As business owners, way too much energy is spent fighting economic cycles. Cycles cannot be controlled any more than the seasons. Time and energy is better spent, understanding and learning to work with economic cycles.
Think about it this way, there is a time for everything. Spring is a time for planting tomatoes. If you ignore the seasons and plant tomatoes in fall, you will not be successful. Set yourself up for success by going with the flow, and aligning with the cycles.
Last week, I attended an economic update sponsored by Barnes and Dennig (thank you) and had the privilege of hearing Alan Beaulieu of the Institute for Trend Research (ITR) speak about economic cycles in general and our current cycle. Below is a blend of his recommendations and my commentary. I hope they help you plan for success in 2013 and beyond.
The present cycle is one of continued economic expansion. Mr. Beaulieu tells us to take advantage of this expansion and prepare for a mild recession in late 2013 or 2014. Plan for growth in 2015–2017.
In the short term, look at these action steps:
- Add sales people and hire top people – now is the time to gain market share to take you through the coming recession
- Strengthen your team by investing in training and improving your process
- Lock in supplier costs in anticipation of global commodity price pressure, especially as we approach 2015 and beyond
- Borrow what you need now for as long a term as possible to lock in today’s long term rates
- Establish credit as needed, banks are lending
- Build your efficiencies with investments in technology and software so that you can lower your long term costs
- Spend money on new products and marketing
- Use market research or customer advisory boards to uncover competitive advantages
- Build your cash and working capital reserves
- Prepare for higher taxes, fees and licenses
- Use Key Performance Indicator tracking to stay on course and make any needed course corrections timely
- Involve your team in setting annual and quarterly goals
Learn to go with the flow and you will reduce your stress, improve your profitability, and achieve the Girl Scout motto – Be Prepared!
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