Damien Grant: Wily fox snaps up his chance

Growth is patchy, particularly, apparently, for olive oil producers. Photo / Herald on Sunday

Opinion

Remember Chicken Little? She was an annoying little bird convinced a falling acorn meant the sky was coming down. Chicken Little was so persuasive, other animals followed her on a journey to warn the king.

Along the way, a wily fox (foxes are always wily in these stories) listened to their tale just long enough to trap and eat them.

Today not a week goes by without some modern-day Chicken Little preaching the economic sky is falling. Here are five reasons to ignore what these doom merchants are spouting:

1) The economy is growing. Treasury data shows in the three months to March this year, the economy grew 0.6 per cent and, in the three months before that, it grew 0.9 per cent. The recession is over. Growth may be patchy, (especially in the olive oil market, it seems), but the economy has ceased to contract. Better times lie ahead - somewhere.

2) New Zealand government debt is low. Thank Michael Cullen for this. For every dollar his spendthrift colleagues squandered, he taxed one dollar and five cents. Although the level of government debt is now rising rapidly, the strong fiscal position means there is a lot of room to move.

3) Our export sector is heavily exposed to Asia and there are a lot of Asians. As they become wealthier they become bigger and they do this by eating our dairy. Treasury data shows our exports are growing.

4) House prices will probably continue to fall. This means the debt-fuelled consumption of recent years is over, which is bad for people selling $5000 television sets on credit or trying to build houses for a living. It will do little harm to people selling $4 hamburgers or mobile phones.

5) Crisis breeds opportunity. Great companies come out of financial turmoil, and if your business is doing it tough so is the one down the road. The opportunities are different now than three years ago but they are still there.

Tough times do lie ahead, especially for homeowners with negative equity, property developers and people who gave money to the now-gutted finance company sector. But there are 1.3 million of us with jobs and collectively $184 billion was spent in the economy last year.

Three things come out of a recession - opportunity, innovation and new businesses. In this environment, business owners (or potential business owners) should do four things.

First, be ruthless. Get rid of non-performing staff and drop products or services that are not making you money. Do not be sentimental.

Second, think about your market. Be aware of the larger trends of your industry, there is an opportunity there. Talk to your competition. Talk to your customers. Talk to your suppliers, your staff, heck, even your spouse. Think about this. Now think again.

Thirdly, act. Activity breeds opportunity. You started your business by taking a risk - take another.

Innovate. Do not just hunker down and wait for the recession to end. Go and get some of that $184 billion. Act while everyone else is cowering in the corner or running to Australia. Be the fox. Do not follow the chicken.