John Linton
The pre-end of financial year blues seem to have come earlier than usual this year judging by the lack of activity in the CBD when I was there yesterday for a lunch with our lawyers. We went to a newly opened 'smart' restaurant (in itself an unusual occurrence in an 'economic downturn') and, being a creature of habit, I arrived early and had time for a chat with the nice lady who showed me to the table and then the person who offered me something to drink. Their views were that although they had done very well since their recent opening 'business lunches' were completely 'dead' around the restaurants favoured by the denizens of the area bounded by Macquarie, Market, Sussex Streets and the quay. Both of them had come from other notable Sydney eating holes and both said that they had been 'let go' and were lucky they found their jobs at the new restaurant so quickly. The new restaurant is very, very large, at least by CBD standards and seemed to employ a larger number of staf than I am accustomed to seeing in such places.
Looking round the parts of the restaurant I could see (and it's a large place) I picked out several people I recognised from either a very brief acquaintance or from the media as being some of the more 'stellar' heights of the Sydney business community and the local riff raff that are domiciled just up the road in what passes for the NSW parliament. By the time we left (and although we were by no means the first to arrive we were probably the first to leave) the wine and 'digestifs' were flowing very freely and the noise had reached an uncomfortable level even though the table distribution was more than reasonable. Clearly, although only the first 'working day of the week' there were more than a few high profile business leaders and money men with little to occupy their time in their own offices which given their likely alcohol consumption was probably for the best.
I can't complain of course having taken time away from the office after the exhausting events of last week to have a decent lunch on the pretense of reviewing Exetel's current legal issues. While we did briefly talk about a couple of legal matters I actually don't remember what they were - we too had a superfluity of stuff that comes in bottles.
Over the past 10 days or so I have talked to a number of business acquaintances about business 'trends' based on what's happening in their range of different businesses and there is an evident trend downwards in terms of general business activity for most if not all of them. Usually you can 'plan' on business activities becoming quiet from around mid June to the end of July each year in many industries and particularly in those industries that have a significant part of their activities involved with Local, State or Federal government but this year, from what I can tell, business seems to have slowed down in May for most of the people I talk with and they are now wondering whether the 'phoney recession' is maybe moving towards something more 'real'? I can't tell as our business is too small generally and we have no governemnt business of any magnitude and, touch wood, we have only seen a continual increase in our month on month business.
June revenues over our various product/service offerings will be a good guide as to what is happening because, even in non-government related business, it tends to slow down as the bean counters put 'holds' on new orders and new projects to make it easier to complete the year end accounts and then get the fiduciary reporting done by the October dead lines. Our first June day was a little slower than the usual first order day of the month but still a good result - in as much as any single day can be regarded as any sort of guide. Two of our larger suppliers called to say they thought our May orders were very strong (which they were) and asked for a June estimate which I gave them and they seemed quite happy with the estimates which indicated to me that perhaps some of their other wholesale customers weren't being very optimistic.
We have to absorb the costs of the new fit out and the costs of moving in the current month so our cash flow will take a hit but because of the various federal government 'incentives' we will actually improve our next quarter cash flows because of the big drop those incentives will give to the pay as you go/running balance payments due to the ATO (as well as the positive tax result for the FY2009 financial year. We had always planned to be very cautious in terms of spending in June and July because of the inevitable cost over runs of a move. So a time, even for us, of accounting, legal and organisational, administrative and personnel detail rather than sales and promotion and technical tasks and processes which are pre-eminent for the other ten and a half months of the year.
I have looked at my personal calendar for June and found that I have nothing interesting in the schedule day after day for the next four weeks and the days are even more crammed than in the average month - so even tiny companies and their managers get caught up in the dog days even if only by assimilation and/or default. There are some bright spots and we need to find time for an end of financial year 'party' to celebrate a very significant year in our short history - finding time to do that and the 'planning' might be difficult though.