Firstly, I wonder if you are speaking from the experience of having owned and run your own business in this field, or have you only been an employee, because this does make a big difference to this discussion.
My comments speak for themselves in answer to your query in this regard and I wouldn't be making them unless this was based on actual experience especially having survived one serious recession back in the early 90's.
The practicality is that you can not keep running machines for lower rates when all your expenses are increasing. And believe me, the phsycological problems are much worse when you have monthly lease payments coupled with fuel bills, wages, maintenance bills and no money to pay them, because you have been working at a lower rate just for the sake of working or been seen to be working. If you just have lease payments they can often be re-negotiated until things improve.
I agree...... and you would have seen this in my initial post on this thread.
However, If you sit at home waiting for the call to work which maybe months away you are not generating any income and the lease expenses continue. Granted you don't have the fuel and running expenses but, you are also going stale, fretting and worse of all there is no exposure to others that you are surviving and still operating as a going concern.
In business you have to keep an open mind because there will always be recessions. It might mean scaling back and selling off some plant, which we have done at different times and I even hold the view that sometime in the future our business may become unsustainable for various reasons, but lowering the rate is not the answer. This is not only my view, but the views of various bank managers and accountants I have worked with over the years. It just means we have to get smarter or perhaps diversify in other areas.Rn'R.[/QUOTE
I don't listen to bean counters or bank managers instead I try to rely on my own intelligence and experience. I think the worst mistake anyone can make is to act purely on the advice of the type of people you have referred to and I say that with good cause and justification,and to some extent I believe that you have yourself conceeded as much ,in regard to some bank managers you have encountered.
I agree with you that things are going to get tough, but we have been through tougher times and I look forward to talking to you in six months time, but I can guarantee we will not be lowering our rates.
Rn'R.[/QUOTE]
In respect of diversifying I say this : In a recession all industries take a dive. Some attempt to diversify into areas that they have no expertise or experience only to find that those areas too are already suffering or that there are so many trying to now break in that it becomes unsustainable or uneconomical. In relation to your contention that you have been through tougher times I say this:
A.We have a property bubble just like the US if not worse.
B.Most households are indebted up to their eyeballs.
C.Interest rates are high but not 21%,as they were under the world's "greatest treasurer".
D.Most of the manufacturing has moved off shore to one specific country to which we sell alot of our resources to.
E. The price of oil is at all time records and going anywhere but south.
Quite frankly Rocks I am a little bit concerned.
About your rates. Ok everybody has got to do what they got to do. I personally would prefer to keep my hand in as far as possible . If that means lowering my rates just to stay busy I prefer that than just sitting around .
Anyway, I hope you do not take this personally. I am merely expressing a point of view. I recognize that this type of debate is valuable to me as I hope it is to you and other members here. No-one has a monopoly on the truth.
By the way if you are interested I know where there are some cheap twenty tonners here...... probably. One of the major contractors has just gone under,however I wont be buying given what I smell in the wind.
Regards
