What is the state of our economy?

Ask the question, and the response usually depends on the audience’s position. Their personal or political views, interests and agenda! 

And just when you thought it couldn’t get any worse, it’s reported that the International Monetary Fund (IMF) has warned Australia will have some of the rich world’s highest inflation this year - hours after the Reserve Bank of Australia warned it could raise interest rates to an 18-year high at its next meeting in three weeks.   

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• The Federal Treasurer acknowledges times are challenging. He has downplayed the nation's economic growth slump amid what has been dubbed a productivity crisis. It was reported that ‘he insists the Australian economy will improve next year despite warnings from global economic experts’. 

• The Prime Minister says he understands. He has assured his ministers as the Government battles a deteriorating economic outlook and voters react to worsening cost of living pressures. He again predicted that political momentum would swing Labors way when it counted. 

• The Reserve Bank of Australia (RBA) is fighting inflation within policy parameters. The RBA September meeting minutes blamed domestic factors for keeping underlying inflation elevated. 

• The Shadow Treasurer is reported to have said, ‘The Albanese government keeps pouring debt petrol on the inflation fire and families and small businesses are paying the price through rising interest rates and higher prices at the supermarket.’ 

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You could say these two ingredients are instrumental to Business success. They complement the other strategies and sound business sense that make a Business succeed while others flounder or fail. 

It's captured in detail. According to Western Australia's Small Business Development Corporation (SBDC), WA's small Business sector is generating a record $87.2 billion in annual activity.  

• SBDC says new research shows small Businesses account for 97.3% of all Businesses in WA, employ more than 540,000 people and generate 35% of all private sector jobs. 

• Five years ago, small businesses contributed around $50 billion to our economy, and today it's $87 billion. This growth reflects the ambition, optimism and hard work of many Western Australians who backed themselves, created jobs and invested in their communities. 

Are you one of those operators playing such a vital role in our economy and continued prosperity? 

If you answered yes, and if I asked the question, did optimism and opportunity play a part, along with overcoming adversity, facing challenges, and the highs and lows, I am sure you would answer with a Big yes. 

On that note, you may concur with the following findings or have contributed to them as part of the recent Australian Chamber of Commerce and Industry (ACCI) Small Business Conditions survey. 

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In simple terms, Business success equals wealth by applying a simple formula: increase revenue, grow margins and decrease expenses and costs. Other suggested methods include core wealth formulas.  

What's your formula? How is your Business tracking during these challenging economic times?  

Since our article ‘Is There a Winning Formula for Success (June 2024) 10 Tips', I have continued to follow this question to seek and find answers. I hope the following provides further insight.  

Recently, a consumer expert has highlighted the impending wealth transfer as Baby Boomers shift their wealth to younger generations over the next two decades. This presents challenges particularly in the luxury goods market, where luxury brands have always run on scarcity, status and heritage. These aren't necessarily the reasons younger consumers value. Businesses need to be aware of these changed wants and expectations. 

For example, a WA luxury jeweller is already seeing the next generation spending differently from their parents and grandparents. They are also shopping smarter, mixing high-priced items with budget-cost ones.  

Tip: To stay in the game and be relevant, Businesses need to respond to changes like this.  

Other examples include:

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