Please Note: This Article is 3 years old. This increases the likelihood that some or all of it's content is now outdated.

On the subject of Brexit – don’t say I didn’t warn you – https://www.landlordzone.co.uk/industry-expert-guest-writer/michael-lever/brexit-aftermath – we are now being told that businesses including but limited to property investors do not like uncertainty. That’s a myth, surely?

Regardless of how good a business thinks its products and services (similarly, an investor thinks the property), there is no certainty anyone would buy them, (tenant rent). Were it not for uncertainty and finding ways to overcome, there would be no success, no achievement.

In business, as with anything involving commitment of some sort, the only certainty is that people only buy when they have no choice. The more monopolistic the product and service the more certain people have to buy. Few businesses have a monopoly so to minimise the risk of not being on the receiving end of any demand they boost their own importance to give the impression of being indispensable.

With business plans, a gamut of time, thought, and money can go into the detail. Regardless of how much or how little effort goes into the planning stage doesn’t negate the principle that there is no certainty.

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I find fascinating the assumptions that are made when planning. Planning hinges on a combination of wise use of resources and self-confidence. Wisdom comes from insight and understanding, the product of positive and negative thinking. Self-confidence is not only trust in one’s own ability but also the behaviour of others. Investor assumption, for example, that it makes sense to invest in property when interest rates are almost zero yet yield from investment is higher, presupposes enough others are thinking along the same to maintain a market. So ingrained are the various assumptions in our ways of thinking that generally we are prone to asserting that anything that doesn’t agree or conform must surely be illogical.

Growth stems from supply and demand. The assumption that the growth target is upwards and outwards features strongly in planning. For progress, the aim is to be better off, tangibly. Overdoing the confidence placed on the assumption of that approach to growth can exceed the limits of its potential. By manipulating the market, by engaging in deception and dishonesty, the truth surely is that businesses do not like to think that  thinking that they’re onto a sure thing would be wrong.

When the target for growth is downwards and inwards, the aim is progress, to be better off, intangibly. For progress, there are no hard and fast rules. Whether one should think positively or negatively depends upon the particular situation. To be set in our ways conflicts with the need for attitudinal flexibility.

Growth is neither organic nor inorganic, but a combination of both. Organic growth, allowing things to develop and unfold naturally, can be a slow process and at odds with a fast-paced environment. Inorganic growth involves forcing the pace: risky because the system may not be able to cope with the strain.  To relieve the pressure from having had enough of logical thinking, the organic approach is to leave, to quit the experience. Stopping is a non-starter; instead rethink direction.  The inorganic approach, to remain, to carry on regardless, is a product of an addiction to tangible growth.

Businesses need or like to plan in advance; fair enough. But there is no presumption that just because of a plan the outcome would be as expected. Anything can happen between the goal or objective in theory, and implementation in practice. To minimise risk, one can protect the bottom-line of what is nothing more than a leap of faith, but no matter how many safeguards are in place, there is no certainty that even the bottom-line is secure.

In my opinion, the reason some businesses and investors dislike uncertainty is that for such people the only alternative when growth is thought of only as tangible is to cheat and to do that flies in the face of respectability. Cheating is gaining advantage through some deception or dishonest practice. Whatever one’s preferred definition of dishonesty, blatant lie or excusable fibbing, businesses generally, under the cloak of respectability, are not averse to bending the rules when it suits them. As for whether something is unethical or immoral, both of those concepts are subjective, which is why applying the law  to wriggle out is not in itself dishonest.

The clue to the link between uncertainty and growth is in the definition of ‘growth’. Growth, in business and economic terms, is mainly inorganic, tangible, measurable. To measure is to check to compare: doubt and comparison erode self-confidence. Without dishonesty and deception inorganic growth is not sustainable. Dishonesty can be the road to ruin.

To avoid uncertainty, the solution is organic growth. With the intangible comes knowing.

Please Note: This Article is 3 years old. This increases the likelihood that some or all of it's content is now outdated.

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