Smart companies will soon know which form of government will be run by Treasury in Australia and have 60 days to know whether the Obama administration is going to be the latest victim of elector volatility in their mid-term elections. As indicated in earlier columns, smart companies will prepare contingency plans for their operations in the rest of the financial year to cut costs of doing business, paying more for labour and thinking creatively about ways to reach beyond their domestic market.
Obama, speaking in the White House Rose Garden, said his economic team is “hard at work identifying additional measures that could make a difference in both promoting growth and hiring in the short term, and increasing our economy’s competitiveness in the long-term. The President has reason to worry, as 46 states are facing financial crises, staff layoffs and in the case of California, a debt and deficit problem that results from a total political standoff within the Republican machine that cannot decide if it wants everything to go into a meltdown or just stop stimulus packages in their tracks.
The Barack Obama and Ben Bernanke show is desperately trying to jawbone the US economy to survive the next 60 days in the absence of any silver bullet that will kick-start the dying engine of the stalled domestic economy. Another stimulus boost to reinforce the productivity returns for jobless growth will need to build courage to take on labour, rather than continue to prop up failing banks and big businesses that rely on tax breaks to appear to be contributing to domestic growth rather than living off emerging markets.
Voters around the globe are divided into three camps – those who have stashed their cash in bonds, those that have gone long in the equities markets and those that are hanging onto their jobs and paying off their homes. Smart companies will therefore use the next three months to prepare marketing plans that are targetted at two out of these three consumer markets and get out of the others.
The key is to have a very clear primary market, such as affluent women in double income households with no kids that are preparing to spend on deferred consumption goods and services, and a strong basic commodities market such as home renovations or holiday travel.
Gary Morgan says: “Consumer confidence fell 1.3 points to 123.3 the week after the Federal Election, caused by fewer Australians (40%, down 6%) saying they expect ‘good times’ for Australia as a whole over the next five years and a falling number of Australians (52%, down 3%) saying now is a ‘good time to buy’ major household items — the lowest for more than three months, since May 22/23, 2010.
The reality is that fiscal policies will make it hard to get funds, unless small business can demonstrate that it has the business plans and staff capacity in place to focus upon capital expenditures that is tightly segmented, to reach new audiences which have access to the dividends that flow from the mining boom and the bribes to the independents who will vote in our next government.
The private sector is only beginning to take up the running with longer term investments outside of the mining boom and expect that the RBA will raise rates in October or November, so they are adopting a wait and see until next calendar year appraoch.
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Dr Colin Benjamin is an entrepreneurship and strategic thinking consultant at Marshall Place Associates which offers a range of strategic thinking tools that open up a universe of new possibilities for individuals and organisations committed to applying the processes of innovation, creativity and entrepreneurship.
Email dr.colinbenjamin@marshallplace.com.au
Contact: CEO Dr Jane Shelton, Phone +61 3 9640 0099
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
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