly and safely. Right now, though, our economic numbers look like traffic lights that are red, green, and amber - all at the same time.

Traffic JamInflation is low - too low. Inflation is caused when there is not enough supply to meet demand. So, when there is room for a market to grow, there will always be inflation. That's what gets new suppliers into the market. In Australia we need about 3% inflation to grow strongly and in a controlled way. With our current inflation of around 1.3%, we're just not growing enough. There's not enough 'unmet demand'!

Interest rates are at record lows. But strong industrial investment is not needed because the world's economies are flat, and new capacity isn't needed. These things look like red lights when trying to predict the future of your business.

Then there is the red light of low consumer confidence, that stubbornly refuses to rise. Against this, there is a green light from big name retailers who report strong retail sales growth. Some leading fashion stores are seeing sales and profit growing at rates most of us only dream about. Everywhere we look, we see the green light from a strong building and construction sector.

The amber light comes from a glut of apartment buildings, which, allied with concerns about a housing bubble, points to a 'hard landing' being a real possibility. It's the kind of hard landing that could hurt all of us.

These conflicting signs make business planning really confusing. It's like driving into an intersection with red, green, and amber lights flashing! As you address your own budgeting process, remember these points:

  • The ice is very thin for business this year - so go where you know. Play to your strengths
  • Budget for strong cash performance. Emphasize cash in your planning, before profit
  • Get all parts of your business firing together. Don't allow your strong performers to be pulled down by under-performance elsewhere, and
  • Invest in your customers - there will be other years to invest in new facilities and equipment. (continues)

These guide posts can lead to a great plan for this year, with growth that really is sustainable.

You'll build a strong base for growth in the following year. If the amber lights do turn red, you'll be in a very resilient position!

'My Red Zebra' financial tools were built twenty years ago to help in just this year's kind of predicament.


 

Management Memos - Returns to Help SME's Once More

Principal ConsultantIt is already three years since ‘McNicol Williams Management Memos’ was last published.

Lots of people loved ‘Management Memos’ for its compendium of the latest management thinking for small and medium business. It kept readers up-to-date with changes in our business environment, and suggested a fresh way each month to advance your business. Why did we stop?

Unfortunately, it grew too big. We covered all kinds of marketing issues, retail merchandising issues, and pricing and profit issues. We covered staff productivity and expense reduction - all in the interests of increasing the return on investment for those who work hard in their own businesses.

But times change. It's not that business is getting easier, or that publishing this kind of information is less time consuming. It is that in this connected world, we all need a ready access to useful information, accessible in that spare minute we can spend a moment to seize an idea.

With our websites now all 'responsive' - that is, optimised to read easily on all kinds of connectable devices - we can bring back 'Management Memos' in its original, more focussed form. Just click and read it whenever it's convenient.

With a readily searchable, and growing, (with each issue) library of topics adding to its usefulness, it's easy to go back, and keep going back, to matters which hold your interest.

So 'Management Memos' is back. Different, more accessible, and we hope, better!

 

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Any advice, information or comment contained in this document is general in nature, and should not be relied on as the basis for any specific commercial, business, employment, or financial decision. Specific advice should always be obtained for each individual circumstance. Accordingly any advice, information or comment contained herein is for general guidance only.

 

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