Our new financial year is upon us and against what a colourful backdrop it falls. Greece's debt crisis is drawing global attention. Yet perhaps of even bigger note to Australia is the Chinese economic slow down. After all, China is Australia's largest trading partner so our two countries' economic fortunes are inextricably connected.

BLOG: New financial year resolution: sound business planning

There is no denying that China's economic growth is stalling. China's economy has registered its lowest growth in 24 years. Already the flow-on impact on Australian business is evident. Such market uncertainty has seen the Australian dollar reach its lowest value against the US dollar for many years. Currently the rate is slightly under 0.75 AUD to 1 USD. Likewise mid-year analysis of the Australian economy indicates that business activities are less than quintessentially buoyant. Some keynote statistics from the mid-year economic update reveal that Australia’s:

  • GDP is growing at between 2.3 per cent and 2.5 per cent
  • Unemployment rate is now reducing to around 6 per cent, despite having earlier been on track to increase well beyond 6.5 per cent
  • Inflation is steady at 1.7 per cent
  • Manufacturing production is down by 2 per cent
  • Interest rates are expected to remain at the official rate of 2 per cent for some time

As in any economy, there are some winners in the current Australian climate and some who are left in a less than favourable position. For example, the current AUS exchange rate is great news for exporters. Importers meanwhile must be diligent about locking in currency rates for various transactions. Importers are also well advised to search vigilantly for alternative products.

Likewise homeowners are better off due to the significant housing price surge in capital cities. Young people seeking to crack into the housing market for the first time though, are now facing even bigger challenges in doing so.

So what does all this mean for the average Australian business? Now more than ever the importance of sound business planning comes to the fore. The best way to weather an uncertain market is to keep a meticulous handle on business operations. As the new 2015/16 financial year kicks into gear, the following business planning steps are key:

  • Ongoing cashflow management
  • Close monitoring of debtors, investment in stock and work in progress
  • Focussed examination of capital expenditure proposals

Planning brings stability to your business operations and enables tighter budget and cashflow control too. Would you like some expert support in developing or executing your 2015/16 business plan? Why not give the team at Ganrid Consultants a call.