“In 1994 we were standing on the edge of a precipice; since then we have taken a major step forward”.
I first heard that one-liner about 10 years ago but it came to mind again during December when we saw the Rand plummet following Zuma’s ridiculous decision to fire our Finance Minister. I thought that January might bring some relief but sadly this has not been the case.
The ANC is in disarray, and whilst this may be good news for supporters of other political parties it does not bode well for our economy. Agreeing to adjust the repo rate upwards by 500 basis points has ‘firmed’ the Rand for the time being, but whereto from here and what can we do to protect our businesses and our income?
In January last year 1 US$ would have cost R11-64. Today it will cost R16-10. It is similar with the British pound. This time last year £1 will have cost R17-54, today it will cost R23-25.
Throughout last year, my ‘blogs’ urged small and medium sized business owners to consider opening a company in the UK to gain access to more buyers and to take advantage of accumulating profits in a stable currency. Just placing money in a bank in the UK would have produced a growth in excess of 35% during 2015.
We assisted a number of companies to do this during 2015; none have regretted it.
The term “work smarter, not harder” has been banded around since the 1930’s. Although it sounds good, I suspect that most business owners will know that to be successful you have to work smart and hard. Working smart is knowing where to find customers; working hard is getting customers and keeping them.
The problem is that in this economic downswing (dare I say recession?) even the most loyal customers are looking elsewhere to see if they can cut their costs. So what can we do?
Sadly not much more that each of us have done already. But if you have a product that you think would be attractive to UK buyers, why not consider opening up in the UK – that is if you haven’t done so already. The rand is of such low value that there has never been a better time to explore new markets. You will have to work hard to get your new customers, but hard work has never scared the businessman. That’s why you have been successful.
If you’re interested in knowing more about how we help small and medium sizes businesses to open up in the UK at surprising little cost and without any long term commitments , take a look at the FAQ page on our website HERE
or drop me an e-mail at pete@vealglobal.com
Talk soon,
Peter Veal, 29 January, 2016