With Federal and State elections looming, it’s worthwhile talking about how the wider social and economic environment affects your business.
If you think that you’re just a small business owner, serving your clients, and earning a living, think again.
The fact is that we live, and operate our businesses (no matter how big or small) in a connected global marketplace, and changes in the local, national and global environment can have a significant impact.
Elections are one thing – we can pretty much be guaranteed new or reformed taxes across a number of areas. Employment standards and conditions may change too. Government grants, concessions, rebates … regulations around superannuation, the list goes on.
You know these may be coming, have you worked out how they impact you? Is the impact likely to be good, bad, neutral?
Not all changes are negative, but even if there seems to be the potential for negative effect, it’s possible, with the right attitude and planning, to turn the situation around, into something more fortuitous.
However, changes are not always readily identifiable. Let’s look at the example of the Opel Tower in Sydney which started to crack on Christmas Eve. It is not just a tragedy for those homeowners and renters involved. And no one could have predicted this particular scenario, but its effects will be wide-reaching. It’s likely to have implications for the property development and construction industries, and possibly even the real estate industry, particularly around disclosure if any tower apartments are put up for sale in future.
Currently, in the property market a ‘buyer beware’ attitude exists, with the onus on the purchaser to complete any pre-transaction due diligence to their own satisfaction …could this change? Strata Management could also potentially be impacted.
Undoubtedly, when the experts get to the bottom of why the building showed signs of instability, those identified as responsible will be held accountable. And then, in order to avoid the same kind of mess occurring in the future, and to offer better protection for apartment dwellers, there are likely to be new laws and regulations – which could also have broader impact for those businesses which manufacture and supply building materials. Potentially, too, there will be an impact on businesses involved in engineering design and certification.
“In any industry, there’s a significant number of core players, and often an even larger group of fringe-players. Significant changes have the undeniable potential to affect them all, in very different ways,” explains Michael.
Another recent example is the Royal Commission into Finance and Banking. While the focus has been on larger lenders, let’s not overlook mortgage brokers and financial planners who make up a significant chunk of small business in Australia. It’s entirely possible they will be impacted by any changes that are recommended by the Commission’s final report due to be released soon.
Another example is the recent introduction of new data breach laws which saw many small businesses right across the country face significant increases in technology costs in order to comply. How about the rise in popularity of AirBnb which law-makers in many countries are currently grappling to legislate, but who are acutely aware of the need for appropriate health and safety checks, as well as ensuring a fair-playing field for larger providers who say they’ve been adversely impacted by the home-sharing platform.
These are just a few changes that have had broader implications for Australian businesses in the past few years. There’s always something. Always: Weather events, climate change, environment protection, the international money market, new technology …. etc, etc, etc.
And it’s not always negative – it’s important to remember that change can be a remarkable opportunity, if it’s approached wisely and with a healthy dose of caution.
“In many ways, you have to become comfortable with a degree of uncertainty,” says Michael Mekhitarian.
“Even if you see potential change coming, it’s not always appropriate to tackle it too early. Early adoption can unfortunately be costly, late adoption can be deadly. Timing is everything.”
Risk Management is one of the most difficult aspects of business management. It is often is better handled by a team, rather than solo – different perspectives and different ideas are crucial to a productive outcome.
“Risk Management requires a combination of detailed analysis, creative ‘blue sky’ brainstorming, and process-oriented solutions-based thinking. This is where business advisors and mentors can really help you to you distil the issues, get to the crux of the problem, and then consider contingencies,” says Michael.
Michael also says that your risk management plan is not something you can ‘set and forget’.
“It’s imperative to keep abreast of current affairs, economic policy and social change. But look deeper than what you see in the news and challenge your own ideas. Take time out from the day-to-day for adequate planning. Find resources, like our 5-step process and free ebook to help you kick-start your thinking.
“It’s only then that you can truly understand your place in the market, secure it and future-proof it.
“And remember, nothing great ever came from staying in your ‘comfort zone’. Change is inevitable, how you react will be your measure of success,” he says.
If we can help, contact us.