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Lee Pryor

  • Posts: 2287
Interest rates will be starting to go up in the next 12 month. This means peoples mortgages will be costing more. Do you think customers will be looking at where they can cut back to save money. For example getting rid of their window cleaner?
The best way to predict the future is to create it.

Johnny B

  • Posts: 2385
Re: How do you think rising interest rates will effect your business
« Reply #1 on: June 28, 2014, 12:13:46 pm »
It will depend on how much the rise in interest rates, and the cost of living in general, will affect their level of disposable income. People will need to prioritise their finances, and if they feel that they will need to cut down on their window cleaning costs, they will.

If you are asking how many people will drop their window cleaner, my answer is: I don't know.

John

Being diplomatic is being able to tell someone to go to hell in such a way that they look forward to the trip.

Window Lickers

  • Posts: 2196
Re: How do you think rising interest rates will effect your business
« Reply #2 on: June 28, 2014, 01:32:00 pm »
Did the recession affect your business Lee?
Liberace's ex looking to meet well built men for cottaging meets.

supernova77

  • Posts: 3547
Re: How do you think rising interest rates will effect your business
« Reply #3 on: June 28, 2014, 02:36:19 pm »
What happened when interest rates went up last time?

I doubt the whole domestic window cleaning market collapsed.

You might loose a few customers - it depends on your customer base.

I've tried to build my business with customers who are financially secure - the retired type with a few hundred thousand sitting in the bank who own their house outright - or well paid professional couples etc...

Stay away from building a round full new housing estates I say!

Rich1969

  • Posts: 16
Re: How do you think rising interest rates will effect your business
« Reply #4 on: June 28, 2014, 07:20:44 pm »
The more affluent older folk will see an increase in their income from higher interest rates on their savings so least likely to feel need to reduce outgoings. Now might be a good time to recruit some into your round if you don't have many.

There are other social groups who will benefit from increased interest rates, as a gross generalisation any one who has no debt. get more of these on your rounds if you can.

The impact on those of us with debt (mortgages, cc. loans etc) will of course be dictated by the size of rate increase, but in the main I think most 30 - 55 early to middle aged who have been on the property ladder for some time & thus built up reasonable equity in their homes will have been quids in since 2008 due to ultra low rates, so most will have some cushion in their income to absorb a 1 or 2% increase.

The buy to let market will probably take a hit, so be mindful if you have a lot of these. and there are loads around at the moment as the kids cant afford to get on the ladder anymore!

The current house price boom (south east) will be tempered as the housing market slows so at least you wont lose customers through moving, but the flip side is limited opportunity to gain new customers from new folk moving in.

For those who have alot of shoe boxes under their beds, you might want to start thinking of ways to get that cash invested to benefit from better returns offered in isa's or other investments.

Be aware that rising interest rates usually mean lower inflation, as window cleaning is a relatively low (materials) cost business there is limited opportunity to benefit from low price increases for our supplies and it could make it more tricky to justify price increases to customers.

Just as a point of note, if your are worried about interest rate increases try not to be, after all it was the artificially low interest rates kept in place by the Federal Reserve (USA central bank) for too long after dot com crash in 2000, that ultimately lead to the credit crunch in 2008, which effected (and still does) all of us. So interest rate increases are not a completely  bad thing.  

failing all that if rates go up considerably (3 - 4%) we could always execute a highly leveraged carry trade Buying the pound and selling EUR & sit back and rack in a ton of interest rate swaps and join the Bollinger Brigade over at Canary Wharf  ;)

All jokes aside - as with any change in circumstances try to think how your business will be effected, how will your customers (market) be effected then think and plan contingencies.

I have some experience in business strategy & planning & more than happy to share some thoughts and ideas if you are worried about interest rate increases and other matters that effect our businesses, if it helps.

Re: How do you think rising interest rates will effect your business
« Reply #5 on: June 29, 2014, 12:46:19 pm »
Great post.

Window Lickers

  • Posts: 2196
Re: How do you think rising interest rates will effect your business
« Reply #6 on: June 29, 2014, 01:05:09 pm »
So - the conclusion is, you'll win some you'll lose some. Pretty as if nothing has happened then.
Liberace's ex looking to meet well built men for cottaging meets.

Spruce

  • Posts: 8460
Success is 1% inspiration, 98% perspiration and 2% attention to detail!

The older I get, the better I was ;)

AuRavelling79

  • Posts: 25358
Re: How do you think rising interest rates will effect your business
« Reply #8 on: June 29, 2014, 06:10:57 pm »
Rich1969 is wasted as a window cleaner!


My main customer base for domestic is older folk. Typically they will have low/no mortgages and savings to benefit from a rate rise.
It's a game of three halves!

PoleKing

  • Posts: 8974
Re: How do you think rising interest rates will effect your business
« Reply #9 on: June 29, 2014, 08:16:51 pm »
Get the doleys on your round.
They will never see a drop in income. ;D
www.LanesWindowCleaning.com

It's just the internet. Try not to worry.

Rich1969

  • Posts: 16
Re: How do you think rising interest rates will effect your business
« Reply #10 on: June 29, 2014, 10:01:48 pm »
So - the conclusion is, you'll win some you'll lose some. Pretty as if nothing has happened then.

Almost hit the nail on the head, there window lickers. Rate rises will effect different people in different ways, the key is to make sure that you don't have too many eggs in one basket, while at the same time maximising the income from the most profitable customer groups. In essence a good mix of customers, say domestic/commercial/industrial and sub divisions of these, e.g. domestic: sub divided to affluent older retired, young cash rich time poor professional couples, late middle age empty nesters so on, should give you a robust customer base and provide a steady income regardless of what happens with interest rates.

E.G. With a healthy mix of customer types on your round, if say your younger 20 - 30s home owners with massive mortgages should cancel due to  extra squeeze on disposable becuase rate rises, the effect will be limited as your other groups (those with no debt and plenty of savings) should remain steady or grow as those same rates rises increase their income.

You will have an advantage over your competitors if you understand this scenario and are able to act on it (canvass new custys of the right group) if / when needed, to protect your business, while maintaining or even increasing your pricing. (in effect your are managing business risk), there are of course many other ways you can do this.

If you find yourself worrying about an uncertain future for your business this is most likely because you do not understand the risks to your business. Those who understand the threats and risks to their businesses will be a step ahead of the competition as they will already be planning for these scenarios, they will be in control of their businesses (not left with price cutting as a last resort) and most importantly they will be able to spend more time focused on growing a robust business capable of withstanding today's volatile economic conditions.

For those still concerned about rate rises, consider this, higher interest rates will see increased money flows into the uk as global investors seek to buy British pounds in order to take advantage of higher returns, this effects exchange rates, exporting will be less competitive (no problem for the window cleaner) importing will be cheaper due to stronger buying power of the £, so in theory our ettore and unger toys should cost less!! take note window cleaning warehouse, click cleaning etc!

In reality there are many variables to consider when trying to answer the original question, e.g. interest rates can't be taken in isolation as the rate has to factored against the inflation level, known as the Real Interest Rate

apart from the effect on customers, higher interest rates will lead to an increase on interest payments on government debt. this may lead to higher taxes in the future, and on that cheery note I'm going to sign off for now... its not all bad news though, trust me, I'm a window cleaner  ;)

hasti

  • Posts: 498
Re: How do you think rising interest rates will effect your business
« Reply #11 on: June 29, 2014, 10:25:12 pm »
So - the conclusion is, you'll win some you'll lose some. Pretty as if nothing has happened then.

Almost hit the nail on the head, there window lickers. Rate rises will effect different people in different ways, the key is to make sure that you don't have too many eggs in one basket, while at the same time maximising the income from the most profitable customer groups. In essence a good mix of customers, say domestic/commercial/industrial and sub divisions of these, e.g. domestic: sub divided to affluent older retired, young cash rich time poor professional couples, late middle age empty nesters so on, should give you a robust customer base and provide a steady income regardless of what happens with interest rates.

E.G. With a healthy mix of customer types on your round, if say your younger 20 - 30s home owners with massive mortgages should cancel due to  extra squeeze on disposable becuase rate rises, the effect will be limited as your other groups (those with no debt and plenty of savings) should remain steady or grow as those same rates rises increase their income.

You will have an advantage over your competitors if you understand this scenario and are able to act on it (canvass new custys of the right group) if / when needed, to protect your business, while maintaining or even increasing your pricing. (in effect your are managing business risk), there are of course many other ways you can do this.

If you find yourself worrying about an uncertain future for your business this is most likely because you do not understand the risks to your business. Those who understand the threats and risks to their businesses will be a step ahead of the competition as they will already be planning for these scenarios, they will be in control of their businesses (not left with price cutting as a last resort) and most importantly they will be able to spend more time focused on growing a robust business capable of withstanding today's volatile economic conditions.

For those still concerned about rate rises, consider this, higher interest rates will see increased money flows into the uk as global investors seek to buy British pounds in order to take advantage of higher returns, this effects exchange rates, exporting will be less competitive (no problem for the window cleaner) importing will be cheaper due to stronger buying power of the £, so in theory our ettore and unger toys should cost less!! take note window cleaning warehouse, click cleaning etc!

In reality there are many variables to consider when trying to answer the original question, e.g. interest rates can't be taken in isolation as the rate has to factored against the inflation level, known as the Real Interest Rate

apart from the effect on customers, higher interest rates will lead to an increase on interest payments on government debt. this may lead to higher taxes in the future, and on that cheery note I'm going to sign off for now... its not all bad news though, trust me, I'm a window cleaner  ;)

Thats Mark Kani ( the new bank of England govern ) Disguised as Rich 1969 ,  ;D I am sure of it.

Well done the man  :)

duncan h

  • Posts: 1875
Re: How do you think rising interest rates will effect your business
« Reply #12 on: June 29, 2014, 10:31:08 pm »
It simple if you ask me. If companies lay off employers, it has a knock on effect. Doesn't  matter when you got a mortgage. If you loose your job and have to re mortgage, it screws things up.

CleanClear

  • Posts: 14671
Re: How do you think rising interest rates will effect your business
« Reply #13 on: June 29, 2014, 10:47:58 pm »
Interest rates will be starting to go up in the next 12 month. This means peoples mortgages will be costing more. Do you think customers will be looking at where they can cut back to save money. For example getting rid of their window cleaner?

Funny how our client bases can differ so much. I don't think a change in interest rates will affect me, although a change in the welfare/benefits payments might. Looks like we keep our eye on different things ? !!!     ;D
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JSMC

  • Posts: 3511
Re: How do you think rising interest rates will effect your business
« Reply #14 on: July 03, 2014, 10:43:46 pm »
interesting topic this is.

CleanClear

  • Posts: 14671
Re: How do you think rising interest rates will effect your business
« Reply #15 on: July 04, 2014, 12:50:12 am »
interesting topic this is.
Oxymoron ?
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