Right now we’re seeing a lot of headlines asking “is it really over?”, as economists call an end to the worst of the financial crisis.
For small and growing businesses these headlines should be a strong prompt to stop, take stock and start thinking about how you can best position your business for the rebound.
By way of explanation, we launched Mozo in October 2008, which history will show was when the financial world was imploding. This week I asked a friend who has a very senior role in a ‘Big Four’ bank just how close we got to genuine disaster, and watched his pupils dilate as he simply said, “very”. I then asked if the big banks really think it’s over and he gave a categorical “yes”. If the banks are now planning for the recovery phase, the rest of us should be too.
So if it really is all over, what now? How can we take advantage of the current state of the world, to get set for the next phase of growth?
In terms of your business finances, there are two main areas to act on right now. Firstly, take advantage of low interest rates. One thing that everyone now seems to agree on is that we are at the bottom of the rate cycle. So review your business financing and lock in fixed rates where you can.
Next, use the bottom of the cycle to negotiate great deals on your biggest business costs. Remember that if you’ve been hurting, so has everyone else. And there’s no better time to negotiate than when the other side of the table is hurting.
In our case, our biggest cost (other than staff) is our marketing. A downturn can actually be a great time to advertise as space is cheap. While publishers are feeling the pain, we’ve been locking in long term advertising deals before the market picks up.
The winners in the next growth phase are going to be the businesses that shake off the crisis and pick themselves up the fastest. So, which camp are you in – still sitting around or picking yourself up and looking for opportunities?
Rohan Gamble is the Founder and Managing Director of independent finance comparison website Mozo.com.au – helping Australians compare loans, credit cards, savings and other banking products.
