So it’s official – Australia is in recession. Our first recession since 1991 and that means a significant percentage of the population haven’t lived through a recession and a big percentage of business owners have never navigated a business through a recession.
I vividly recall signing a contract to purchase a commercial property in 1989 and watching interest rates soar every day as the settlement date approached. Variable rates rapidly climbed through 15% to 17% with ominous momentum creating enormous panic for housing and business borrowers. In desperation I accepted a fixed 5 year rate of almost 21% through the 1991 recession, which proved to be a very expensive decision because variable rates never reached 20%.
We all make mistakes in business and that was one of many I have made over the years. Here’s some of the things that I have learned over my years in business that might help you through this recession:
– Many sectors will not be significantly impacted by the recession
– Many businesses in sectors that are adversely impacted will thrive because:
– Some of their competitors will disappear
– They will be motivated to try new things and some of these will be successful
– There is always enough customers for your business; you just need to make sure they are dealing with you rather than your competitors
Ultimately, recessions are about collective lack of confidence in the future and success in a recession is about confidence in your own ability. If interest rates stay under 3% a 2020 recession might be better than a 1980’s boom.