Time to circle the Wagons

All markets are driven by 2 factors – fear and greed.

Currently with all the talk of gloom and doom in the financial markets, fear is the overriding factor with a sense of panic gripping many operators. The latest overnight pronouncements from the IMF that global economies are entering “a dangerous new phase” will further add to the sense of unease felt by many.

 Now is the time to remain focussed and consider the implications for your business.

Just as was evidenced in the Summer of 2008 there is a question mark over the manner in which the Banks will respond to the current inputs. The problem for the Banks is that because of the legacies of their previous mistakes they are effectively stifling their customers businesses as they look to batten down the hatches.

It will become increasingly difficult to gain support from the Banks in the coming months therefore it must be the absolute priority to keep a strict rein on your finances – make sure that your Debtors Book is strictly controlled and ensure that Stock turn and inventory levels are well policed.

With their own houses far from in order (think UBS), the Banks will undoubtedly become even more negative in their approach to lending, so the order of the day is work within your current limits and maximise returns.