Headlines – read all about it

In the past when there were newspaper boys roaming the corner of the streets shouting “extra! extra! read all about it” bypassers couldn’t help but take note of the headlines of the day.

Unfortunately, those days are gone.

In place what we get these days are headline prompts via email or other messaging applications. The urgency to read these headlines went the way of the dinosaurs along with those familiar boyish shouts.

As entrepreneurs, while we focus on our business and the daily issues of keeping it afloat, we need to also be mindful of these headlines that makes its way to the papers or on the news portals. Some of these headlines could affect our business.

Headlines while they are shoutout of events that has just happened. They also are a harbinger of things to come.

These headlines could be local or remote in nature.

Some of them may even seem remotely disconnected to our business. Regardless don’t discount them. They may eventually affect us later.

So do try to spend some time to understand the headlines, the accompanying news and its impact.

Firstly understand Its effect on us directly. Secondly its impact on our direct customer. Last but not least, its impact on our customer’s customer.

Below are some examples of headlines that has impacted businesses

Subprime Crisis

A good example is the subprime issue in 2008 when the housing market in the US crashed and plunged the economies of various countries into a downward spiral.

Banks across the world became ultra conservative when issuing loans. This resulted in delays in disbursing loans, consequently, projects get delayed.

These delays, in turn, impacted the cash flow of businesses, large and small alike.

Those who couldn’t ride out the storm had to shut down.

Oil Prices

The fortune of those whose business depends on oil is like a rollercoaster ride.

When the price of crude oil goes up, their profits are squeezed. When oil prices go down, they rejoice.

A major event was the crash of crude oil prices in 2014/2015 when oil dived from USD112 to USD48 a barrel.

While the dip in prices resulted in cheers all around. Those companies who were providing alternative energy solutions were adversely affected.

With oil prices at an all-time low, alternative energy projects were either halted or slowed down in light of this development. All those involved in the projects from the main contractor to subcontractors to suppliers would all have to ride it out.

Elections

Another major event would be a country’s election as this could herald a change in government and subsequently policies.

In the recent Malaysian election when the incumbent administration was unexpectedly ousted from office, all projects initiated or undertaken by them were all put under review.

One major initiative by the previous administration was the High-Speed Rail (HSR) project from Kuala Lumpur to the island state of Singapore.

All those who had invested in business at station stops were negatively impacted. Moreso so if they had taken a loan to finance the business.

Regardless of the turn of events, the clock on the interest on these loans was ticking nonetheless.

 

As entrepreneurs, we need to be cognizant of these events and make an assessment on how it will impact our business in the near as well as long term.

Only then can we prepare for these headwinds and ride out of the storm.