Happy New year and welcome to our first blog of 2021. I hope you all had the opportunity to refresh over the Christmas break and enjoy the wonderful weather we have been experiencing. Personally, I found the summer break to be a cleansing relief after the pace and events of 2020 and, whilst taking the time to reflect, found plenty of reasons for pragmatic optimism for 2021 and beyond. This is especially so when I think about Grow NZ Business, our members, the opportunities that lay ahead and what we have planned for this year.
We at Grow NZ are excited about this year and have quite a plan to execute, so stay posted for a number of exciting announcements coming up over the next few weeks, including new member benefits, new high-quality partners and the expansion of our overwhelmingly popular marketing intern programme.
In the meantime, here’s why I’m welcoming 2021 with pragmatic optimism…
The power of brand ‘New Zealand’
New Zealand today is better placed than ever to take advantage of the global economy’s inevitable future upswing. While I can’t be certain when this upswing will occur, I am confident that history shows when the world goes through a significantly challenging global event, a reset happens and a significant upswing results. My view is that when this next happens, New Zealand will benefit even more so than it has done after past challenges, for one big reason; our global brand has never been stronger. Right now, our country is viewed as a safe, secure place which will, over time, translate to tourists venturing over, overseas students returning, higher-quality immigration and increased capital flows, all dependent, of course, on when our borders re-open.
By focusing on the “in my control” opportunities (getting your own business in shape, improving cash flow, investing in data-led marketing decisions etc.) while letting go of the “out of my control” aspects (when borders re-open, what happens to the virus’ spread overseas etc.) we can continue to ride out the remaining uncertainty of the pandemic with pragmatic optimism, and even dare to get excited!
A rising tide lifts all boats
The late US President, John. F. Kennedy’s, aphorism “a rising tide lifts all boats” is associated with the idea that an improved economy will benefit all participants.
To add some context, think of the economy as a washing machine and money as the water in the washing machine. Our government, like many others, added water (money) to the washing machine in 2020, to help mitigate the effects of the economy’s slower than usual spinning cycle. When NZ’s borders do re-open, our machine will start to spin faster again, with more water than ever before, generating opportunities for just about all of us.
Those of us who hold material levels of stock/ inventory will understand this well; the faster we can turn over inventory whilst holding margins, the more money we make as the machine spins faster. Add more stock and increase the speed of turnover and you have exponential profit growth with even better margins, as your fixed costs decrease as a percentage of revenue.
That doesn’t mean there are not opportunities for many of us right now though, in fact, for most there are plenty. This is even true for the tourist industry; with kiwis unable to spend the significant amounts they normally do on overseas travel, there’s huge opportunity for domestic tourism.
It is great to see many of our Grow NZ members have taken this pragmatically optimistic approach and used 2020 to not just survive, but thrive. A terrific example of this is our member Jess, from Tan in the City, whom you may have read about in the news lately. I am very proud to say we designed and executed Jess’ marketing strategy and we will be running a feature on her journey in an upcoming edition. One thing I can share with you now is that out of all of the business people I spoke to throughout 2020, Jess understood her numbers and the profit drivers behind each number better than anyone else I came across – very impressive!
The ‘pragmatic’ part of my pragmatic optimism
While being optimistic is good, and some might argue essential, ignoring the risks is foolish. Two obvious ones at a macro level are the potential for the re-emergence of community transmission of COVID-19 in New Zealand and the continued congestion we are experiencing in overseas supply chains and local ports.
On the COVID-19 front, I am sure all of us are across the situation in Europe, the Americas and Asia and how blessed we are here to be living life pretty much as normal. Without wanting to put a dampener on anything, it is important we all stay vigilant and be prepared. Commentator Michael Hooton recently penned a thought-provoking opinion piece suggesting we all need to prepare for borders to remain closed until 2022. Whether you agree or disagree with the view, the message is it is best to be prepared just in case.
When it comes to supply chain issues, the risks are namely the potential for increased input costs and delays in stock, causing the ‘machine’ to spin slower. Having contingency plans in place for these and other scenarios is crucial for continued success.
So, hopefully you have all your plans in place for 2021. If not, now is a great time to revisit our tips for doing so. Now is also ideal for undertaking a business “pre-mortem” as part of your scenario planning, as we recommended in our now somewhat infamous article, In a Strong Wind, Even Turkeys Can Fly.
Here’s to a rewarding 2021 for us all. Let’s work together to maximise our opportunities and overcome any curve balls that tend come our way in business. 2021 is finally here – and we’re here for it!