The challenge of increasing interest rates will be real to many. It might help to remember just 4 years ago the rates were higher – you survived then, and you will survive now.
In the office this week we had a conversation about how we could respond to the increasing rates. Here are some of our ideas:
Improving Efficiency
Discuss with your mortgage broker or banker what options are available to you. Perhaps fixing part or all of your loans, interest only for a time, moving to a new bank?
Could a portion of debt be tax deductible? This could have a significant impact. For example, to have $10,000 of after tax income available to pay your mortgage interest, you need to earn approximately $15,000 and pay $5,000 in tax. Give us a call and see if this is a possibility for you.
Living Costs
When the surplus in the family budget has been eroded, we need to make conscious choices about what we can reduce.
Preparing a household budget is a valuable and often scary process. What does it actually cost to run your family?
Increasing Income
The best way to make profit is to stop making losses!
Maybe take a little time to consider these questions and see where that leads you:
What are you doing for free that you may be able to charge for?
Are there services or products that have very low margins? Should we stop doing this and use the resources to focus on higher margin services?
Are all of your customers availing themselves of all of your services/products?
Which team members are stars – how can they be involved in improving the performance of the non-stars?
What is the true cost of delivering your service?
What is a fair price for your product? Fair for you and for your client.
There is always something that you can do! We are here to help your business thrive, so if you want to discuss any of these ideas, come in for a coffee or book a Zoom call.