Time to take stock

First Australia was hit with floods and a cyclone. Then New Zealand was hit by an earthquake. Now Japan, our second largest trading partner with $59 billion in trade, has been brought to a standstill by an earthquake, a horror tsunami and now a potential nuclear disaster.

It’s simply been an awful start to the year and for any entrepreneur that has been touched by these tragedies, business worries are put well behind human ones.

At this early stage, assessing the short-, medium- and long-term impacts of these disasters is extremely difficult.

For example, it will be weeks or even months before the 3,300 Australian businesses that export to Japan will know how their trade will be affected. Right now, with rolling blackouts and other disruptions to essential services, it’s a matter of making sure operations are safe, protected and stabilised. It will only be as recovery and rebuilding efforts get under way that these entrepreneurs will be able to get the information they need to make decisions on their own businesses.

But even businesses not affected by the natural disasters should stop and think about the potential impacts.

Supply chains may be impacted, particularly as Japan’s ports have been crippled.

Raw material prices might rise, firstly due to product shortages and then due to demand in areas which are being rebuilt.

Some customers may be affected, particularly in globalised sectors such as manufacturing and fast-moving consumables.

It’s prudent at this stage to find out what you can, and be as prepared as possible.

Even you are not directly affected by these tragedies, it’s also worth remembering that they may have something of a psychological impact on already battered consumers.

As Patrick Stafford reports today, advertising executives believe consumers are being impacted by a “silent fear” that the economy is not travelling well – the horrible images we will see in the media in the next week will do nothing to improve the mood of Australian households.

The fragility of consumers, of global economies and of many individual sectors is likely to remain in place for some months to come.