As we move closer to the end of another year, many of us will be thinking about what we can expect from the year ahead.
It’s no secret that 2024 has been a tough year for many Australian businesses and households, and it seems this may continue at least into the first half of next year. There are a few key factors contributing to this: our ongoing battle with inflation and interest rates, both our own government and US government uncertainty, and a worsening housing and labour shortage.
However, with that all being said, there remains more opportunities than ever for businesses to adopt new technologies to improve and streamline their operations.
CAFBA Broker of the Year Finalist
Before we begin diving into the newsletter, we want to say a big thank you to our amazing team and a huge shoutout to our customers, referral partners, and financiers for your support over the past year.
We were incredibly proud to be named a top 3 finalist in our industry for the CAFBA Industry Awards -Broker Firm of the year.
Inflation and Interest Rates
While other countries have started to reduce interest rates, Australia has been slower to follow suit. This delay is not unexpected, given that we increased rates later than many other nations.
Looking ahead, what can we expect from interest rates over the next year?
Long-term interest rates, particularly the 3-year Swap rates, provide a good indication of market expectations. These rates dropped from 4.2% in June 2024 to approximately 3.5% in September 2024. However, the past month has seen a rise back to 4.0%. This suggests that the market does not anticipate rate reductions to be as swift or significant as previously expected.
Despite higher for longer interest rates, it seems the Australian economy has remained steady. Many banks are reporting low mortgage arrears, and employment data remains strong.
Government Impact
While investigations into politicians’ travel perks may hold some importance, we believe that government focus should be on more productive areas. Australia’s three levels of government often create economic obstacles through unnecessary red tape and conflicting opinions, making it challenging for businesses to operate efficiently. Some of the simple yet key issues our customers regularly face include obtaining power connections, council permits, and dealing with payroll tax.
The housing crisis remains unresolved, with little prospect of a near-term solution. Government spending on infrastructure, while necessary, contributes to inflation and diverts resources that could be better used to address the housing crisis. On a positive note, there are still some government grants available to businesses, provided you have the resources and persistence to secure them. If you need access to the right experts, let us know.
US Election
Whilst the US Election has been run and won, the impact on Australian businesses remains uncertain. No doubt Trump’s policies on China, Russia, Israel and the outside world are different and the flow on effect to Australia will play itself out over time. Regardless of what transpires, maintaining strong US-Australia ties will be crucial for our economic prosperity and stability.
Business Outlook and Cashflow Tips
The business outlook for the next year appears similar to what we experienced over the past year. Here are some cashflow tips to help you navigate the coming months:
- Finance assets instead of tying up cash.
- Utilise working capital facilities to bridge any cash flow gaps.
- Avoid ATO debt at all costs. The ATO is continuing to crack down on debt, and there are better options for managing cashflow.
- Reach out to us to ensure you have the best finance solutions at your fingertips.
We are here to support your business with expert advice and tailored financial solutions. Please don’t hesitate to contact us for any assistance you may need.
The Rise of Business for Good
Here’s an interesting summary of an article we came across recently.
John Elkington’s three additional P’s—People, Planet, and Purpose—have transformed some business operations through the concept of The Value of Social Enterprises. In 2024, Australia has over 12,000 social enterprises, with 500 certified. This number is expected to grow by 16% annually. Social enterprises have generated $843 million in revenue over six years, projected to reach $5.5 billion by 2030.
What are the benefits of Purposeful Business?
Research is positive and shows that businesses with a Social Profit Orientation (SPO) benefit from attracting talent, competitive advantage, innovation, and stronger stakeholder relationships, enhancing profitability.
Here’s a link to the article from ABC: https://www.abc.net.au/news/2024-04-22/good-business-as-social-enterprises-help-deliver-jobs-hope/103686300
To finish with some positive Brian Tracy quotes:
“The most important word in sales is the word ‘ASK’. Ask politely, ask confidently, ask warmly, ask charmingly. But ask for what you want. Ask the customer for the order today. Ask or invite the customer to buy. Ask them why they’re hesitating. But don’t be afraid to ask. Remember, before you ask the answer is probably no. If after you ask the answer is still no, you’ve lost 10 seconds of your life. So don’t be afraid to ask and the more you ask the more confident you will become and the more sales you’ll make.”
“Harvard Business School concluded a few years ago that selling in the 21st century would be Relationship Selling and success in business would be based on relationships. The very best salespeople are the ones who form the very best relationships with their customers. They make it clear to their customers that they like them, and they care about them and they ask them questions to understand them better. Your very best customers are people that you like, and they like you. 85% of your recommendations and referrals will come from people who like you and feel good about you. So, focus on the relationship and the sale will take care of itself.”
We are here to support your business.
Please speak to us about all things finance. Whether it be Equipment and Automotive Finance, Working Capital Finance which includes Debtor and Trade Finance, Property Finance including Construction Finance, Insurance Premium Funding. And yes, we also do Home Loan Finance.
We know that banks are becoming more selective and treating business customers worse than ever – please make us your first point of contact every time – we will get you a better outcome with a far better experience.
