Recent financial statistics indicate that South Africa may be headed for a period of slow growth. Economists observe that in 2011, what could go wrong did go wrong: the disastrous earthquake in Japan continues to have economic effects, while the Eurozone is facing a debt crisis and the United States is struggling with a slow recovery. Now these factors would appear to be affecting our economy in South Africa, where Gill Marcus, Governor of the Reserve Bank, recently cut the country’s growth forecast from 4% to 3.2%.
While most experts believe that the South African economy is far from falling into another recession, worries persist about a variety of economic and political issues. When markets are unstable and growth is seen to be sagging, businesses may be hesitant to invest and consumers may tighten their belts. The question on the minds of both business owners and individuals is the same: how do I prosper in hard times?
Streamlining for Success
Whether you are a business owner aiming to maximise profits during the economic soft patch, or an individual wondering what the best budgeting and investment strategy may be, one common approach that should be considered is streamlining your expenses.
For businesses, a complete review of monthly overheads may reveal expenses that can be reduced or eliminated altogether. Monthly items such as cell phone contracts, frequent business lunches and large internet contracts that go mostly unused may be costing the company thousands of Rand every month. Assessing your monthly overheads is an excellent way of cutting costs and ensuring that your business makes full use of all services and products that it purchases on a month-to-month basis.
A similar approach is useful for individuals. Although you may be in no risk of taking a pay cut or losing your job, by streamlining your monthly expenses you will ensure that you create a greater monthly surplus. Your financial advisor will have a plan of action that you can implement to achieve this goal. Remembering that during weak economic periods often see interest rates falling and share prices dropping, your surplus can be used to pay down credit card and home loan debts, or to buy recommended shares at excellent prices.
Streamlining for success is one of many excellent tools that can see you through the coming soft patch. Speak to your financial advisor for a comprehensive strategy.