The new norm? There is no new normal; things keep changing.09.11.2023
We have been here before.
The normal is constantly changing, so should you and your business.
Interest rates and inflation are currently the new normal. Subject to how long in the tooth you are, you may remember the last couple of economic downturns.
My first memory of “bad times” was as a child. My parents always had adult conversations at the dinner table. New Zealand’s economic prosperity was based on secure access to the British market and high international prices for wool, which garnered more than a third of our export earnings. In late 1967, the export price for wool fell by 30%, triggering rising unemployment and inflation.
My father was a butcher, and market prices and how much people had to spend were constantly discussed. It was a good thing I was rebellious at boarding school and came home to the local state school – saving him a load of money.
I remember paying 18% on a mortgage in the 80’s – and the music was wrong.
As expected, the Australian Reserve Bank raised the interest rate on Cup Day. It was expected, along with a drop in the dollar value, which would put up the imported prices on all that stuff we “need” to buy for presents.
My message to my clients
- Be aware of the costs of your business. Be a stickler for what things cost you and what return on paying wages and using your creditors get for you.
- As many of you are tradies, I am setting your benchmark at $140 minimum to $180 (of course, plus GST) an hour. Remember, as we move to AI – this can replace many of what professionals do (they all will become obsolete), but I don’t see AI managing a pipe wrench, pipe bending, or completing a half-lap joint any time soon.
- Know your material costs and markup. Make sure you have variations in your quotes to allow for delays in acceptance of your quotes.
- Make sure you do credit checks and get paid.
Large business tends to treat small businesses as a lost leader line. But trust me, your skills are needed, and don’t give anything way, especially your time.
Adjust your business accordingly and work for those who will pay in our new “norm” of inflation and interest rates.
Please, if you want to discuss how to increase your price, then contact your client coordinator or accountants and let’s meet to help you with the tactics of your business.
Serviced by related company Fresh Number Pty Ltd