Ask not what the Budget can do for you . . .

What can we do?

I’ve been asking this question of people who ought to have the answer – an economist, an accountant, politicians, business people . . .

They’ve all given a similar answer: if you’re in business the best contribution you can make to counter the recession is to employ people.

Do all you can to ensure your business retains it’s current workforce and if possible create new jobs, even a part time one because a bit of part time work here and a bit there can turn into fulltime employment.

Are they right?

6 Responses to Ask not what the Budget can do for you . . .

  1. Pique Oil says:

    They are all right in theory.
    In practice they are as usual completely out of touch with reality.
    An example, A medium sized service station (ours) has had power,wages and rates all go up. Income is fixed at the whim of the oil co, in what margins we can make.(similar to your next post actually)
    So do we borrow from the bank to keep things going as is or do we, reduce costs. The biggest cost is wages so we will reduce staffing and operating hours.
    I welcome any of the theorists ideas on how to employ more people without increasing indebtedness.

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  2. Inventory2 says:

    Excellent post. We have hired five new staff so far this year. We lost one, who was working around 30 hours/week, so Mrs Inv has replaced that person with two others who will start off at 25 hrs/week each. Is there a recession happening?

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  3. Inventory2 says:

    PO – because of the way our funding stream works, growth in our business is a short-term problem. But we have a very helpful bank – although it has yet to add any zeros on to our line of credit 🙂

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  4. Pique Oil says:

    IV2, we could go down the friendly bank track, but in a static or declining market, all that does is change personal risk into dollars in the bank of a multi national oil co.
    Recession? Yes there is a recession and it is a very severe one. Many of our customers are losing hours and in some cases jobs. Many others are loading up mortgages to get by.

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  5. JC says:

    “Are they right?”

    Depends on what the bank is telling them about the OD, and the personal loan collateral. I’d far sooner see a business downsize to meet the market than close later on because of sentiment. So should we because that reduced company that survives has the prospect of growth later on.

    At the end of the day a recession is a correction to an overblown situation and a signal that some products or activities are not needed any more.. or as much.. best to use the time to rethink and retool.

    I’m watching a process right now.. the boss has sold out and gone consulting, his top worker has taken over and he’ll split the organisation in two and the other unit will sub contract back to him.. both are then free to find additional work as smaller, cheaper and more attractive units to bigger outfits and customers.
    Its difficult, messy and uncertain.. but its better than taking a larger outfit down a hole.

    JC

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  6. Inventory2 says:

    PO – I understand that different people are affected in different ways by the recession, and my comments should be taken in the context of our experiences and circumstances. We are fortunate to have had a mortgage free home which has given us equity with the bank to finance our business. We are also fortunate that our business is in the fastest-growing sector of Early Childhood Education, and that within that sector, we are one of the fastest-growing services nationwide. That produces other problems though, by virtues of the way we are funded.

    It’s all good though – at the end of the day we are employing 20 people directly, and facilitating self-employment for over a hundred others. We are working with WINZ to help people transition off benefits. It’s a helluva responsibility, but it’s also incredibly rewarding.

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