Could "Confidence" Be The Most Important Word In Business?
We’ve all heard of Business Confidence. The Business Confidence Index (1) is a tool that is used to assess the strength of businesses in Australia.
The most recent NAB report states “business confidence strengthened in October, bolstering the sharp pick up in sentiment in September. The improvement in confidence in the month was consistent with increased speculation that the RBA would cut rates ...... while European Finance Ministers appeared to be taking more decisive steps to try to resolve European sovereign debt problems and more favourable activity data out of the US appeared to have allayed fears of a double dip recession."
Then there’s Consumer Confidence. Consumer confidence is the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation. Across Australia, consumer confidence rose 6.3% in November to 103.4 points from 97.2 points in October of 2011. (2)
So, based on these reports, as business owners, we should all be feeling a little more confident about our business prospects, right? Well maybe.
There are other forms of confidence which to me are far more important to the success of your business. What are they?
Well, first there’s confidence in your product. Are you confident that you have a product or service people want, and will this continue to be the case in the future? Do customers have confidence in your product or service?
Second, there’s confidence in your systems. Are you confident you have the systems in place that will deliver the best solutions for your customers? Are customers confident you can meet their needs?
Third, there’s confidence in your people. Do you have confidence that your people are able to deliver products and services in a way that will keep your customers coming back? Have you ensured your people have the confidence they need to be good at their job?
And fourth, there’s your own confidence. Do you have the confidence to drive your own business success? Do you have confidence in your own skills and abilities – enough to take control and make the important decisions?
Some businesses will thrive while others will struggle, no matter what the broad indicators are showing. But your business will always perform better if you pay attention to your products, your systems and your people, including yourself. I am confident about that.
(1) This index is managed by the National Australia Bank, who publishes monthly and quarterly the result of business surveys carried out on Australian organizations and businesses. Hence, it acts as a useful tool for evaluating the overall economy of Australia.
(2) The Westpac Melbourne Institute Index of Consumer Sentiment is an average of five component indexes which reflect consumers' evaluations of their household financial situation over the past year and the coming year. How confident people feel about stability of their incomes determines their spending activity and therefore serves as one of the key indicators for the overall shape of the economy. In essence, if consumer confidence is higher, consumers are making more purchases, boosting the economic expansion.
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