Recession, you see, brings with it the prospect of downsizing, destaffing and strategic headcount reductions. Or, as Kevin Rudd put it in Federal Parliament last month: “We’re in the midst of a jobs consequence flowing from the global financial crisis.”

A jobs consequence? I think the formal definition is actually “to sack a lot of people”. And in troubled banking giant Citicorp’s case, some employees are to be placed in “career transition mode”.

Politicians’ seemingly pathological fear of plain speaking is not just an Australian disease. Consider this beauty from British Business Secretary Peter Mandelson, who was being grilled about the need for future tax increases to pay for the government trying to spend it’s way out of the economic mire: “I’ve already said that if you take action now to expand borrowing, then you know you have to make a structural adjustment later on.” God forbid the bloke just reply with a “Yes”.

The global financial crisis has brought with it a plague of euphemisms and truly incomprehensible jargon. The United States is using “quantative easing” as part of it’s drive to “deleverage” the financial system. In other words, they are printing money to wipe out bad debts.

Mind you, America is a place so embarrassed about bodily functions that waitresses will look aghast if you ask where the dunny is. You use a bathroom rather than go to a toilet. This beggars the reply, “But I want to use the toilet, not piss in the bath.”

Although politicians such as Pauline Hanson and Peter Beattie are often dismissed by the latte set, they enjoyed support from many quarters because they call a spade a bloody spade in plain English.

Sadly, in public life today, language is often used to disguise meaning and reality, rather than to impart it.

It’s a bloody shame. And yes, we are in a recession.

But just because your revenue might be under threat doesn’t mean it’s time to kill the marketing program and fire your most expensive staff. This is a short-term reaction to what’s going on that will, in the long run, do more to damage your business than help it. Instead, be proactive about protecting the income in your business and be aggressive about maintaining your market share.

Increase your marketing budget

The old adage goes that the marketing budget is the first thing to be dumped in a downturn. Although this might have been standard business behaviour in the past, it doesn’t cut it today. If you cut your marketing budget and your competitors increase theirs, what chance have you got of protecting your market?

So be really clever about marketing. There’s a lot you can do yourself – identifying new business prospects, for example. And there’s a lot you can do for free – it costs nothing to send out and follow up a press release, for example. The point is get cracking, because if you don’t your competitors will steel a march on your business.

Keep talking to your customers

Aside from marketing to new customers, make sure you keep talking to your old ones. Depending on the nature of your business, this might mean phoning them up from time to time just to see how they are going (aside from keeping in touch this is a great way to get information about what’s happening in your industry).

If you have a large customer base, put in place systems to keep in contact with them. Regular SMS or email updates from your business are a very cost effective way of reaching out to customers on an ongoing basis.

Watch your costs

A lot of businesses have already cut many costs from their operations, but there’s usually still more you can do. Could you change the firm that administers superannuation in the business and reduce the fees you pay for this service? Could you outsource some functions, for example bookkeeping, and free up an accountant’s time to work on growth plans? How could you better manage your energy costs to improve your carbon footprint and at the same time slash overheads?

In this environment it’s also very wise to keep tight control on petty cash. Every item in the business needs to be accounted for so you can work out what expenses help you make money and the expenses that are really just superfluous to your business.

Diversify your sources of income

A big danger for many small businesses in the current environment is too much reliance on one customer; often small businesses have one major account that makes up 80 percent of revenue, supported by a smaller number of clients that deliver 20 percent of revenue. If the big customer goes bust, your business is history.

If this is you, work very hard at driving revenue from other existing customers and creating new business opportunities. Doing this will stand you in good stead when economic conditions return to normal.

A final word – don’t sack your most expensive staff just to save money. You could find they are the ones bringing in the bacon and if you let them go, you may find your revenue drops dramatically.

The best way to keep your regular customers and find new ones is to remind them what you have to offer using email marketing.

Meanwhile, ordinary people are struggling to put healthy food on the table. The Russians are reverting to traditional red cabbage soup; the Irish to potatoes; and, as our economy sours and incomes are constrained, there is every possibility the amount of money spent on food will reduce and people will return to cheaper fatty food.

Health professionals are referring to this as “recession obesity” and a range of studies that link low incomes to unhealthy eating supports their concerns.

However, throughout the 20th century baked beans have sustained people through many a period of adversity, particularly of the financial kind.

As a true indicator of the impact of the global recession, baked beans sales worldwide have surged 12 per cent since August 2007. People resort to the humble baked bean as an affordable component of the daily diet.

Baked beans provide a very heap source of fibre and protein so it is not surprising people are increasingly turning to them for nutrition.

Australians eat 116 million tins of baked beans a year. They are ever-present in the Australian economy and according to a major retailer, they have a 92.5 per cent household penetration.

Since March 2008 sales have increased but so has the price. In Australia the cost of a standard tin of baked beans has risen by 5 per cent, which is higher than inflation.

Australian manufacturers source most of the navy beans used in baked beans from the US and Canada, and bean prices have risen by 29 per cent since last year.

Bean Growers Australia chief executive Mark Adamson said that the Australian production of navy beans would need to double this year to take advantage of a US baked bean shortage.

“This is an opportunity too good to miss,” he said, and it would help boost our balance of trade. With food prices soaring, many countries are suffering an unprecedented food crisis.

Japan may even be embracing the baked beans solution. A recent survey of 10,000 Japanese exchange students revealed many had acquired a taste for baked beans while studying overseas, and a leading British baked bean manufacturer is investigating Japan as a new export market.

If you run a small business, allow me to help you ride out the recession by showing you how to find more customers.

But don’t just blame the global credit crunch, the worldwide recession, or the crisis in confidence.

A retail seminar in Brisbane this week was told one of the main reasons retail’s former heavyweight champions have died or are flatlining is because they had forgotton the customer is in charge.

A power shift has been happening in the shopping centres, retail strips, wholesale outlets and home-maker centres of the world since the days when the marketing professionals told us what, when and where to buy.

The customer is king and doesn’t want to play by the old rules anymore. Business consultant Roy Tavenor told the Global Retail Insights seminar that the time when brands ruled the retail world was over.

In terms of consumer spending habits, the 1980s and 1990s have been defined as the era of the brands. It was a time when companies such as Calvin Klein could harness a controversial billboard campaign using a half-naked 15-year-old actress to launch a company philosophy that said: Follow us, we’re different.

“The customer of 2009 is the opposite of that,” Tavenor, the managing principal of retail architecture and planning firm Red Design Group, told the seminar. “They aren’t buying that at all. They aren’t driven by status. They want to see something that represents their values. It’s not all about conspicuous consumption.”

And the shopping centres of the future will have to represent those values. Tavenor’s claims were backed up by case studies provided by retail analysts from Monash University’s faculty of business and economics, which showed that old business practices, and not just a worldwide recession, are hazardous to the health of those in the retail game, particularly the bigger players.

“The old rules don’t apply. That’s how Woolworths in the UK died after 99 years of retailing history,” analyst Stephen Ogden-Barnes, from the Australian Centre for Retail Studies, said. “The main thing that customers missed when Woolworths was gone was it’s Pick and Save section, which is the lollies out the front. That was it after 99 years of retailing.”

The success of self-service checkouts in outlets such as Big W in Australia is more evidence that customers like feeling in control. “Customers were asked what they liked about it and they said it was because they felt as if they were in charge,” Tavenor said.

“Research shows that the primary reason people use self-service checkouts is because of privacy - they don’t like people to see what they are buying - and the second reason is control.”

The new customer, who wants value but not at the expense of quality, is also buying with their conscience and those changing values are being noticed by the world’s best retailers, including those at the value end.

Small to medium businesses need a system to keep them in constant contact with their customers to ensure they don’t lose them to a competitor down the track.

Not everyone has to descend into the perceived loss of confidence and self-worth that often goes hand in hand with the loss of a meaningful and fulfilling occupation.

Some are fortunate enough to get a wake-up call before they retire, and wise enough to heed it.

Some years ago I landed at Boston’s Logan Airport and got on the shuttle to the Hilton Hotel where I was teaching. The driver was about 65 years old, and the two of us were alone on his shuttle for the ten-minute drive.

I asked him, “How’s it going, sir?” and he answered,

“Everything’s great thanks.”

“Enjoy your job?”

“Oh yeah,” and he turned around with a big smile on his face and said, “but I’ve been here for many years and am about to retire.”

I said, “That’s great. You know, a secret of life is not to let your retirement get in the way of your work.”

He looked at me out of the corner of his eye and said warily,

“You don’t say!”

“Yes, I do. So what are you going to do when you retire?”

He answered, “Oh, I’m just going to take it easy and relax.”

I said, “You know, the statistics show that 18 to 36 months after retirement, many people die if they don’t have something to live for, something they love to do. What do you have that’s important to live for?”

He became quiet for a moment, and then said, “Well, I’m going to play some golf and do little hobbies and stuff like that.”

I said, “Little hobbies make little people. If you don’t have a purpose to live for that’s beyond your present life, your life dissipates. Productivity is one of the secrets of self-worth.” He nodded his head in agreement. “Nature never throws away old mechanisms; it just builds new ones on top. You never throw away what you’ve gained in experience because none of it was wasted. There’s no such thing as waste. Your whole life was filled with learning experiences to make you a greater being, to build the potential for a greater opportunity to contribute.

You have the capacity to be productive until the day you pass from this body.”
He became very thoughtful then, maybe even a little deflated.

When we arrived at the hotel, he got my bags and said, “You know, young man, you’re a very thought-provoking guy. You’ve really made me stop and think.”

I conducted my seminar and didn’t return to Boston for more than a year. But when I came back to the same hotel, guess who picked me up? The man was still driving the same shuttle, but there was something different about him: This time he wasn’t elated about quitting. He was just present with himself and his work.

As I stood behind him, holding on to the rail, I said,

“Remember me? You picked me up a year ago, and we had a conversation about your retirement.”

He looked in his mirror and said, “Oooohhh! Oh yeahhh!

You’re that guy! Let me tell you what happened after we met last time. That night, I went home and I was extremely depressed. I felt so down, in such turmoil, I was in a real identity crisis. That was a night of hell. I talked to my wife and told her what you said about little hobbies and death and life, and she got a tear in her eye.”

His wife had been concerned that this was exactly what might happen if he were to retire. Suddenly he became afraid of letting his wife down if he didn’t retire as they’d always assumed he would. But when he told her his new thoughts, she understood completely. Often a man takes time to learn what a woman’s intuition knows immediately. He told me that they’d had this conversation in bed, and she sat there with him as he just cried and cried, because all of a sudden he looked back at his life and woke up to the great question,

“What am I going to do? Is it possible that I would lose motivation and life without my work? Is this what I really would love to do?”

He’d thought about all the trials and tribulations of his life, his daily tasks and all the people he’d been able to serve at that hotel over so many years. He’d worked there for almost three decades, ever since the elevator had just been a little box on the inside of the building, and he’d seen the entire evolution of the hotel. He remembered all the friends he’d worked with and all the managers he’d served under, the whole mission of the Hilton, all the transformations, and all of the people, and he cried.

Just as dawn was breaking at the end of his dark night, he said to his wife, “I’m afraid that if I retire, something might happen to me, just like that young man said, and I won’t be able to spend more years with you. Honey, if I decided not to retire, would you still love me?” And she put her arms around him and loved him.

The next day he went to the manager and said, “I know I’m about to retire and we’re supposed to be having a party later, but if for some reason I decided not to leave, would I still have a job?

Could I still work here? Is it possible that I might not be too old?”

The young manager said to him, “I’ve only been with the hotel a short time, but from what I’ve heard, you’re a legend here. You’ve got a job as long as you live, my friend.”

At that moment, he realised he’d been buying into an illusion, an arbitrarily determined social delusion.

End of article.

Whether you intend retiring sooner or later, you need to leave your business in good shape. Take a look at my system to help you build a thriving business for now and into the future.

Costs were previously based on restaurant overheads and ingredient prices. But the multi-national fast-food chain is using socioeconomic factors to determine charges under a new “demand-based pricing” scheme.

Corporate documents obtained by The Courier-Mail shows McDonald’s Australia has identified an “opportunity to introduce more aggressive price increases” in 73 Queensland outlets.

Some of the stores include Logan Central, Loganholme, Arana Hills, Gympie, Ipswich City, Labrador, Inala Plaza and Morayfield. McDonald’s, which yesterday confirmed the price strategy, says “the price refinement takes into account individual factors that relate to each store…”

A McDonald’s franchisee, who asked to remain anonymous, said the biggest price rises were concentrated in low-income areas. “In general, the poorer suburbs will pay more,” the franchisee said.

The document says the system’s objective is for individual stores “to maximise the potential for a price rise” while minimising the risk that consumers will go elsewhere or choose a cheaper meal. The biggest price rise will be for children’s Happy Meals, which will increase by 16.5 per cent from $4.25 to $4.95, at all locations.

Other items will rise in two stages by between 1.8 per cent and 3.3 per cent, depending on the location of the restaurant. The first stage has already been implemented, while the second stage will occur in May.

McDonald’s corporate communications manager Bronwyn Stubbs said the company developed prices according to “established research techniques” and these were recommended for company-owned restaurants. The most recent “refinement”, which considered price factors relating to each store, was to align with the company’s “global practice”.

Choice spokeman, Christopher Zinn, said he was surprised McDonald’s would raise prices during tough times. Mr Zinn said families looking for cheap meals should consider alternatives to fast food.

Would you like to capture some of McDonald’s customers and sit them in your restaurant instead? I can help you achieve this by using my online marketing methods.

There have been rumblings around the office about the future of this company, and more specifically, your job. As you know, the economy has changed for the worse and presents many challenges. However, the good news is, the economy doesn’t pose a threat to your job. What does threaten your job, however, is the changing political landscape in this country.

Consequently, let me tell you some little titbits of fact which might help you decide what is in your best interests.

First, while it is easy to spew rhetoric that casts employers against employees, you have to understand that for every business owner there is a back story. This back story is often neglected and overshadowed by what you see and hear. Sure, you see me park my Subaru Outback outside. You’ve seen my big home at last year’s Christmas party. I’m sure all these flashy icons of luxury conjure up some idealised thoughts about my life.

However, what you don’t see is the back story.

I started this company 28 years ago. At that time, I lived in a 2 bedroom flat for 3 years. My entire living area was converted into an office so I could put forth 100% effort into building a company, which by the way, would eventually employ you.

My diet consisted of baked beans, stew and soup because every dollar I spent went back into this company. I drove a rusty Toyota Corolla with a wonky transmission. I didn’t have time to go out with women. Often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business - hard work, discipline, and sacrifice.

Meanwhile, my friends got jobs. They worked 40 hours a week and made a modest $50,000 a year and spent every dime they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. Instead of hitting the David Jones for the latest hot fashion item, I was trolling through the discount store extracting any clothing item that didn’t look like it belonged in the 70’s. My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money, and my life into a business with a vision that eventually, some day, I too, would be able to afford those luxuries my friends supposedly had.

So, while you physically arrive at the office at 9am, mentally check in at about noon, and then leave at 5pm, I don’t. There is no “off” button for me. When you leave the office, you are done and you have a weekend all to yourself. I unfortunately do not have that freedom. I eat and breathe this company every minute of the day. There is no rest. There is no weekend. There is no happy hour. Every day this business is attached to my hip like a one year old special-needs child. You, of course, only see the fruits of that garden - the nice house, the Subaru, the vacations… you never realise the back story and the sacrifices I’ve made.

Now, the economy is falling apart and I, the bloke who made all the right decisions and saved his money, have to bail-out all the people who didn’t. The people who overspent their pay suddenly feel entitled to the same luxuries that I earned and sacrificed a decade of my life for.

Yes, business ownership has its benefits but the price I’ve paid is steep and not without wounds.

Unfortunately, the cost of running this business, and employing you, is starting to eclipse the threshold of marginal benefit. Let me tell you why.

I am being taxed to death and the government still thinks I don’t pay enough. I have state taxes. Federal taxes. Property taxes. Sales and use taxes. Payroll taxes. Workers compensation. Unemployment taxes. Taxes on taxes. I have to hire an accountant to manage all these taxes, and then guess what? I have to pay taxes for employing him. Government mandates and regulations and all the accounting that goes with it now occupy most of my time. On Oct 15th, I wrote a cheque to the Australian Tax Office for $288,000 for quarterly taxes. You know what my “stimulus” cheque was? Zero. Zip. Zilch.

The question I have is this. Who is stimulating the economy? Me, the bloke who has provided 14 people good paying jobs and serves over 2,200,000 people per year with a flourishing business? Or, the single mother sitting at home pregnant with her fourth child waiting for her next welfare cheque? Obviously, the government feels the latter is the economic stimulus of this country.

The fact is, if I deducted (read stole) 50% of your pay you’d quit and you wouldn’t work here. I mean, why should you? That’s nuts. Who wants to get rewarded only 50% of their hard work? Well, I agree, and that is why your job is in jeopardy.

Here is what many of you don’t understand - to stimulate the economy you need to stimulate what runs the economy. If the government suddenly mandated to me that I didn’t need to pay taxes, guess what? Instead of depositing that $288,000 into the Canberra black-hole, I would have spent it, hired more employees, and generated substantial economic growth. My employees would have enjoyed the wealth of that tax cut in the form of promotions and better salaries. But you can forget it now.

When you have a comatose man on the verge of death, you don’t defibrillate and shock his thumb thinking that will bring him back to life, do you? Or, do you defibrillate his heart? Business is at the heart of Australia and always has been. To restart it, you must stimulate it, not kill it. But the power brokers in Canberra believe the poor of Australia are the essential drivers of the Australian economic engine. Nothing could be further from the truth and this is the type of thinking that needs changing.

So where am I going with all this?

It’s quite simple.

If any new taxes are levied on me, or my company, my reaction will be swift and simple. I fire you. I fire your co-workers. You can then plead with the government to pay for your mortgage, your 4WD and your child’s future. Frankly, it isn’t my problem any more.

Then, I will close this company down, move to another country, and retire. You see, I’m done. I’m done with a country that penalises the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, my citizenship.

So, if you lose your job, it won’t be at the hands of the economy; it will be at the hands of the politicians who swept through this country and changed its financial landscape forever. If that happens, you can find me sitting on a beach, retired, with no employees to worry about….

Signed,

Your Boss

Too often, however, the global financial meltdown and the fallout we are experiencing is written in purely economic terms. The loss of just a single job through retrenchment or company failure can deal a brutal blow to a worker and their family.

That job loss is more than a cold statistic, it is a human life. It is often someone’s financial security, a family’s welfare, and a hard-working and loyal employee’s sense of self-estemm and self-worth at stake.

That said, some degree of perspective is required. Job losses come in both good times and bad. It was not that many years ago the press and the State Opposition were ridiculing former premier Peter “jobs jobs jobs” Beattie for his 5 per cent unemployment target. What a joke, we said.

When Beattie set that target in times far more benign than these, enemployment was more than 8 per cent. Today it’s still less than 5 per cent (4.7 per cent in January) despite the havoc wreaked on the world economy by failed banks, plunging commodity prices, consumer confidence and the other assorted portents of economic gloom.

Yes, there may be worse to come, but in historical terms we are still a nation pretty damn close to full employment by many measures. There are still skills shortages in key areas. There are still jobs to be had.

At a recent business breakfast in Brisbane, several companies indicated that they were adding, not shedding staff. As one bloke who runs a fairly sizeable scaffolding business put it, “We’ve never been busier and have nothing left in the yard.” He’s not about to rush out and buy more scaffolding though. Why? Because of the fear factor.

In other words, “There’s too much doom and gloom in the media, it makes you worried.” True, the media are doom and gloom merchants. It’s hard not to be when the world is turned on it’s economic head. But we must also remember that confidence - be that consumer or business - is the real key to any recovery.

Confidence - be that reckless hubris or complete lack of faith - often fulfils it’s own prophecy. Australia must remember that conditions could be, and have been, a lot worse. And when it comes to jobs, we’re better off today than we were a decade ago when times were allegedly good.

If your business is beginning to suffer a slight downturn, I can offer you solutions which will keep you ahead of your competition.

To appreciate the magnitude of the economic crisis we have to get our heads around some big numbers - such as the $1.2 trillion (US800 billion) US President Barack Obama is planning to spend to pump up a seriously deflated economy.

How can we make sense of a trillion dollars? Yes, we know it’s a thousand billion or a million million. This is about the size of Australia’s economic activity - our gross domestic product. It is also about a third of the current market value of all houses in Australia, according to latest Reserve bank figures.

The US ecomony is a $A21 trillion creature, so Obama’s package is only 6 per cent of the US economy, or about half the size of the Californian economy (which is twice the size of the entire Australian economy).

If you think these are big numbers, try the figure for “toxic assets” (bad loans) held by the world banking system. These consist of home mortgages and other financial products derived from these mortgages, all of which have collapsed in value as house prices have fallen.

The value of these toxic assets held by European banks alone has been estimated to be as high as $US24 trillion or about 30 times the size of the Australian economy, and nearly twice the size of the entire US economy.

What about bad loans on US banks’ balance sheets? No one really knows their book value. The estimates vary wildly, up to several trillion US dollars - still not nearly as high as the figure on European bank balance sheets.

How did the numbers get so big? How did we get to the point where the scale of the economic crisis and of the rescue packages in the US, Europe and Australia have become so huge?

The wizardry of the world’s bankers allowed the balance sheet of banks (which essentially consist of debts owed to and by the banks), and therefore of businesses and households, to become much too big in relation to the real goods and services underlying the debts.

For example, total bank assets in Australia were $2.7 trillion as at November 2008, which is 2.5 times the size of Australia’s GDP. Like an inverted pyramid, the pointy bit at the bottom is the goods and services (GDP) and the flat top is the balance sheets which eventually can’t be supported and come toppling down.

The toppling down process is deleveraging - banks cut lending which shrinks the size of their balance sheets and the balance sheets of businesses, big and small. Businesses that can’t borrow, can’t invest or build inventories, shrinks demand for goods and services and therefore costs jobs.

The process then feeds on itself until the pyramid is substantially smaller - until balance sheets are a much smaller multiple of economic activity. We’re probably about two-thirds of the way to the end point in that process now.

Do the Chinese have a year of big numbers? This 2008-09 year would be a good candidate. The numbers in 2010 - of assets and debts - will be a good deal smaller.

Small businesses will need to read how I can help them survive this economic crisis here.

The economic downturn hasn’t dampened the bridal spirit with the average cost of tying the knot $49,202, an increase of 25 per cent in the past three years, Bride to Be says.

The magazine’s “Cost of Love” report, investigating the financial repercussions of romance, found couples are turning away from the traditional, splashing out to make their big day more personal.

“There’s no recession in bridal town,” Bride to Be acting editor Jacqui Mooney said. “It’s about quality not quantity with couples lavishing more money on fewer guests.”

Couples are spending an average $10,476 on their receptions, inviting 97 guests at $108 per head, the magazine’s online poll of 1,007 couples found.

Less than a third choose to tie the knot in a church, with more than half opting for outdoor civil ceremonies “in a setting that’s significant to them as a couple”.

“Couples are older now at the age of first marriage, they’re more sophisticated and well travelled so they’re really taking control of their day,” Ms Mooney said.

“They see it as a significant life experience and they want to invest heavily so that they can have the day that reflects their personal taste.”

There’s a growing trend toward destination weddings with more than a third of couples marrying interstate and almost one in 10 (nine per cent) making their vows overseas.

The average spend on the all-important white dress is up from $1,900 in 2006 to $2,220. However, 36 per cent of women are paying between $2,000 and $4,000 for their gown, while 12 per cent splurge in excess of $4,000.

Ms Mooney said the groom’s style had become just as important in recent times. “It’s about what the boys are wearing as well as the girls,” she said. “One in five grooms are even having skin and hair treatments in the lead-up to the big day.”

While couples are spending three times more on wedding decorations, Ms Mooney says they haven’t lost sight of what’s important.

“When we asked brides what was most important to them on the day, half of the ladies said it was all about committing to her partner and celebrating their love in front of their closest family and friends,” she said.

More than 116,000 couples tied the knot in Australia in 2006.

If you are a photographer, or involved in the wedding industry, I can show you how to find more clients for your business.