Tag: terms

Where are your personal guarantees?

Personal and Director’s Guarantees

In small business run through a trust or a company, it’s common for your various suppliers and credit providers to ask you as the business owner to provide personal guarantees in support of the business’ credit requirements. The nature of these guarantees are usually that they are unlimited and continuing, meaning that you’ll be personally liable for whatever the business may incur in relation to that creditor while that guarantee is effective.

If you’re not keeping track of where you’ve given these personal guarantees, you could be exposing yourself to unknown personal liabilities now and in the future. What happens if you sell the business or are replaced as a director of the company? The guarantee could still bind you regardless if you don’t take steps to have your obligations discharged in some way. Generally, the terms of the guarantee will advise you how this can be achieved, but in practical terms it might mean replacing your guarantee with another form of acceptable security.

Whatever the case may be, make sure you’re keeping track of your personal guarantees otherwise it might be something that will come back to haunt you in years to come.

How can Importers build strategic advantage from the strong Aussie dollar?

Importers – Take advantage of the strong Australian dollar today!

Despite the turmoil of the end of the first week in August there are plenty of signs the Aussie will remain ‘high’ for a while to come.

The impact of the strength of the Aussie dollar for importers and exporters is clearly very different –but in both cases the challenge is to remain ‘strategic’ in response to it.

The relative cost of imported products and services has been falling for some time (there’ll always be some exceptions of course i.e. petrol…..) The question is as a business owner how best to “strategically” use the windfall. The first thing not to do is not to fritter it away.

The volatility in the exchange markets over the last 5 years has been considerable (March 2006 the Aussie $ was buying 0.72 US$). The GFC, Euro zone debt crisis, recent tragedy in Japan, unrest in the Middle East portends a very unpredictable future in terms of exchange rates. I’m not an expert in currency but –volatility seems to be here to stay for a little while longer…

That said if your business model is built on importing this is an ideal time to step back and use the exchange rate ‘windfall’ to start your business with your new idea- build your business, increase market share, invest in new marketing initiatives and if necessary refresh your brand.

Of course your customers will expect ‘competitive’ pricing –and in price sensitive markets you’ll need to adjust your prices. However wherever possible I would challenge you to think of non-price related benefits to add value to your product. For example offering bundles – buy three get one free, bundling complimentary products from your range –or co-branding with other suppliers.

A key strategic option is managing your online channel. What we see now are many companies managing a convergence of ‘channels’ to market which might include the spectrum of bricks and mortar, online sales –picked at bricks and mortar locations, and direct selling on their own or via aggregated mobile commerce sites like eBay, deals direct etc. The reality as a supplier you need to make sure your product is ‘accessible’ by your consumer when and how they wish to access it.

Ebay for example state “In 2010, consumers bought nearly US$2billion worth of goods globally through eBay’s mobile applications. This is expected to double to US$4billion in 2011.”

The key is to think as broadly as possible; perhaps now is the time to run that national promotion you’ve thought about –upgrade the quality of your catalogue or –invest more into your web-site –or take your social media activity to a whole new level –or to think of deepening your product offering.

By investing your exchange ‘gain’ back into the business –you might just be improving your customer loyalty beyond that of your competitors who may not have such a long term view. This could be the significant differentiator when the “inevitable” fall in exchange rate happens.

What’s the right move for your business?

Advice for Importers?

It’s often hard for SME business owners to be objective about their decision making – they don’t typically don’t have the management processes and objective analysis that boards in larger companies can rely-on. So how can you as business owner access advice –easy, the web, Austrade, state based government support, chambers of commerce, industry associations and of course specialist consultants like my organisation are the obvious places to start.

Are you an Exporter? Stay tuned for next week’s article on how exporters can take advantage of the strong Australian dollar.