Now we are in March I have to stop wishing a “Happy New Year” to our clients, as we are almost a quarter of the way through the 2018 calendar year.

Recently, I have been thinking about how business conditions reflect what sort of environment small business and property investors are currently experiencing. Most of us will have parents or grandparents who grew up in the great depression – this was an era where unemployment reached 30%. This was followed by the Second World War. Although times were upbeat in the 1950s and 1960s, memories of the great depression still loomed in the forefront of people’s minds. In fact, with my own grandmother, I remember that up until her death in the early 1990s, there was always the attitude of not having debt and not taking risks.

Although the attitudes to debt are very different in these times, I believe that there is still a fall-out from the Global Financial Crisis (GFC), which is still haunting many of us.

The following can evidence this:

1. Although interest rates are at record lows, banks are very reluctant to lend to business and businesses are reluctant to expand.

2. Even though small business has generated most profits in the economy since 2003, they are unwilling to pay wages that are more substantial as most businesses have struggled to some extent during the GFC and have a similar attitude to those in post-depressions years in that you never know when there might be another GFC around the corner.

3. Given wages are growing at a very slow rate, rentals for properties are also growing at a very slow rate. I used to expect, with my own investment properties, that I could achieve 5% growth each year. For some of my properties over the last 10 years, growth has averaged less than 1% per annum.

What do we do in response to this ‘new’ conservative attitude? My view has always been to be proactive and acknowledge that a healthy sense of the fear of going broke helps you to keep reinventing yourself and your business. I wanted to share a few thoughts from recent business meetings that may be useful for you in adding clarity to what you are trying to achieve your business, whether that is in your own small-medium sized business or your rental property business if you are a property investor.

1. Identify what your core businesses are. I had a recent client meeting where we identified that the client had four (4) core businesses which included a property business (they had not previously recognised that they had this ‘business’).

2. With your core businesses, what side businesses could be created to supplement this core business? For example, if you had a hire business, could you add sales of parts, maintenance and other third party sales to your business?

3. In identifying your core businesses, will you be disciplined enough to make business decisions that will only supplement your identified core businesses.

My view is that in todays’ environment you need to be able to succinctly identify your core businesses and what falls outside the parameters of what you are prepared to do. In this environment with business conditions evolving so fast, the more that you can clarify your path, the more chance that you have of surviving and growing.