One of the key problems that the current downturn has created is that, in the good years, many of us were looking for new and interesting ways to make money. With healthy order books and a strong feeling of optimism, there was a feeling that any business could do anything, whether it related to the original business or not.
For example, car companies launched credit cards and supermarkets launched banks. Some of this diversification has been of great benefit to those businesses and, one day, Tesco’s may well provide your pre-natal care as well as run a funeral home … earning ClubCard points before, during and after your entire life.
However, for others, the experiment in non-core products and services has caused huge problems for businesses as they face more testing times. Once the downturn started many businesses had to evaluate where costs could be saved and, in many cases, the area of immediate attention was that non-core business.
So we saw redundancies in periphery operations and money diverted back into the main business. However, a recession can be a real time for opportunity as many of the ‘big ideas’ that are picked up and developed during the good years, are still there. Demand is still high and, from talking to many businesses in niche areas, order books are still good, but not as full as before.
There are good deals to be had on property and assets, there are people available and, I believe, we will see the banks return to reasonable lending levels in the near future.
So, maybe not green shoots, but we’re working on fertilising the land. Get planting!
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