The Keys to High Performance

What makes a high performer? Why do some people achieve greatness and others get left floundering behind.

When I was working with elite athletes at the AIS and in America, special forces soldiers, some high profile people in the entertainment industry and more recently with high performers in corporate organizations, I noticed some clear characteristics that set high performers apart. The good news is that it is not all about talent, ability and potential, it’s more to do with how they execute on a daily basis.

The most common characteristic that sets high performers apart is their ability to focus deeply on the tasks that they perform in a day. However as a society we are losing our ability to focus. It seems like the whole world has ADHD. There are three main reasons for this.

1. Attention deficit habit (ADH). ADH is a condition where the habits in our day are sapping our ability to focus. For example most people leave their email open and every time it alerts us to a new email we stop what we are doing and we go off and check it. Also we leave our phone on constantly during the day even when we are writing a report or meeting with someone. These habits actually set ourselves up to be distracted and train us to have poor focus.

2. Information Obesity – This is the result of shifting from a physical economy to a digital economy. We are overloaded with information and we have so much information coming at us we don’t have to focus on one thing for too long before something else will come and take our attention away. A recent report released by Proud Foot consulting said that information overload was responsible for a 10% decrease in productivity.

3. Multi-tasking - The greatest enemy of focus is this idea of multitasking, multitasking suggests that you can focus on many things at once. Reality is multi tasking is a very inefficient process and in reality all you are doing is focusing poorly on a number of tasks rather than focusing well on one thing.

New research tells us that the average employee in an office environment is interrupted 11 times in an hour. Sounds a lot but when you think about it most people are constantly responding to their email alert, answering the phone, having people come into their office, suddenly remembering things that they should have done and dealing with noise from open plan offices. What’s the fall out of all these interruptions?

The fall out is a massive reduction in productivity and creativity. A study by Basex found that office distractions take up 2.1 hours of the average day (28%) with workers taking an average of 5 minutes to recover from a distraction and re-focus on the original task. In fact a recent study conducted by The Institute of Psychiatry at King’s college London, compared the cognitive ability of people who had been multi tasking and people who had just smoked marijuana. Who came out on top? The drug affected workers.

The reason why is that multitasking is incredibly stressful on the brain, it impairs short term memory and concentration. The result is that the brain is left in an impaired state. This message is important for the leaders of the business. Due to distractions and interruptions people rarely get the time to think creatively and come up with innovative ideas. We need to minise distractions and start to focus again.

A recent study by my company Dr Adam Fraser Pty Ltd showed that the top 10 distractions were:

1. Emails – office alert and volume of emails

2. People – office colleagues

3. Phone – office and mobile

4. Distracting thoughts – thinking of the next thing to do

5. Noise - in open plan offices

6. Clients expecting instant responses

7. Personal Issues playing on your mind

8. Un-necessary meetings

9. Mixed priorities from management

10.Fatigue

So what is the solution how do we improve our focus? Well there are three simple techniques we can use to have the focus of a high performer.

1. Control Your Environment. Set up your external world to support focus, turn off the email, turn the phone off, and educate your staff on when you are not to be interrupted. Push back on the environment, don’t be a slave to your environment.

Strategies to minimise distractions:

* Turn off the email alert
* Check your email at certain points of the day, for example every hour or every two hours. ·
* During important tasks when you need to focus block all distractions or remove yourself from the office environment.
* Communicate to people around you that at certain points of the day you are not to be disrupted.
* If the noise around you is too great look at using ear plugs at certain points of the day.
* Have a clear plan of what you want to do; this will stop you bouncing from task to task.
* Practice being “present” this is where you calm those racing thoughts and only think of one task.

2. Formal Practice. An example of a formal practice is meditation. Years ago I thought that meditation was tree hugging, hippie stuff, however a huge amount of evidence shows that meditation has a beneficial impact on our cognitive ability. In its purest form meditation is about calming the mind and focusing on one task, this ability will translate into work.

3. Be Present. During the day practice focusing your attention on what ever is in front of you. Lose yourself in what ever you are doing. If you are writing a report focus entirely on that report without thinking of the other things you need to do later in the day. Likewise if you are having a conversation with someone totally immerse yourself in that conversation don’t let your mind drift. So often we have conversations and we are not really present.

Business is built on relationships, the greatest complement you can give another person is your undivided attention. However we all have a highly tuned BS detector, and we know when people are not truly engaged with us. Some people believe that being present is the key to team building. Companies spend millions of dollars a year getting people to build better relationships within an organization.

They usually spend this money on personality profiling, isn’t the first step getting them to engage and be present with each other? In addition some psychologist are now talking about the concept that people are creating fewer and fewer memories. The reason for this is that memories are created in the present and the fact that most people are either obsessing about the past or worrying about the future means that they are not laying down current memories. How sad!

This is the first step towards high performance. Go forth and focus!!!

Written by Dr Adam Fraser

It is a constant debate: what is the best investment? Is it shares or property? Should you buy gold bullion or tip extra money into your superannuation?

Lets have a look back at the past decade to see how these investments have performed.

Gold is the winner for pure gains but a rising Aussie dollar rubbed off some of the shine. Still, in $US per ounce it’s up a massive 284 per cent.

Houses

The median Australian house price has climbed 127 per cent in the past decade but there are big differences between the best and worst.

The big winners are Darwin (up 223 per cent), Hobart and Perth (both 208 per cent), data from the Real Estate Institute of Australia has found.

Adelaide’s median house price has climbed 176 per cent during the decade.

As a rule of thumb, residential property doubles every 10 years.

Sydney was the only city to underperform, with a 93 per cent increase.

However, this does not tell the whole story. The median Sydney price, currently at $569,000 is still below its $571,000 high in 2004.

Shares

It has been a rocky road for shares during the past decade, with two bear markets and a long boom. The All Ordinaries index of 500 companies is up 49 per cent over the past 10 years.

Australian Stock Report head of research Steven Dooley says the energy sector had a great decade as the oil price rose from about $US10 a barrel to highs near $US150 in mid-2008.

Consumer staples companies showed that slow and steady wins the race.

Superannuation

Super is technically not an asset it’s a structure to hold your investments and it has been hit for six during the past 18 months.

However, it’s on the way back up again, and for the decade the average balanced fund has still climbed 72 per cent.

The global financial crisis wiped 20 per cent off the average balanced fund in 2008, while the year before super was down 6.4 per cent.

But the GFC was not the only glitch during the decade. The 2002 Asian financial crisis caused losses of almost 5 per cent.

“The funds soon shook that off, however, and we had five strong years of predominantly double-digit growth,” SuperRatings chief operating officer Nathan McPhee says.

“People soon just expected that those extraordinary levels of growth were normal.”

Wine

Australians’ love of wine can be justified by investors to a point. Average prices of premium reds have climbed 78 per cent, although most wine is still traded on the secondary market for pleasure.

“The fine wine market is today’s modern spice trade,” Langton’s auctioneer Andrew Caillard says.

During the past 10 years, however, the wine market has developed a bit of a “cult phenomenon” where unheard-of wines can fetch more than $1000 a bottle.

“Don’t borrow money to buy wine. There are no guarantees of making returns,” Mr Caillard says.

Very rare wines, however, are a market to themselves with some Australian rare wine up 300 per cent this year.

Cash

It has been an uneventful start and finish for cash investments for the decade.

In December 1999 the average one-year, fixed-term deposit rate was 5.22 per cent.

Today it is 5.09 per cent, according to RateCity. The average during the decade was 5.3 per cent.

Unlike shares and property, cash does not deliver capital growth only income but is seen as a safe investment.

HSBC has some great offers currently. You can find them here.

Commercial Property

Listed property trusts offer the easiest access for investors to commercial property but what a shocker of a decade for this sector. The Listed Property Trust index fell 31 per cent.

During the decade, many trusts started at just 50 per unit, rode the back of the global property bubble up to $8 or $9 then tumbled back again, Australian Stock Report’s Steven Dooley says. Other trusts were wiped out.

Thoroughbreds

The average yearling sale price has jumped 88 per cent during the decade.

“The globalisation of the industry has been a boon to Australian horses because it has brought international investment and recognition during the past 10 years,” Inglis commercial manager Matt Rudolph says.

“In Australia, anyone can be an investor but in the UK or Europe, for example, it is often only for the elite. Here you can dream of winning a Golden Slipper or a Melbourne Cup. You only have to have a look at the past winners to see it can happen.”

Gold

If you put your money in gold 10 years ago, you’d be on a winner, with 284 per cent growth.

Although currency fluctuations have boosted the price recently, the sector is still seen as a haven and a growth asset.

There is a real bull market in gold, says Daily Reckoning gold analyst Bill Bonner.

“It’s what you buy when you think government is making a mess of the monetary situation. You put your trust in gold as an antidote, as protection, as wealth insurance.”

Diamonds

Diamonds have not been a girl’s best friend this decade, with virtually no growth a mere 0.5 per cent.

According to the international benchmark index of South Africa’s PolishedPrices.com, diamond prices roughly ended the past 10 years at the same place they started. However there were a few ups and downs.

PolishedPrices spokesman Richard Platt says diamonds reached a peak in August last year, but even that high translated to a mere 18 per cent increase since 1999.

So, the next time you are told in the jewellery store that it’s a ‘great investment’, refer them to this article.

Where have you found some great value from investments?

PD

Every business has a Unique Proposition that other companies in the same space can’t offer, but how do you make the details of this offering available to the masses?

There is only so much money you can throw at advertising and marketing companies to make your business stand out from the rest. And in many cases, it is very hard to measure the success of each campaign.

With the advancement of blogs, Twitter, Facebook, Linkedin, etc, etc. More and more people are jumping online to digest their information and in recent surveys, they suggest that almost 80% of people are researching their purchase before they actually buy it!

Even if you are sceptical toward online advertising and social media (Which I am, by means of attracting new business vis Social Media), you have to acknowledge the need for an online presence. But how?

Google Adwords seem to be a waste of time, Facebook advertising doesn’t seem to attract much attention unless you are selling a ‘cool product’. But have you considered a Merchant Account?

What is a Merchant? Well, many times on blogs and websites, you will see advertising, and this site is no different to any other in that respect. In that advertising, if the reader clicks on it and either signs up, or contacts the advertiser, the person hosting that ad will be paid accordingly.

The advertiser is the merchant. They pay a fee each time the ad is clicked. After some research I have been doing for the past few months, I have come to the conclusion that there are only a handful of Australian Only accounts that can be targeted this way. In my opinion, Commission Monster is the best and offers a variety of support and your campaigns can be tracked and measured very well.

If you run a small business, that can be promoted online, especially within Australia, you need to consider trialing this service. I would love to hear some stories about how you have been successful with your online advertising. Please share below.

The December and January period is normally a slow time for small-to-medium sized businesses, with most customers on holidays, suppliers operating on skeleton staff and budgets on hold. An article from Australian Anthill offers five tips for surviving the Christmas slowdown.

“Hope for the best, plan for the worst.”

Business owners and entrepreneurs are notoriously optimistic about their businesses and that is often the key to their success — optimism creates the energy needed to tackle inevitable business challenges. But optimism should not come at the expense of prudent planning, particularly when it comes to seasonal slowdowns.

Here are some tips to help you start 2010 with momentum:

1. Stay on top of invoicing.
   There may have been a mad rush to supply customers prior to Christmas. Prompt and accurate invoicing is obviously critical to managing cashflow, particularly if your clients and customers are themselves going to be away over the holiday season.
2. Consider different scenarios.
   Many businesses are finding it more difficult to forecast in today’s dynamic and tumultuous economic environment. As a result, business owners should ensure that they consider a number of potential scenarios for how their businesses might operate over the holiday season. For example, ask yourself, if sales are 10 percent lower versus the same period last year, then what does that mean for us? Or, if the sales we expect to have in January are deferred until February or March, what will that mean for our cashflow? Often, planning for the worst-case scenario is the best approach. At the very least, it will help you sleep at night!
3. Know the availability of your key suppliers.
   It is important to know if your key suppliers and partners (including financiers) are available during the holiday season and into January. You don’t want to be caught out needing something from them only to find out that a decision-maker will be overseas and not able to give you the necessary support, without having a backup arrangement.
4. Consider financial alternatives.
   With traditional bank funding becoming all but non-existent for small business, SMEs should consider alternatives, of which there are a range of different solutions, depending on the need. At Christmas time, a more flexible approach can be attractive to small businesses because they may not need a long-term solution.
5. Implement mandatory annual leave.
   It may be too late to enforce this year, but companies with full-time staff should consider enforcing Mandatory Annual Leave during traditionally slow periods. Many Australians do not take their annual leave (see the Government’s “No Leave, No Life” campaign) and the accumulation of annual leave entitlements can become a problem. Businesses should consider closing down when activity levels are slow. The period between Christmas and New Year’s is an obvious time to consider closing. This will have a significant impact on cashflow for companies that carry contractors. As an additional benefit, it’s a great opportunity for the business owners to recharge their batteries

If you have a current income protection policy, and any old superannuation, you should consider rolling them together and having the super deduct premiums from your account. To find out more, please contact us below.

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The Little Blue Book of Advertising:

This is probably one of the best business books I have ever layed my hands on. By Steve Lance & Jeff Woll, it explains in detail, the simple way to get your message across to your customers, clients, B2B prospects about what you do in a non invasive way.

For any small to medium business owner, this is definitely one book that should be considered. These two marketing geniuses have a comical way of putting things which make it look and sound so easy, it makes you act on what you are reading.

They are realists who know that not everything in a book i relevant to the reader, so one of their first pieces of advice to the reader is to skip through the parts you don’t need and come back to them later.

I give it 5 out of 5 thumbs for content and originality. See it here at my bookstore

You can follow Steve Lance on Twitter at www.twitter.com/stevelance who has some funny insights into the business and success world.

my bookstore at Amazon.com

The little blue book of advertising:

Happy reading!

PD

Just when you thought Google has invented everything to do with search, and online activity, they add some more things to their Google Maps application. Now property investors can quickly check out a property’s location, rent, property type and real estate agent.

All these criteria can be searched through a filter of these criteria to help you find the perfect investment property or your new home.

As always, you can also check the street view to have a look at the actual house or street. This is especially handy if you are buying properties interstate or overseas, as many people are doing now.

By clicking on a marker (circle) provides all the information you will need, such as the agent and their details and website.

If you are a Real Estate Agent, it can also be used to link on your website for people to look at, which can be a valuable marketing tool, and of course, helpful with your SEO.

Good luck finding that new property!
PD

Happy New Year! Now that there are new laws and tax rates to apply from this week onwards, I thought I might give you the upper hand on wat the main parts have changed which will more than likely affect you.

The new tax rates means that the 30 per cent income threshold is increased from $34,000 to $35,000 and the 40 per cent tax rate is reduced to 38 per cent.

An individual on $40,000 a year will get an extra $2.88 a week, while someone on $100,000 a year will get an extra $10.58 a week.Don’t go and spend it all at once!

The Family Tax Benefit A has also risen by $5.60 a fortnight for each child 12 and under and by $7.28 a fortnight for teens aged 13-15.

The baby bonus will increase by $185 to $5185, while childcare benefits for one child using full-time care will increase by $6.50 a week to $180, and the maximum childcare rebate will rise by $278 to $7778 per child per annum.

If you were planning on putting larger sums of money in your transition to retirement in the coming years, I wouldn’t hold your breath with a decrease in the super contribution cap being halved - from $50,000 to $25,000 for those under 50 and from $100,000 to $50,000 for those older than 50. After the past few years, and maybe those to come, you will need to top up that super balance before retirement.

A huge bonus for NSW residents is the NSW Government will cut duty by 50 per cent for people buying newly built properties with a value not exceeding $600,000 from July 1. If you tie that into your $2.88 week saving, you may be going places! Unfortunately, the savings you make up on the stamp duty, will be taken back in parking levies for those living in Sydney with levies doubling as of 1 July from about $950 to about $2,000 near the city, and marginally less in the inner West.

VICTORIA

First homebuyers in Victoria are eligible for up to $36,500 in grants. The Victorian Government will provide up to $22,500 for those buying new houses in regional areas and $18,000 for those buying in metropolitan areas. This is in addition to the $14,000 Federal grant.

QUEENSLAND

not much to write home about in Queensland with rates are also set to soar in south-east Queensland. They will jump 8.7 per cent in Redland, 5.4 per cent in Moreton Bay, 6.45 per cent in Brisbane, 7.5 per cent in the Sunshine Coast and 6.9 per cent in Logan. I suppose that will give the NSW counterparts something to finally smile about once the football season is over.

South Australia

In South Australia stamp duty will be eliminated for mortgages and rentals in a move set to cost its State Government $183 million over four years. So, some very positive news there. Interstate Pollies watching the SA government at all???

So, in the end, there are some very positive cuts in tax and increases in general bonuses, which hopefully will give business the kick along it’s been waiting for.

Is there anything the governments can implement that would dramatically benefit yout local area or demographic?

Have a great New Year.

PD

A great article written by Belinda Cook in 2007 from Australian Anthill Magazine about turning your business’ profitability around. I think you’ll find it helpful. You can find Belinda’s site HERE

Every business owner knows the importance of running a profitable and lean team, but when was the last time you took the pulse of your operation? How long has it been since the processes were examined to identify possible wasted produce, or double handling, or time efficiencies, or cost reductions, or new selling opportunities. , or improved technologies and materials?

All businesses need regular review against targets to monitor progress and this becomes even more critical during tough economic times.

To avoid becoming one of the statistics and keep you leading the competition with a healthy profitable business, combine regular review and improvement of procedures with new ideas and innovations from your team.

‘How?’ you may ask. Where do you start? The following are a couple of suggestions to help you on your way:

Suggestion #1: What do you do?

Identify exactly what your company does. This may sound like an odd strategy, so hang in there with my thought process for a moment while I explain further.

Identifying clearly your core company purpose provides a gauge with which to measure each business process and ensures everyone has the same understanding of why you are all there.

Think about a normal work day. Do you and your staff spend the majority of your time working to achieve this core purpose? What is the breakdown of a normal work day for core and non-core business activities?

Suggestion #2: How do you do it?

Question each back-of-house procedure (non core activities), against the relevance of achieving your company purpose.

If, for example, you were in the business of supplying glass, how much of the day is spent taking customer orders and filling them (your core business) and how much time is spent on other non-core business activities? If the balance is disproportionate, look for ways to improve your business procedures using simple problem-solving skills.

Example: List each non-core activity that takes up your time, and for one week identify how often these activities occur by placing a tick next to them, or timing how long they take you to complete. At the end of the week, tally-up the figures. Whichever has the highest occurrence or takes up the majority of your time is where you start examining for improvement opportunities.

Suggestion #3: How does it feel?

Have you experienced your company through a consumer experience? Pretending to be a customer can open your eyes to shortfalls and difficulties experienced while trying to purchase your product or use your services. Also, just ask them; survey your customers about their experiences with your company.

Do your customers get shuffled between departments because of unclear instructions, or misunderstood job roles? Is the information your customers need easy to find?

How easy do you make it for your customers to recommend you to their friends?

Suggestion #4: What’s happening on the inside?

For internal customer processes, try tracing the path of a customer order or inquiry through each department. Do all departments use the same information or do some require additional data? Is there double handling? Can all the information be collected at the beginning and shared between departments automatically?

Can any of your manual processes be automated? Are all the steps in the process necessary?

Alarm bells should be ringing loudly if the answer “This is the way it’s always been done” is offered as an explanation to any procedure, and would be an ideal place to start dissecting your operation.

Suggestion #5: Are you happy?

Encourage your employees to look for areas of improvement and equip them with some basic problem-solving skills. The benefits of staff helping with procedure streamlining of their areas creates overall operational efficiencies as well as helping your team to develop ownership and control over their environment. Actively engaged workers who are empowered to find new and improved ways to operate will continue to evolve, offering improvements and innovations that benefit both themselves and your business.

Gain a reputation as being an employer of choice, with staff empowered to improve their own working environments, offer ideas, find solutions, and reduce non-core business problems.

Suggestion #6: Are you lined up?

Out-dated processes often lead to ‘work around’ solutions. If enough time passes, what should be a clear line between customer order and delivery gets looped around in unnecessary circles of business processes.

Examine any procedure that passes through the same department/area/desk closely to find where the system is falling down and straighten out the loops.

Would updating the order form with prompts for all necessary information be helpful? Do you need to document manufacturing lead times so customers know when to expect delivery?

Suggestion #7: Great team and great ideas

Groups will offer multiple view points and varied ideas on solutions to any issues you come across in your business. Use a collective brain to improve your business by gathering small groups for each area to meet regularly, or alternately start with a simple request to your entire team: “Is there a better way to do this?”

All business benefit from operating in a cost effective manner (expenses cut straight into profits). People directly involved in each of your operating processes will provide the best information relating to issues they encounter in that area, and often the best solutions.

Set up a regular review process for all your business procedures and monitor the progress to ensure continual improvement is one of the foundations of your business.

Start today. Start now. Ask a simple question: “Is there a better way to do this?”

Do you have any stories to share that will help small business? Is there something in particular that you have done that has worked exceptionally well? Comment below or EMAIL me at paul@protectmywealth.com.au

PD

My wife and I have discussed Solar energy for at least 12 months now,  considering we live in a new area, and the next place we plan to move to will involve building again. This puts us in a unique position to be able to direct the builders to link much of our electricity needs to solar, saving a fortune in the long run.

Until last Tuesday, the government was giving Australians a rebate if they chose to go ahead with installing solar energy to run your household. And with atake up of about 80,000 households, this was off to a good start. Why on earth they would cancel such a thing is beyond me! Especially after KRudd and many other vocals about the need for greener energy and government’s help toward becoming greener (because that seem to be the only way this is going to happen anytime soon).

In the news report from news.com.au, several people interviewed had ordered the solar and submitted paperwork for a rebate, but now are being told it has been scrapped if you hadn’t done it prior to a certain date.

After hearing a lot of ‘green’ talk in elections, both her and around the world, it’s becoming harder to understand where they are going with all of this, because it seems they implement one thing, and then in the interests of business, they terminate something that was looking like a success. If they are serious about combating the onsets of global warming, and reducing carbon emissions, they need to start sticking to their word (as hard as that is for pollies) and implement more of these schemes.

But it begs the question – Is it worth going solar? Financially speaking, upfront it can be a bit of a stretch, but if you plan to live in that particular home for a long time, then it definitely has it’s upsides. Plus the fact that you don’t jhave to see an integral energy bill hitting your doorstep ever again.

I decided to delve further into the actual costs of getting solar panels, and how much it would take to run my house. We have a relatively average household of 2 adults and 3 children.

Size & Watts: The cost of a panel depends on the Watts it puts out. Basically, panels are priced usually in dollars per Watt. Basiclaly a 100Watt panel will generate 100Watts of electricity per hour.

One of the hardest factors to determine is your energy usage. This will vary every day. The problem is from day to day, the amount of energy you use is not going to remain consistent; however, you should be able to calculate an average of your energy usage. It is always better to over estimate rather than underestimate.

A good rule of thumb is to first calculate your average daily usage and then multiply that number by .25. This will give you the number and size of solar panels you need in kilowatt-hours. Your electric meter provides you with a very straightforward way of knowing how much energy you are using each day.  Your meter should have either an odometer style readout or a dial type readout.  Your electric company should be able to provide you with instructions on how to read your meter if you are unfamiliar with it.  All you will need to do is record the meter reading and then 24 hours later record the reading again.  This will tell you the kilowatt hours you have used.  You might want to do several readings and average the results you get over a couple of days. Or just work it out from your bill.

Once you have figures out the amount, you need to find the right solar panel. There’s quite a lot of different panels varying from output of Watts and Amps. Generally speaking, it seems like the more expensive they are, the more power they output, which then uses less roof space.

In the end, it will generally take about 15-20 years to pay back the savings of your investment. Depending on your opinion toward climate change will depend on whether you think this is a worthwhile investment.

For me, it’s just a matter of giving government and large organsations les control over what I spend, along with the knowledge that I have contributed less towards the destruction of the place where my children will grow up.
By the way, I’m no greenie and don’t hug trees, but I do think that while we are gifted with a place that has so many things to appreciate that are beautiful, we should at least ‘try’ to do something small. Or in plain English, just give a toss.

Here are some links to help you in your research toward solar energy, and try to write a letter to your local member on the importance of giving us an incentive for doing things such as these.

Have you already installed solar at your work or home?

www.energymatters.com.au
www.gepower.com

PD

Last night the International Monetary Fund declared the world will experience the deepest and longest recession since World War II, with global economic growth set to slump to -1.3% this year.

The bad news comes just days after Reserve Bank documents revealed the Australian economy is likely to contract by around 1% in 2009.

But what will a deep and long recession actually mean for Australian SMEs? Here are a few of the key issues entrepreneurs will need to watch out for.

Cashflow

Every business owner knows how tight cashflow is getting - average payment terms have now stretched to over 57 days, almost twice the standard term.

The message from Dun & Bradstreet chief executive Christine Christian is; get ready for cash to get even tighter.

Her agency revealed yesterday that it has downgraded the risk ratings on a record number of businesses in the last six months: 150,000 business are now considered at risk of not paying bills on time and 130,000 companies are rated as being at increased risk of failure.

It’s time to start monitoring cashflow every week, if not more often. Late payers must be followed up immediately, and don’t be afraid to pester them for your money - the squeaky wheel often gets the oil.

If you feel your debtors situation is getting out of control, consider getting help from a debt collection agency - most of them only charge when they collect the debt.

Customers

According to Westpac’s consumer confidence index, households are actually feeling a bit more positive about their situation right now. Don’t expect this to last. As soon as unemployment starts to rise (and most economists are tipping it will hit 9% in the early stages of next year) then consumers will shut their wallets.

This is the time to look hard at your customer base and try and figure out how a recession will affect them. How is their sector performing? Is the CEO getting grief from head office overseas? Are they a subsidiary of bigger group that is struggling?

Not only will this help you identify the customers who could be at risk of not paying on time, but it will also help you pick the customers who are in the best position to get through the recession.

Make sure you get especially close to these customers. Most customers are going to be far less tolerant of mistakes and far more demanding of discounts and better payment terms, so relationship management will be crucial if you want to meet their needs and protect your margins.

Directors and investors

If you are feeling nervous, so are you shareholders and board members. They are going to want to see even more information about cashflow and financial performance. Keep talking to them and remember the golden rule - no surprises.

Take a tip from Bakers Delight general manager Chris Caldwell. His company is going to the extent of checking the financial health of their shareholders (in this case, their franchisees).

“One thing we need to be very cognisant of is what their own financial position is like, and whether they as individuals have suffered anything outside of Bakers Delight, whether the investments they have got have faltered and are placing them under stress.”

Access to finance

As cashflow becomes tighter, bad debts increase and more companies start to collapse, the banks are going to clamp down even more tightly on business lending. New finance will be more difficult to come by and the process by which the banks have been re-rating businesses and increasing the loan rates will continue.

If you want money, be prepared to be asked for a wall of documentation. Tony Markwell, national head of privately held business at Grant Thornton, says banks want to see “three-way” forecasts, where a cashflow statement, a profit and loss statement, and a balance sheet are combined.

However, it is likely that the recession will weigh heavily on business investment, which means the fewer companies are going to need to access finance.

Managing people

Leadership and people management are going to become even more important as the recession drags on.

First, you’ll need to get your labour cost base right. If that means making staff cuts, do it sooner rather than later. If you want to try and hang on to staff for the recovery, you’ll need to look at options such as four-day weeks, leave without pay or salary reductions.

Second, you need to keep your team motivated. Gary Cohen, chief executive of software provider IBA Health, told SmartCompany recently that this all comes down to communication. “Obviously, you can’t share everything that is going on in your mind, but you have to give enough visibility that you are looking after their long-term interests and that you are looking after the business’s long-term interests. If staff think you are out for yourself or looking after somebody else’s interests, they won’t trust you.”

Finally, think about whether you can pick up any talent in the downturn. Federal Treasurer Wayne Swan has warned unemployment could hit 10% by the end of the downturn, which means there will be good people dying to work for you.

Stress

Getting through this recession will not be easy. SmartCompany blogger and clinical psychologist Tim Sharp has a few tips for dealing with stress:

•- Simplify; take some time to clarify what’s really important (and what’s not) and stay focused on your real priorities (personal and working).

•- Keep up your energy; don’t let your diet, exercise or sleep slip. It’s hard to be happy if you’re literally sick and tired!

•- Develop optimism; face up to the cold hard realities, what ever they may be, but make sure you face them in a constructive way, and in addition, do what you can to also actively search for positives.

•- Don’t feel you have to do it all on your own; resilient people are better at reaching out to others and appropriately asking for help.

•- Use your strengths to deal with your problems; give some thought to what you’re best at and how you can use these attributes to take on these adverse circumstances.

•- Practice gratitude; as bad as things might seem try not to forget that there are almost certainly others worse off.