While the vast majority of us fared okay during the pandemic, the hangover of the stimulus measures, higher debt levels, high inflation, labour shortages, high material costs and supply chain constraints have meant that business conditions are extremely volatile.

We are more than likely headed for recession over the next 12 to 24 months with little ability of the Reserve Bank or the Federal Government to avert the inevitable.

Below are some of the major headwinds facing business over the next 6 months:

  • Supply chain – Inventory management. ‘Just in case’ has replaced ‘Just in time’
  • Increase in material costs – Commodity shortages and supply chain issues causing increasing cost of materials/products
  • Increase in wage costs – Labour shortages throughout economy
  • ATO enforcement action – Increase debt recover expected
  • COVID outbreaks – Businesses will still need to deal with COVID issues – customers/employees/suppliers
  • Landlord moratorium ends – End of government code impacting landlord enforcement/recovery rights
  • Key sectors in economy facing pressure – Construction, hospitality and retail

Given the current conditions, now more than ever it’s important to understand your businesses position and forecasts over the next 12 months.  As such, now more than ever, completing a business review to take stock of the current position may be the difference between taking advantages of opportunities or failure.

Supply shortages and extended lead times in many industries may result in many businesses not being able to achieve their contractual arrangements.

It is recommended that all businesses undertake a Business Review. Download our helpful 2022 checklist.