Don't Panic!
Welcome to this my first blog. Over the coming weeks, months and years I hope to entertain, inform and give you my opinions as they relate to OMBs (Owner Managed Businesses). So there will be no discussions on the latest management techniques. For most OMBs such things are far too theoretical to be implemented easily into their daily world.
So what to start with. Well the topic for this first blog was actually quite easy as many of the conversations I’m having at the moment relate to the historic referendum resulting in our decision to leave the EU … or maybe not depending upon whether there turns out to be a second referendum (then a third?!). I won’t comment on the rights and wrongs and whether we should or shouldn’t be in the EU. There are many opinions on this and much vitriol about the good and bad of Brexit. But as with so much written and spoken by the media and political classes I think it is all overblown.
Indeed I would stress that the world has not ended. Whether the world (or at least the UK) will be a better place post Brexit will take some time to determine and will probably never really be known as you can’t go back in time and choose the other path. But my advice to all my clients at present is very simple. Don’t Panic. And unless there is an immediate change in your business situation do not change what you are doing because of Brexit. Now, obviously there will be some for whom the uncertainty is more worrisome than others. However for most OMBs I promise you nothing much has changed.
With the media bombardment you could think the apocalypse was upon us. They use words to describe falls in the FTSE such as “plummets”,” crashes” and “meltdown”. Daily movements in the FTSE have little or no impact on the real economy. The news is only ever about extremes. The sun rose in the east and set in the west again doesn’t grab the attention. So the media never comments on the normal and just resort to apocalyptic or utopian headlines. Extremes like these just don’t happen very often – if ever – so just don’t pay too much attention.
The value of the pound could have a short term effect in some areas. Thus, if you have foreign purchases and can’t pay in pounds sterling then your costs may have just gone up. Basically imports could become more expensive. But the converse is true too and our exports are more competitive and it improves our tourism industry. Effectively it is just one big balancing act and no one can tell you what the overall net gain or loss will be to the economy as a whole. But sure if you are about to change up some Euro’s for your holiday then possible you are going to be £50 or £100 worse off. This is sad but in the scheme of things just accept it (there is nothing you can do about it anyhow!) enjoy your holiday and forget it. Next year who knows what the exchange rate will be.
And remember that some of the things that will be blamed on Brexit are nothing to do with it. Take Petrol companies who will put up prices on the pretence that oil is priced per barrel in US dollars. In my opinion this is just an excuse and had we voted to remain I wonder if they would have had a different reason! I wouldn’t be surprised if within the next 12 months they are announcing records profits … again! Petrol companies, like energy companies, are very good at using any reason they can to increase prices. But they rarely seem to come down do fast when the opposite happens. I can’t entirely blame them for this. If the rest of us could get away with it maybe we would do the same too!
Overall it is my firm belief that for 99% of you this whole ‘historic’ movement will make little or no difference. And the other 1% will be equally split between the winners and losers! There is just one caveat. We could talk ourselves into a recession. I don’t believe we will mind you. But the economy is just a confidence trick. If people are worried they don’t spend money meaning business are less profitable meaning job losses occur meaning less money is spent and so on. This is the reason politicians usually go through verbal contortions to avoid saying the R word so that it doesn’t get reported by the media and become a self-fulfilling prophecy. But politicians also don’t like to admit they are wrong. So in this case the ‘remain’ supporters don’t always want to believe that everything is ok. So they can’t help themselves and want to mention all the potential problems. Again don’t pay them too much attention! I should say that I understand that they may have concerns. But constantly going on about it doesn’t change anything. At some point you just have to get on with the situation as you find it, rather than wishing it was different!
Of course all this uncertainty can be unsettling and it is not always clear what to do for the best. But, as a business person if you want to keep on top of things I highly recommend reading my next blog. I will introduce you to the start of our unique ‘Insight with the Numbers’ system designed to help you improve and grow your business by getting handle on the numbers.
So until next time … just remember: Don’t Panic!
Justin