What can the Greek crisis teach Aussie business?

The impact on Australia

So what are the implications for Australia? Not much, really.

Yes, the local share market got spooked and dropped a couple of per cent. The ASX has shed $20b and our dollar hit its lowest point in six years (though this was based on a combination of factors). But we’ve already seen a rally since the first real fears of a Grexit hit the market – so any effects are likely to be temporary.

To put it in perspective: Greece’s GDP makes up around one quarter of one per cent of the world’s GDP. The Greek economy is actually smaller than Victoria’s economy.

It’s understandable that this Greek tragedy (I had to go there) has captured our attention – it’s a unique challenge to the EU, and according to the 2011 Australian census, the Greek population ranks within Australia’s top countries of birth, and has done for a decade or more.

Lessons learned

Whether a business, household or country – if you take on too much debt, you can get choked out.

There are business owners (or households) hurting just as much as Greece. They’ve overcapitalised, and are under severe cash flow pressure. It only takes one debtor to fall over, one payment to be missed, and you’re stretched too far. Your credit rating can be affected, making it hard to secure finance through the traditional channels. Like Greece, you become reliant on friends, family or financial institutions to give you a loan.

The solution? Face debts head-on and deal with it – then you can start the process of negotiating a better deal, and put a plan in place to get back on track. You can’t underestimate how liberating this can be. 

Have we got it wrong?

Another way to look at this whole saga – which is pretty controversial for a finance commentator – is to ask: have we got it wrong?

Is our ‘growth at all costs’ mantra sustainable? More to the point, will it give us the quality of life we all were promised… or have we become bigger slaves than ever to the machine, needing to work longer and harder to pay for our prosperity? Putting more focus on lifestyle, while not great for the economy, definitely is good for the soul provided we don’t expect to maintain the same living standards, of course.

If we as business owners can’t lead the charge to a better work/life balance… who can?