Preparing Your Business for the Festive Season

Tis the season to be jolly – catching up with family and friends, good food and fine wine, and a well-earned rest. But spare a thought for business owners and managers who, in the current age of uncertainty may be more jittery than joyous. Here are some tips on how to take some of the uncertainty out of the next couple of months.

As we head into the Christmas season, it appears that we are receiving the usual mixed messages on economic outlook and the future. We have heard that retail is improving, the mining boom will recommence in March/April 2013, governments will start spending in March/April 2013 and good times will return.

But is this realistic, and what will cause this change?

Let’s consider the facts:

  • Business turnover, except for retail, will reduce as Australia goes on holiday from mid-December
  • There will be a Federal election next year and elections affect spending patterns
  • Europe will continue to be stressed
  • America may or may not fall off the fiscal cliff
  • The position of Asia and particularly China is unclear
  • There will be political and religious conflict
  • Retail and construction has been depressed for some time and now some businesses in the mining sector are feeling the pinch and have commenced to downsize.

These factors are outside our control, so we are wasting our time if we focus on them, rather than what we can control.

Business owners and operators need to adopt a proactive approach to stress test how robust their organisation will be to changed circumstances, in order to find the breaking point.

Now is the time to ask Stress Testing questions such as:

  • What happens if interest rates rise by 5%?
  • What happens if the AU$ drops 20%?
  • What happens if your turnover drops 20%?
  • What happens if your turnover increases by 50%?
  • What happens if debtors slow their payments by 10 days?

Questions like these, tailored to your business and industry, can tease out responses to various scenarios.

Stress testing your business enables future scenarios to be evaluated, and internal contingency plans can be put into place.

When we control our actions, and our responses to external factors, stress level are reduced and creative solutions are usually discovered.

In my former life as an insolvency practitioner I saw stress paralyse the thinking and reaction of management to relatively minor problems.

Stress testing is a way of reducing destructive, non-thinking, reactive behaviour patterns with considered preplanning which reduces business risk and stress.

So before Australia shuts down for the holiday season, why not tick stress testing, along with the usual maintenance overhauls, off your to do list.

Vantage Performance is a leader in sustainable business improvement, winning national recognition in 2008, 2009, 2010, 2011 and 2012.

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