Apr 9, 2026 | Management, Small business
The Reserve Bank hands down its next rates decision on 5 May.
The cash rate already sits at 4.10%. Markets and many commentators still expect at least one further rise on May 5, probably followed by at least one more. Against this backdrop, there is a federal budget trying to deliver on the social undertakings made to the electorate, while dealing with a structural deficit, soft consumer confidence, and geopolitical uncertainty, particularly as it relates to energy.
This is a toxic mix for SME’s, which despite being largely ignored by governments, are still the backbone of the economy.
That mix should sound familiar to anyone old enough to remember the 1970s. Growth stops, costs increase, consumers keep their hands in their pockets, and the cycle repeats.
That is when small businesses fail.
Whether the Reserve Bank raises again or pauses, the core message for SMEs stays the same.
Do not wait for certainty: Prepare now.
Tough times do not usually kill a business in one dramatic moment. They kill it by progressively tightening a dozen small screws at the same time. Debtors pay later. Stock turns slower. Quotes sit longer. Margins erode one discount at a time.
The businesses that come through rough periods usually do a few simple things early and do them hard.
- They preserve cash.
- They accelerate every cycle time in the business.
- They protect gross margin like it is oxygen.
- They stay close to good customers.
- They cut vanity spending and keep useful spending.
And they remember an old truth Warren Buffett expressed well: when times get tough, cash gives you options. Opportunity often knocks when nobody feels like opening the door.
The following specific advice has been heard many times, but once more will not hurt.
Know your cash position.
Know your true cash position every week, not intermittently once a month, every week, or better still, every day. Chase debtors hard, but with wit and humanity, as they are probably also suffering as you are.
Run a 13-week rolling cash flow forecast. Update it every week. Assume at least some customers will pay later than promised because they will.
Accelerate cycle times.
Every process has an established cycle time that ‘settles’ into a comfortable rhythm when times are OK. When times get tougher, those that can accelerate their cycle times will win.
This is particularly the case with your cash conversion time. To speed that up, quote faster, invoice the same day, chase deposits sooner, work operational assets harder, and reduce if not eliminate rework. Get jobs finished, signed off, and billed without dead time between steps.
The lessons of John Boyd and his OODA Loop are never so relevant as in a crisis.
Protect gross margin.
Tough markets tempt owners to discount just to close the sale. That usually backfires. The better tactic is to sell on value, drop unprofitable work and reprice where you can.
Complexity creates transaction costs, which are always hard to see. Removing complexity frees up cash to be used productively.
Keep your best customers close.
Your existing customers are cheaper to retain and increase your share of their ‘wallet’ than new ones are to win.
Call them, collaborate to solve their problems, check in before they complain, and ask for referrals and testimonials.
Cut costs carefully.
Across the board cost cutting is a desperate mistake. Do not slash the parts of the business that help you sell, collect cash, or keep customers.
Cut the ‘vanity’ and nice to have costs aggressively, not the activities that generate revenue, margin, and cash.
Tighten inventory management
Stock that does not move is just dead cash.
Reduce slow-moving lines, buy smarter, Increase visibility on lead times and reorder points. Stop over-ordering to ensure ‘safety stock’. Aggressive management of cycle times in your inventory can have a dramatic impact on working capital requirements.
Pareto the pareto
Not all customers, and products deserve to survive. The Pareto rule always applies, not always as 80:20, but it is there.
Identify the customers, products and jobs that produce real margin and reliable cash. Defend those first. and progressively eliminate those that do not contribute. When you have done the first round, do it again, you will always find more that can be productively removed. You are in effect, stress testing the revenue and cost generation base of the business.
This exercise intimidates many SME’s, who tend to form emotional ties to products, customers, and distribution channels. In tough times, emotion must be set aside.
Renegotiate early.
Banks, landlords and suppliers all hate surprises. They will listen more carefully and be more accommodating when they are a part of the process of ensuring bills will be paid, even if a bit late.
Secure facilities early. Reset terms where needed. Ask for flexibility while you still look like a good risk.
Keep hustling for sales
A weak market is not a good excuse for sloppy selling.
Tighten follow-up. Improve conversion rates. Shorten the path from enquiry to proposal to close. Make it painfully easy for the right customer to buy.
Stay visible
Marketing investments are often the first savings made in any downturn. Resist the temptation, as history clearly demonstrates that those that keep investing during the tough times come out way stronger when the worm turns. Besides, when others pull their marketing, you become more visible for no extra cost.
Be aware of bargains.
Downturns create bargains. Competitors stumble. Good staff become available. Assets get cheaper. Market share can move. Cash lets you act while others freeze.
Lift your prices.
This is sure to give some the ‘wobbles’ and is always difficult, but if you have done all the above, you will be delivering real value to customers. An extra dollar added to the revenue line drops straight through the P&L onto the profit line. There is no quicker way to increase financial resilience than to lift prices while holding volume. Even if you drop a bit of volume, do the maths, and 9 times in 10 you will be better off after the price rise.
Header credit: Scott Adams and Dilbert
Apr 7, 2026 | Marketing
Lead magnets are on life support. The requirement that a responder gives their details before being able to access the ‘value’ behind the wall, is being replaced by ‘no strings’ delivery of real value.
Requiring contact details before delivering value used to work, and sometimes still does. However, you need to be lucky enough to find someone whose exact problem you can solve, who is in the market when they see your tempting magnets. Experience tells us all that following filling in the form, will result in a deluge of unwanted emails, phone calls from disinterested callers with funny accents, and related pop-ups.
Most now think ‘no thanks’ and move on.
Robert Cialdini in his landmark 1984 book ‘Persuasion’ noted ‘Reciprocity’ as one of the drivers of human behaviour. When we give something of value, no matter how small, it sets up a loop in the receivers’ mind that encourages them to reciprocate in some way. This effect has been validated numerous times in tests, and most people recognise it when it applies to them.
So, by asking for an email address before delivering something of value, we are throwing this driver of human behaviour out the window.
Last week in a supermarket I was approached by a very skilled product demonstrator to try her product. It was a blue cheese new to the market, and being a lover of blue cheese, I was happy to try it, and then, I did buy a pack. Had she asked me to fill in a form that gave my name, phone number, and email address before being able to taste the cheese, there is no way I would have done so.
Your failing lead magnet suffers from reverse reciprocity. It is like trying to push two similarly polarised magnets together, it does not work. The rapid replacement of suggested search sites to seek an answer, with the specific answer to a question delivered by AI is the headstone of the lead magnet.
Instead, you should lead with generosity, offer real value with no strings, remove all the friction felt by someone who may be interested, and pique that interest by offering no strings value while making the next logical step obvious.
The strategic challenge is no longer the shape and efficient functioning of your sales funnel. It is now how you attract possible customers into your funnel at all. Attention and tricks are is no longer enough; you need to engage with generosity, which will from time to time, activate reciprocity.
Mar 30, 2026 | Governance, Leadership
In the pre-internet age, facts had a pedigree. You could trace them back to a source, weigh their credibility, and argue your position with some confidence. These days, we are so awash with claimed ‘facts’ that we are overwhelmed. Cheap, mass-produced, often anonymous ‘facts’ handed from one digital platform, morphed and handed on again. No clear origin, no accountability, just noise, self-serving claims, paranoia, or dreams, dressed up as certainty.
That creeping uncertainty has seeped into every corner of our lives, mostly unnoticed. The rules we live by are still shaped by politicians and enforced by institutions funded with our tax dollars. But the values behind those rules have all but disappeared.
We used to look for consistency. If someone claimed to value integrity, we expected them to act like it. Now we get performative posturing. Followed by policy U-turns, PR spin, or flat-out contradiction.
When behaviour doesn’t match the values on the label, it screams hypocrisy. As the old marketing joke goes ‘the consumer is not stupid, she is your wife’
We’re hardwired to trust facts. However, when the ‘facts’ themselves are selectively shaped, bent to fit a narrative, or worse, manufactured from thin air, we get understandably anxious and likely to distrust.
In its mild form, this is spin. In its extreme form, it’s lying. Denial. Gaslighting.
Hypocrisy is no longer just the politician’s disease; it has crept into every corner of our lives.
Public debate has been hijacked by competing ‘facts’. Not competing opinions. Competing truths. There’s no transparency, because transparency forces accountability. When nobody is accountable, integrity goes out the window.
Integrity now is so rare we wouldn’t recognise it even if it walked up and smacked us with a code of conduct.
The result? Polarisation.
Information travels faster than reflection. The moment a ‘fact’ hits the feed, the rebuttal, if it exists at all, is buried under a pile of clickbait. And if by chance a real fact does slip through, one that’s been tested, sourced, and stands up to scrutiny, it gets drowned in the noise.
Knowledge used to mean something. Now it’s riddled with bias, spin, and wishful thinking. Often wrong. Always louder than it should be.
That erosion of clarity has gutted our trust in political systems. We expect spin, so we ignore or do not recognise the occasional truth when it confronts us. When we stop trusting the institutions, we stop trusting what they publish, even when they’re right, imagination and conspiracy theories take their place.
What follows is stubbornness disguised as principle.
We cling harder to our own view, no matter how flawed. We trust only those who confirm it. Collaboration becomes competition. Dialogue turns into tribal shouting.
Meanwhile, confirmation bias is doing its work: steering our decisions, shaping our teams, and wrecking our ability to truly listen.
So, what’s the fix?
Truth. Accountability. Transparency. Not slogans. Actions.
Tell the truth based on facts you can trace. Show your working. Hold yourself and others to the same standard. Accept that facts evolve, but insist that the path of that evolution is open for all to see.
That’s how you earn trust back. One uncomfortable truth at a time.
Header credit: A single panel from and old ‘First dog on the moon’ cartoon says it all.
Mar 11, 2026 | Collaboration
You just came out of a meeting. Five executives, forty-five minutes consumed, in total three and three quarters hours of management time.
Calculate the direct cost, and consider the opportunity cost of that meeting and ask yourself:
What decision did we make?
Who is accountable for resulting action?
Too often meetings become social and political timewasters, a huge millstone on productivity that enables posturing, offers an echo-chamber for the noisy ones, and wastes time and money.
There is plenty of great information about how to run meetings on the web.
Have minutes of the previous, have an agenda, nominated begin and finish times, ensuring everyone has the chance to speak up, and so on.
The following is none of that.
Most meetings are, or should be, for the making a decision, ensuring alignment, and allocation of accountability. Some have a legitimate purpose of creating community, generating, and clarifying a common objective, but they can be subjected to the same following three step process I have found to be a useful tool.
- Articulate the decision, or purpose, the meeting has been called to make.
- Examine the pros and cons of the decision, with particular reference to examining the worst case if the choice made is wrong, and the steps that eventuality might necessitate.
- Ensure that everyone in the meeting knows who ‘owns’ the decision, and is accountable for implementation, feedback, and recommending and deploying any necessary adjustments.
Meeting for the sake of meeting may be the greatest productivity killer I have ever seen.
Header credit: Tom Gauld in New Scientist magazine.
Mar 2, 2026 | Governance, retail
As a kid Mum used to make a Christmas pudding and claim that the fairies had magically stuck in a bunch of threepences and sixpences into it. (yes, I am that old)
The possibility of finding a couple of weeks pocket money in the pudding created intense sibling rivalry around who could sneak the biggest piece, and thus have a greater chance of finding some magic.
Coles and Woolies in their most recent results announced in the last fortnight have delivered the Australian community a magic pudding.
Times are tough, there is a cost of living crisis happening around us, yet their recently released year end results hide magic for shareholders. (to be fair, most of us are now shareholders via superannuation)
The domination of these two chains is fuelling inflation.
This is a perspective not covered in any of the commentary I have seen so far.
The logic is as follows:
Margin expansion.
Coles and Woolworths have been able to preserve, and in Coles’ case expand, healthy margins over the past year. Together, they control roughly 60–65% of the supermarket sector, with Aldi and various independents supplied by wholesalers (usually Metcash) making up most of the rest. This means that for most packaged food and grocery suppliers, the path to survival runs through the trading terms imposed by just two buyers.
The latest financials show that Coles has widened its supermarket margins from 26.6 % to 27.4% and its EBIT margin edged up from 5.0% to 5.3%. Woolworths’ Australian Food division reported a gross margin of 28.6% and EBIT margin 5.4% in FY25, only slightly down from the previous year after a period of “price investment”. In other words, the duopoly has not absorbed the inflation shock through lower profits; it has kept margins high and, in Coles’ case, increased them.
The cost of living crisis has not dampened the margins of Colesworth during the tough times.
Retail real estate.
Coles and Woolies dominate shelf space and therefore set the ‘reference prices’ that other retailers follow. As a result they influence price inflation far beyond their own stores.
Woolworths and Coles use their buyer power to squeeze suppliers via terms demands, rebates, expensive promotional deals, and all the other tricks they have in their magic pudding. The power suppliers are able to exert in these pricing negotiations is extremely limited. This applies even for major key suppliers in major categories for whom supermarket volumes are essential to covering operating overheads. Colesworth are then able to set shelf prices with no reference to any competitor beyond the other gorilla. Suppliers must accept lower margins and/or push up prices in other channels just to survive.
Smaller independents, convenience outlets, foodservice and export customers then face higher input costs, which in turn pushes their retail prices closer to and usually way above the duopoly’s. They rely on ‘convenience’ and stores in population centres below the cut-off for the gorillas to invest in outlets.
The more the big two protect or expand their margins under the cover of “inflation”, the more this cost‑shifting machine drives price rises right across the grocery market.
‘Colesworth’ market share sets prices and terms across two thirds of Australia’s FMCG market.
Scale delivers price immunity to Colesworth
Oligopoly economics.
This is an oligopoly at work. They are taking advantage of a general inflationary environment to widen or protect margins, and establishing a sticky price level that will persist when inflationary pressures ease. That will be a nice windfall!
In a genuinely competitive market, we would expect that at least some of the pain of higher energy, labour and logistics costs shows up in thinner supermarket margins.
In Australia’s hyper‑concentrated grocery sector, the evidence points the other way. Without Aldi as an anchor, we would be in real trouble at the checkout.
Increasing costs are not impacting on Colesworth margins. Their scale enables them to push EBIT above 5% by pushing price up faster than the cost increases.
Medicine unavailable.
Unfortunately, I see no short-term measures that will reverse the concentration it has taken the 45 years I have been observing, to evolve. Politicians can have all the enquiries, reports, and ‘band-aid’ measures they can dream up, but none will get at the core problem other than breaking up the oligopoly. Forced divestiture.
I have written elsewhere that this is a really stupid idea. A legislated breakup would only increase costs significantly in the supply chain that would be felt at the checkout. It is therefore only a brainfart of those who will never see government, but which persists as a policy option.
The horse has not just bolted, it is over the hill. It will take another 20 years for changes in the retail environment to deliver a more genuinely competitive sector.
Header: My thanks to Scott Adams. The single Dilbert panel says it all.
