Overcoming business anxiety

It is accepted by everyone from the Governor of the Bank of England to the Hot Dog seller in the street that the best way out of the recession is for people to spend money. In simple business terms things would get going if everyone picked up the phone, NOW, and bought goods or services from someone else. (And even picking up the phone is itself an act of spending money.)

Paradoxically, it is accepted that government needs to spend less. What is not accepted by all is where the cuts in government expenditure ought to be made and how far the cuts will impact on the recovery.

In business, we need to keep the wheels of commerce well-oiled and constantly turning and yet the conflict between spending and cutting costs is proving tricky to manage for all.

When the Chancellor George Osborne outlined his approach to government cuts, certain tests on expenditure were outlined:

  • Is it essential?
  • Does the government have to be involved?
  • Does it make economic sense?
  • Will the needy gain?
  • Could it be cheaper?
  • Could it be more effective?
  • Could the private sector do it better?
  • Can the private sector do it better?
  • Can it be done locally?

Now the cuts have been announced, I wonder if the tests have been successfully applied? For example, I can think of at least one area (which was in fact ring-fenced – Foreign Aid) that seems to fail all the tests above.

In business, we cannot be so cavalier with our spending and how we seek to control it! We all have to find a way to spend, spend, spend to turn the wheels of commerce whilst controlling costs of the ‘oil’. Business confidence is the only way to balance these demands so that fear for the future no longer inhibits commercial activity.

Are we seeing that confidence return? Are we overcoming business anxiety? Are we lifting the phone or tapping on the computer to buy goods and services?

Published on Nov 07, 2010 by Neil Thomas