Economic conditions impacting business
With so much new economic data out there, we thought it was a good time to update business owners with what's going on in the market so they can make well informed decisions for their business. To keep you in the loop, John Knight breaks it down in the video below.
Plus, keep scrolling for more handy extras including our free business planning worksheet, insights on company value vs. business value and expert tips for nailing M+A contracts.?
To make sure you’re kept in the loop, you can find out more here or watch this short video:
1. CPI
June's CPI data revealed a 3.8% annual inflation increase, which remains outside the Reserve Bank of Australia's [RBA] target range of 2-3%. This indicates persistent inflationary pressures that businesses must account for in their planning.
2. services inflation
Services inflation continues to rise, while goods inflation is showing signs of easing or even declining. This trend highlights a shift in inflation dynamics that could impact various sectors differently.
3. wages growth peaked
The RBA recently suggested that wages growth has likely peaked, despite ongoing labor shortages. This development may ease some cost pressures for businesses in the near term.
4. higher for longer
The RBA kept the cash rate steady at 4.35%, with no discussion of a cut, only holding or raising rates. This suggests that interest rates are likely to remain elevated for an extended period, impacting business borrowing and investment decisions.
5. decision delay
In a higher for longer interest rate environment we are already seeing business owners taking longer to make decisions. We are seeing more hesitations to invest in their businesses [whether that be big ticket purchases or employment related] and a drop off or at least a delay in M+A transactions.
6. international pressures
All of this leaves business owners in an uncertain environment, especially when combined with uncertainty in the US and the risk of a recession there. The potential for a downturn in the US has already impacted the stock market, which hit record highs before sharply falling back down.
more handy info
what’s the difference between your company value and the business value?
With so many business owners reassessing their strategies and seeking clarity in uncertain times, understanding the true value of your business has never been more important. Knowing the difference between your company value and business value can provide the insight you need to make informed decisions.
business by design worksheet
With many business owners feeling stuck and unsure how to move forward, this business by design worksheet is a great tool to use as it offers a practical way to assess and refine ideas.
Download your free copy below.
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did you know...
buying a business or shares?
A well-drafted contract is crucial to protect your interests, covering all key aspects of share or asset purchases. Learn more about getting the contract right in an M+A transaction with Special Counsel, Natalie Melia in the blog here.