2014 Business Forecast - what to watch out for in the year ahead

2014 Business Forecast What to watch out for in the year ahead

Contributors: Justin Fabo, ANZ Rob Henderson, NAB James Price, JPAbusiness

2 jpabusiness.com.au +61 2 6360 0360

Table of Contents

Introduction ........................................................................................................... 3

Chapter 1: What is the outlook for the Australian economy in 2014? ..................... 4 ANZ’s key forecasts for 2014 ........................................................................................................................ 4 Downside risks for the Economy and SMEs in 2014 .......................................................................... 9 Opportunities and upside risks for the Economy and SMEs in 2014 ........................................ 10 Overview of the Australian economy in 2014 ..................................................................................... 11

Chapter 2: What is the outlook for the international economy in 2014? ............... 12 NAB’s key forecasts for 2014 ...................................................................................................................... 12 What are the opportunities for Australia? ............................................................................................ 18 What are the risks for Australia? .............................................................................................................. 18 International outlook in 2014 and its implications for Australia ............................................... 19

Chapter 3: What do the forecasts mean for your business? .................................. 20 Key messages for small-‐ to medium-‐sized businesses .................................................................... 21 Australia’s changing business landscape .............................................................................................. 23 5 key features of the new business landscape .................................................................................... 24 How to navigate the new business landscape ..................................................................................... 27 Holiday activities! ............................................................................................................................................ 28

Disclaimer: The information contained in this eBook is general in nature

and should not be taken as personal, professional advice.

jpabusiness.com.au +61 2 6360 0360 3

Introduction What is the outlook for the Australian and international economies in 2014 and what are the implications for your business?

To answer these questions we’ve asked leading Australian economists and commentators, Justin Fabo from ANZ and Rob Henderson from NAB, to share their views on the economic outlook for 2014 and beyond.

In Chapter 1 Justin answers our questions on the Australian economic outlook, while Chapter 2 sees Rob explain NAB’s forecasts for the wider international economy in 2014.

In our final chapter James discusses the implications of these forecasts for small to medium-sized enterprises (SMEs).

Here’s a brief introduction to our guest contributors:

Justin Fabo is head of Australian Economics, Corporate and Commercial within ANZ’s Australian Economics team. Justin specialises in macroeconomic forecasting and research, including on the labour market. He provides key strategic commentary on the Australian economy, including on the corporate segment operating across the economy.

Rob Henderson is the Chief Economist, Markets, at National Australia Bank. In this role, Rob advises the bank’s dealing rooms and business clients on the economy and financial markets. He is a spokesperson for NAB on economic and financial issues and makes regular contributions to TV, radio, the print media and the news wires.


Chapter 1: What is the outlook for the Australian economy in 2014? Comments by Justin Fabo ANZ

ANZ’s key forecasts for 2014

• Aussie dollar – US 87 cents by the end of 2014 • Interest rates – 2.5% (RBA cash rate) • Business investment – fall of 4% (this includes mining and

non-mining, adjusted for inflation) • Business credit growth – around 5% • Overall household consumption – up 2.5% • Wages growth – below 3% • Employment growth – 1.5% • Inflation – 2.25-2.5%

What is your forecast for the AUD in 2014?

We’re looking at 87 US cents by the end of the year.

The currency doesn’t look too over-valued at the moment (below US89c – mid-December 2013) and is broadly in line with its long-run drivers, i.e. commodity prices, interest rate differentials, growth differentials and so on.


However we expect the US economy to pick up a bit, with overall growth of around 3%, and we don’t expect the Australian economy to continue out-performing the US the way it has for the past few years.

As a result interest rate differentials will be a lot narrower and we expect commodity prices to continue to gradually drift lower.

What is your forecast for Interest Rates in 2014?

We expect the RBA official cash rate to stay at 2.5% until at least early 2015.

The reason for this is we expect the economy to muddle along for a little while, so we still need interest rates pretty low.

The RBA board probably doesn’t want to cut rates any further if they can get away with it; they want the currency to do the work for them. They don’t want to stoke the housing market too much, even though they’re not overly concerned about it at the moment.

However there is a risk that around the middle of 2014 there will be some uncertainty, as it’s about that time mining investment starts to come off pretty quickly.

If the other parts of the economy aren’t picking up strongly enough it will be a pretty tricky situation for policy makers.

It’s conceivable we might need to get rates down a little bit more, particularly if the currency doesn’t come off a fair bit, but that’s not our call at the moment.


What is your forecast for Business Investment in 2014?

Business investment is interesting because it’s pretty mixed.

Looking backwards we’ve had one of the biggest mining investment booms the world has ever seen, and in a pretty short period of time as well.

However, mining investment has broadly topped out so it’s not really contributing to growth anymore. It looks like it will stay around this historically high level for another two or three quarters, but from mid-2014 it will come off pretty sharply.

We’re very confident about that because a large share of the investment happening now is in a handful of big gas projects and once they start to scale back there is nothing of the same size that has started or is in the pipeline.

We’ll then need non-mining investment to pick up and all signs are it’s going to be pretty weak until at least mid-2014, and it’s more a hope than a forecast that it will pick up after that.

We probably won’t see a strong pick-up in non-mining investment until we’re into 2015 and beyond, because businesses are saying they have plenty of spare capacity so some of that has to be eaten up before they invest.

Demand growth is nowhere near as strong as it was before the GFC and that is expected to continue because people are being cautious.

Total business investment (includes mining and non-mining, adjusted for inflation):

• 2011-12 – grew at 16-19 per cent each year

• 2013 – expecting fall of 2%

• 2014 – forecast fall of 4%

• 2015 – forecast fall of 7%


What is your forecast for Business Credit in 2014?

Business credit growth has been pretty weak for a number of years now but we’re expecting it to pick up in 2014 to around 5%.

This is because we do expect non-mining business investment growth to pick up a little, but from a macro perspective it’s not enough to offset the weaker mining investment.

What is your forecast for Overall Household Consumption in 2014?

We don’t expect much improvement in household income growth because the labour market is pretty soft, but one factor that should provide some support to consumption is asset price rises, so there should be positive ‘wealth effects’.

We’ve also seen some improvement in consumer confidence over the past 18 months, however it’s still mixed for retail and going into 2014 will stay mixed.

The lower currency may also benefit some retailers. It means domestic retailers become more competitive on price relative to the overseas online seller. We’re already seeing that in some numbers on online retailing growth; growth in overseas online retailing has slowed up a lot.

Further, over the period the currency has started coming down, growth in the number of Australians going overseas has also slowed, and the amount we’re spending overseas has flat-lined. That means the drag on spending domestically has diminished.

For some retailers, however, the lower currency means the products they buy are more expensive and if they can’t pass that on in margins, it hurts profits.

Overall Household Consumption Growth (adjusted for inflation): • 2012 – 2.5% • 2013 – a bit below 2% (slowed this year in part due to slowing

in wages growth) • 2014 – 2.5%


What is your forecast for Wages in 2014?

It’s very rare for wages to go backwards, unless you’re in a place like Greece or Ireland, but we have seen a very sharp slowing in wages growth in Australia, which began in mid-2012.

Over that period the overall demand for labour has slowed up a lot and that has spilled over into slower wages growth, plus businesses in general have been looking to cut costs.

It’s well known that wages and other costs have gone up in Australia over a long period of time because the economy has done well. The basic story is:

• From 2003-2011 we had a massive run-up in the prices of our commodity exports.

• This led to a mining investment boom which led directly to upward pressure on wages across the economy.

• All the extra revenue in the economy boosted profits in general, which meant businesses were able to keep on the marginal worker and pay for healthy wages growth.

• Extra revenue also boosted government revenues, which was recycled back through tax cuts over several years.

But all this force that came out of the commodity price boom has now ended.

From the September quarter 2011 our commodity prices have come off about 25% – though they’re still very high – and that free kick we were getting to our income growth as a nation is no longer there and that’s filtered through not just to mining profits, but to other businesses’ profits.

That then filters through to what businesses are able to pay their staff. Combined with the higher currency, that is the reason wages growth has slowed up a lot and we don’t see that changing for some time.

We think over the next year, at least, we’re looking at wages growth below 3%.


What is your forecast for Employment in 2014?

Employment was pretty soft in 2013, particularly relative to the strong growth we are experiencing in the population.

In 2014 it’s looking a little better, and we’re forecasting 1.5% growth over the year. We see residential construction as one clear sector where there will be employment growth.

If our forecast for the currency is correct, or if it comes off even more, there will be parts of manufacturing that will be generating jobs, despite the recent closures forecast into the future (e.g. car manufacturing and whitegoods).

What is your forecast for Inflation in 2014?

Inflation has gone off the radar globally and in Australia it’s just not an issue.

The RBA has their target band of 2-3% annual inflation and we think it’s going to stay in the bottom half of that band in 2014, about 2.25-2.5%.

The key reason is wages growth remaining soft, productivity growth improving and firms having plenty of spare capacity so there isn’t a lot of scope to increase margins.

Downside risks for the Economy and SMEs in 2014

1. Mining investment – we know it’s going to come off pretty sharply from around mid-2014. If it comes off harder than we’ve anticipated and/or the flow-on effects are worse then it’s a clear risk for the economy. One cushioning aspect will be that the currency should adjust lower than we expect in that scenario. That’s not a given, though.

2. Global impacts – We’re a small, open economy, heavily influenced by what happens overseas. (See Chapter 2 – International Economic Outlook)


Opportunities and upside risks for the Economy and SMEs in 2014

1. Lots of SMEs in Australia have some exposure to housing market activity and that has clearly been strengthening in terms of sales, plus construction. We expect that to remain the case through 2014, with construction activity strengthening.

2. Food has been one bright spot of retail trade in recent years. Population growth has been pretty strong and we all need to eat, so underlying demand for food has been chugging along. There’s also the ‘MasterChef effect’ theory, which has seen people spend money on nice food, but cut back on other discretionary spending.

3. If the currency does move lower this will clearly create opportunities for exporting industries and industries that compete with imports will become more competitive. We are already seeing this.

4. One opportunity that is a bit more left field is that a large share of businesses will be keeping a focus on their costs. When businesses do that it throws up opportunities for small businesses that provide services in the areas of advice, solutions and efficiencies.

5. Some parts of non-residential construction might also throw up some opportunities. The outlook is getting a bit better there, though it will be very patchy and dependent on your location.


Overview of the Australian economy in 2014

Overall we think things are still going to be pretty tricky and a little sluggish at least for the next 6-9 months and then we’ll see some signs of non-mining sources of activity getting a bit of momentum.

However, if you’re a business it’s difficult to see how uncertainty around both politics and the economy is going to diminish much over the next couple of years. Hopefully it will.

Most businesses have come to terms with the fact that people’s spending has changed. It’s pretty rare when we talk to businesses that they think growth in profits and spending are going to return to the strong pre-GFC growth rates. No one is really expecting that.

The risk is that people go too far the other way and think the global economy is broken forever and no one invests anymore, because then it becomes self-fulfilling. We’re nowhere near that, but we do need a bit more confidence out there.


Chapter 2: What is the outlook for the international economy in 2014? Comments by Rob Henderson National Australia Bank

NAB’s key forecasts for 2014

China

• Chinese outlook still very supportive of the Australian economy. • Chinese economic growth slowing, but economy so enormous that

even 7% growth represents massive increase in size of economy. • Rising opportunities for Australian enterprises of all sizes with links to

China’s economy.

Japan

• Japan enjoying best growth numbers in two decades. • Good news for Australia as Japan is still Australia’s second largest

export destination after China.


USA

• Sustainable private sector recovery occurring in America. • The Federal Reserve has now started to reduce the extent of its

economic stimulation, which will eventually lead to higher US cash rates.

• Longer term interest rates are already significantly higher, anticipating the Fed’s ‘tapering’ of its monthly stimulus program.

• Higher US rates mean higher Australian interest rates. • Higher US interest rates will lead to higher US dollar, putting downward

pressure on the Aussie dollar.

European Union

• EU will only affect Australia if it ‘falls over’. • European Central Bank and EU policy makers have greatly reduced

the risk of major financial meltdown in Europe.

What is the economic outlook for China in 2014?

China’s growth rate over the past 20 years has been about 9.25%, but it is slowing down and we think in the next couple of years it’s going to grow in the range of 7 to 7.5%.

It does sound like quite a big slowdown, but the truth is China’s economy is so much larger today than it was 20 years ago, that even growing at 7% still represents a massive increase in the size of their economy each year.

For example, on our figures, the Chinese economy will expand by $3.6 trillion yuan in 2014. It will need a lot of coal, iron ore and other natural resources to enable that expansion to go ahead and that means a big increase in exports from Australia.


What opportunities are there for Australian SMEs in China in 2014?

There are rising opportunities for enterprises of all sizes in Australia that are in some way linked to China’s economy.

The obvious ones are for the large exporters of iron ore, coal and LNG, which are normally large multi-national corporations.

However you can also include service providers like the tourism sector.

China has the largest number of outbound tourists of any country in the world today and Chinese short-term visitors to Australia outnumber short-term visitors from anywhere else except New Zealand.

So the growth of middle class incomes in China represents a massive opportunity for lots of small and medium-sized tourist operations.

There are similar opportunities for all sorts of firms providing professional services in the education and health areas, as well as business services, accountants, lawyers, designers and IT people.

Source: National Australia Bank


And in the future…?

China’s economy has been growing very rapidly for about a decade and this increase has meant a lot of their available supplies of resources like coal, iron ore and LNG have been consumed.

I think in the next five years or so our key exports will remain energy and resources, but fast forward 20 years down the track and we’ll be exporting far more services to China than any other type of product.

That’s good news for Australia because already almost three-quarters of Australians are employed in the services sector.

That’s where the bulk of employment is, that’s where the bulk of our skills lie, and that’s where the opportunities lie because as Chinese and other Asian countries’ populations enjoy rising living standards, they’ll demand more services in health, education, tourism, you name it.

That will be a real bonanza for Australians in the years ahead.


What is the economic outlook for Japan in 2014?

Japan is having the best couple of years we’ve seen for two decades, and that seems to be a product of the policies introduced by Prime Minister Abe.

His government’s policies have been instrumental in changing the central bank’s modus operandi to try and make it much more proactive in terms of stimulating their economy. They’ve massively increased their monetary easing and it’s really paying off.

It also looks like they’re going to undertake some fairly strident structural reform to their economy, which will set them up well.

Today Japan’s growth numbers are the best we’ve seen, on average, since about 1990. That’s important for Australia because Japan is still Australia’s second largest export destination after China.

What is the economic outlook for the USA in 2014?

America’s economy is growing at a moderate pace. It’s not back to trend yet, but clearly we’ve got a sustainable private sector recovery going on in America.

The key for Australia when you consider America is the likely impact on our financial markets, because the US has been stimulating their economy via very loose monetary policy.

They’re in the process now of starting to wind back the extent of that stimulation and eventually they’ll stop stimulating their economy altogether and short-term interest rates in America will rise.

Interestingly, the yields on the longer dated US government bonds (for e.g. 10 year bonds) are already rising and that’s in recognition that the end of this highly stimulatory policy is coming.


That has two implications for Australia:

1) Interest rates - Higher interest rates at the long end of the yield curve (3, 5, and 10 years in the US) will ultimately translate into higher rates in Australia, because our bond market is priced at a premium over the US market. So, if the underlying US assets yield goes up, so will the yield in Australia.

2) Aussie dollar – As interest rates rise in America it will push up the US dollar. But a rising US dollar means the Aussie dollar will probably fall. We think that’s a good reason to expect our currency will be lower by the end of 2014.

What is the economic outlook for the European Union in 2014?

The truth is that, unless the EU falls over, Australia can pretty much forget about it.

That might sound a little glib, but unless they have a substantial recession that might reduce exports from countries such as China, we don’t think the EU will have much impact on Australia via the trade route.

There was a period there a year or so ago when there was a lot of concern internationally that because of problems in countries such as Greece, Spain and Italy, the whole European currency might break up.

But the European Central Bank and the policy makers in Brussels seem to have now put in place a number of policies which will prevent that from happening, so the risk of a major financial meltdown has been very much reduced.

That’s now a very low probability risk for Australia.


What are the opportunities for Australia?

The key opportunities for Australia in the years ahead are clearly going to be in Asia.

We’ve not only been blessed with an abundance of natural resources, we’re also in the right time zone, in close proximity with Asia, and also culturally and politically we’ve seen much more integration between Australia and the Asia Pacific region than most other developed economies.

That puts us in the box seat to benefit from the growth in these countries.

I think it’s a really important opportunity for us which might last for a good 20 or 30 years and possibly even longer.

What are the risks for Australia?

The major risks still come from a financial shock and that could emanate out of America if the Federal Reserve, for example, didn’t do a good job of moving away from its current very stimulatory settings.

That might cause the market to undergo a major downturn in America and that would cause problems for financial markets in Australia.

It’s a similar story for Europe, if we saw problems in government debt or problems with the banking sector, which is quite under-capitalised compared to other regions.

Fundamentally, however, it looks like most of those risks have been mitigated to a degree, so I’m not as worried about them as I was a couple of years ago. The Fed’s recent decision to start tapering its bond purchases was carefully managed and telegraphed and the announcement did not lead to any substantial market disruption.


International outlook in 2014 and its implications for Australia

From an international perspective, the coast looks pretty clear for Australia going into 2014.

Our outlook is for a quite positive backdrop for Australia because we’ve got global growth accelerating, particularly among our major trading partners.

It looks like growth in 2014 will be stronger than the long-run average, which means our exports should do pretty well.

Source: National Australia Bank, ABS

In terms of financial markets, it doesn’t look like there are any major problems that might blow up. A key risk is the US budget and fiscal positions, but the recent deal to extend the debt ceiling by two years seems to have mitigated that risk.


Chapter 3: What do the forecasts mean for your business? Comments by James Price JPAbusiness

There is no doubt the last five to six years has been a tumultuous ride from an economic perspective.

We’ve seen some highs in activity, particularly in business activity on the back of growth in mining and commodities, but we’ve also seen sectors severely affected by contractions in spending, particularly retail.

We’ve also seen new business models emerge via new technology and online platforms that have changed the game in terms of:

• how consumers source products; • how consumers consider their purchasing decisions, and • how businesses can satisfy different markets through a lower cost,

more flexible delivery model.

It’s certainly been a very challenging time for businesses of all sizes, but now we need to ask: where to from here?


Key messages for small- to medium-sized businesses

Based on our guest contributors’ economic forecasts, there are several key take-home messages for business owners to consider:

1. Finance still not open slather 2. Challenging environment for B2B 3. Consumer spending opportunities 4. Positive export outlook

Finance still not open slather

In terms of the costs of funding or the return on surplus funds invested, there are signs interest rates may have reached a near bottom in their current cycle.

Coupled with that are good signs the major finance providers have credit available on reasonable terms and reasonable cost for those companies that have a really solid track record, strong balance sheets and are able to meet the basic credit criteria in terms of servicing, security and surety.

There’s no doubt, though, that finance is still not open slather and businesses with a more leveraged position – those that don’t have unencumbered assets and a strong servicing record – are still going to find it hard to fund their ongoing activities.

Challenging environment for B2B

For businesses who provide services to other businesses, it appears there will be a continuing challenging trading environment in the near term.

There is no doubt there is still a cautious sentiment among the business community in Australia to confidently invest in growth.

Our guest economists have not forecast strong investment growth, and that will impact services and products sold to businesses and the degree to which those markets grow.


That means if you have a business providing services and products to other businesses, you’ve got to look at your points of difference and be able to demonstrate those.

You must also look at your value proposition to customers and present that in a more intriguing way to spike investment interest.

Consumer spending opportunities

There appear to be positive signs in terms of an uptick in domestic construction of housing – both owner-occupied and investment – and also a continuing reasonable level of domestic spending.

Of course, those things are heavily impacted by sentiment, but it means businesses exposed to consumers, rather than other businesses, have the opportunity to benefit and capture some of that growth.

Positive export outlook

From what our guest contributors are telling us, it appears there is more chance of downward pressure on the Australian dollar than upward pressure.

Clearly the outcome of the Australian dollar over the next 12 months is heavily dependent on international markets, however this is a brighter light on the horizon for export-exposed businesses, both in agricultural commodities, mining, wholesale import/export and manufacturers exposed to overseas markets.


Australia’s changing business landscape

Based on our guest contributors’ comments, it appears we’re moving into a new Australian business landscape.

While not wanting to be bold and predict that the GFC is gone, we seem to be over the other side of the hill of the crisis and hyper-volatility that has accompanied the GFC.

That has the potential to create more confidence in business investment, business growth and business restructuring.

Over the past five or six years many of our business clients and customers around Australia have had an ‘all hands on deck’ attitude, and rightly so. In other words we had to ride the wild seas of the GFC very, very carefully – almost in a micro-management way – to get through it.

Now there is an opportunity for businesses of all sizes to look forward and consider:

• Where are we headed now? • What are our strengths and weaknesses, financially, customer-,

product- and people-wise? • How should we take advantage of the likely economic climate we’re

headed into in the next 1-3 years • Where are the risks we need to protect ourselves against?

It’s a watershed point for a lot of businesses and one where strategic planning and consideration of future steps need to take place.


5 key features of the new business landscape

Australia’s new and emerging business landscape is characterised by 5 key features:

1. Hyper-competitive economy 2. Performance oriented 3. Multi-speed economy 4. Haves and have-nots 5. Risk-aware owners

Hyper-competitive economy

This means that in a lot of sectors – retail is a good example – the world is a smaller place and customers are looking for value.

Whether you’re a power station in Japan looking for the right type of product or a manufacturer in South Australia looking for a different source of components, it’s hyper competitive.

People are sourcing products and services and comparing those globally and there are blurred lines between what used to be very defined industries.

That means as a business you have to be very clear about the value you can provide to the market.

It means business is not as easy – it doesn’t just come to you – but it also means there are opportunities to create a point of difference and therefore do well.


Performance oriented

The business environment is very performance orientated, both in a B2B supply sense, but also in a customer sense.

If you’re a customer, feedback is now dynamic; it doesn’t rely on a complaints process.

The ability to tweet, blog and post your views about an experience is instantaneous and can positively or negatively impact a business brand even before the business knows about it.

Multi-speed economy

We used to hear politicians and others talk about two-speed economies. Based on what our guest contributors have told us, Australia, over the next 12 months and beyond, is going to have many, many speeds.

They are going to be across geographic regions, they’re going to be across different industries and different sectors.

So the norm is no longer the norm. There is no norm!

As business owners we’re going to have to be more intelligent in terms of our analysis and review of risks and opportunities, to understand the nuances in our marketplaces that might allow us to get the upper edge.


Haves and have-nots

There will be the haves and have-nots in business: those that are successful and those that are not.

That is going to be dependent on the things we’ve just talked about in terms of being acutely aware of the opportunities in the market and the needs of one’s customers, and how to deliver that in an intriguing and unique way.

But the other contributing factor is the strength of an individual business’s underlying capital funding.

From what we’ve heard from the economists, it’s hard to see how an economy more attuned to financial conservatism is going to suddenly swing the other way.

So those businesses with decent, secure capital bases are going to be able to participate in industry consolidation via acquisition or inorganic growth.

Those with limited capital funds are going to struggle.

So, in terms of looking at the future and the opportunity for strategic planning, this will be a key issue business owners need to consider:

• Am I going to be part of the business consolidation and growth phase? Can I invest in my business? Have I got capacity to do that and to be competitive in this new environment? Or

• Do I need to extract some value by thinking about either a transition strategy, succession or exit strategy – is that the best avenue for me?

There is no right or wrong answer, but now is the time to be thinking about it.


Risk-aware owners

We appear to be entering calmer economic waters, but the lasting legacy of the past five or six years’ volatility is business owners that are more risk aware.

That doesn’t mean business owners won’t be risk takers.

Some of the most successful business people we deal with are very risk aware and in some respects quite conservative. However people observing them – both inside and outside their industry – would often say they are entrepreneurs and risk takers.

The truth is they take very, very calculated risks, an approach which will be critical for success in the new business landscape.

How to navigate the new business landscape

As we head into this new business landscape, one good approach for a business owner is to be both ‘Jekyll and Hyde’.

By this I mean being attuned to the new opportunities, because they are opening up, but also learning from the recent tough times.

So do look for opportunities to invest, grow and develop to strengthen your business’s value.

But at the same time, having learned from the past five or six years, be rigorous, disciplined and calculated about the risks and potential downsides that are still evident in this economic outlook.


Holiday activities!

You’re hopefully having a relaxing January break while reading this. If you do have a little time on your hands, I suggest you look ahead and make a plan for your business:

1. Map out a practical plan for your business for at least the next 12 months.

2. Talk to your advisor, or even just jot down some goals that you feel are achievable, given the current environment, so that in January 2015 you can reflect on them.

3. Have a good look at the value in assets and liabilities associated with your business, get some advice to pressure test the strength of those, and then match those with your plans for the business in terms of investment, growth, change and return over the next 12 months.

4. If they don’t match up, identify the gaps and agree strategies to address them. These strategies could range from succession or exit to additional funding, changes in funding and finance mix, equity or partnerships, looking for attractive acquisition opportunities or additional business lines, looking at ways to diversify your income base, or consolidating your position by reducing debt.

2014 Business Forecast - what to watch out for in the year ahead

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