your own worst enemy

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your own worst enemy what if the biggest threat to your livelihood this recession was you? by Andy Mark. 6. TAXtalk January/February 2009 ...
your own worst enemy What if the biggest threat to your livelihood this recession was you? by Andy Mark

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TAXtalk January/February 2009

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ew vehicle sales in South Africa dropped by 21 per cent in 2008, forcing retrenchments, dealership closures and a flurry of repositioning as smaller outlets were gobbled up in a last ditch bid for survival. In the UK “the worst recession since the Second World War” has already seen Woolworths (which would have celebrated its 100th birthday this year) close the door of its last store on 6 January, spelling unemployment to 27 000 people. At time of writing, ABSA parent Barclays Bank lost 50 per cent of its share value in a single week’s trading … 30 per cent of which was lost in a single dark hour just before closing one bleak Friday afternoon. ABSA itself is shedding 1 210 jobs. In South Africa, 100 000 jobs were lost in 2008, with even more expected during 2009. Across the world, industrial juggernaut nation China is also experiencing massive job losses, even with a six per cent GDP growth, as their manufacturing sector battles to come to terms with cancelled orders from recession-hit USA and Europe. Many Chinese workers have done the unthinkable … resigning their jobs ahead of the New Year celebrations in the hope they will be paid before an expected wave of manufacturing sector bankruptcies during the holidays. Let’s face it: times are tough and it stands to reason that you can expect a similar downturn in your brokerage, doesn’t it? For some intermediaries the pain is already being felt in their pockets via lapses and early policy surrenders. Money is tight and for a number of brokers the threat to their livelihood is suddenly very real. But you want to know what the real problem is? I believe it’s in our own heads. It is so easy amidst all this bad press to accept that all news is bad news. But it may not always be so. Take our crippled retail motor sector for instance: sure the numbers show that the sector sold 140 000 fewer vehicles in 2008 than it did in 2007. And I certainly do not mean to make light of the predicament facing the many families affected by retrenchments, but that still leaves sales of over half a million vehicles sold in South Africa during the year. Somebody somewhere did the deals and earned commission processing the paperwork. In the gigantic USA market, analysts are predicting 2009 sales of just 10.5 million vehicles. Which when considered against our tiny market, really puts things into a more positive perspective. Factor in another story that isn’t making front page headlines that often: thanks largely to Toyota’s export programme, our vehicle exports are actually up by sixty-six percent. If cars are being sold and you happen to be a car dealer, then shouldn’t you be making sure that they are being sold off your floor? If business is still being written in this economy, then why not by you? Right now is when your clients need you, more than ever, to save them money, keep them covered and to offer the best advice you know how, to help them through he dark days that lie ahead. This is no time for you to let self doubt and negativity impact on your ability to write good business. I have a good friend in the short-term industry – a broker with over two decades of experience under his belt. “When times are tough, we always do well,” he told me recently, “when people are flush, saving a few bucks on premium is neither here nor there for many policyholders, but when times are tight, folk are much more amenable to change. Even a hundred Rand saving could swing the deal.” What is really worrying is that many intermediaries we speak to are simply shrugging their shoulders and adopting a ‘what can we do’ attitude to the challenges facing their industry. Their clients are migrating to the direct insurers, their policy lapse ratios are on the increase and still they sit there: “What can we do? It’s the economy”. Maybe, but it is much more likely to be the result of a less-than-positive attitude. There are some things we can do to counter the sea of bad news we face currently and stay on top of our mental game – which is our best chance of surviving and even growing our business during a recession. • First thing every morning when you wake up, run through a mental inventory of your assets. I don’t just mean a paid-up car or money market account (although the more you have of these, the less a recession could impact your lifestyle). No, I mean the important stuff: a loving wife, your kids and your health. Be grateful for the real assets in your

life. A sound appreciation for what is most valuable will help counteract all the negative imagery the news channels are going to throw your way during the day. • Commit a random act of kindness – and do this anonymously every day. Now I am not sure how this works – and I am not trying to force some airy-fairy karma deal on you, but work it does. Perhaps the act of giving allows us – no matter how dire our own situation – to feel empowered? Try it. Go buy school stationery for your domestic worker’s child; clean out your cupboard and take your cast-off clothing (personally) to a shelter; hold a door open for a mom sukkeling with her pram at a shopping centre. Do it without telling anyone and you will leverage that lekker feeling into a positive day. • Take a break. Out of the blue, go fetch your kids from school and take them for a walk in park or take an hour off from your day to watch them at rugby or korfbal practice – your clients need you to be on top of your game right now and an hour or two may be all you need to de-stress. Your kids may not admit it, but they’ll think you are kind of cool, too. • Tell your spouse what you are going through. It is typical of many of us that we clam up when we are faced with seeming insurmountable challenges. Communicating with a spouse helps two ways: you get to dump some of the baggage you have been carrying around inside; and secondly, your spouse gets to understand why you’ve been acting like a bear with a sore head the last few weeks. • Limit the bad news intake. Sure you need to stay abreast of current events, especially now, but try and limit news to an hour a day. Ditch the news radio for music when travelling to see a client and keep the TV off during mealtimes. • Use current events to educate your children. We all spoil our kids. Now is a good time to explain that the economy works in cycles and elicit ideas on how the family can cut costs. Use this time to teach your kids real life skills. Being realistic with your family will take a load off and you will no longer be burdened with having to keep up appearances. • Self speak. Be vigilant against negative self speak. Saying (or thinking) things like ‘this is just my luck’ subtly colour your thinking and attitude. • Surround yourself with ‘glass half-full’ people. There is no bigger threat to your livelihood than to spend your time with chronically negative people. You know who I mean; those folk who always have something to complain about and just seem to continually have bad luck. There is a reason for their bad luck, and it is their negativity. Negativity acts like a magnet. Avoid these people at all costs. Find positive people to spend your time with and bask in their reflected happiness. It rubs off. • Finally: focus on your end game. Set targets for 2009 and revisit them regularly. Paint a positive vivid picture of where you and your business will be by the end of this year and visualise this end-game every day. Do this often enough and you’ll be surprised how every action you take, little by little will head you into the direction of your end-game goals for 2009. Don’t ever, ever, underestimate your ability to get through this. So while you may not always feel in control of the key influencers in your life, you are in control of your response to them. Like any top athlete, the level of your mental preparation is proportionate to your chance of victory. Crazy times call for a cool head as you face the challenges that lie ahead. Mental preparation and a can-do attitude backed by a sound business plan will guarantee your best chance of success this recession. Ring-fence your assets, perform a stringent risk analysis on all aspects of your business and thank God you are not Barack Obama, Gordon Brown or China’s Hu Jintao – now those boys have got real problems…. Reprinted with permission of RiskSA Magazine.

2009 January/February TAXtalk

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