The headlines are dramatic, and appear to swing from one end of the pendulum to the other: Stock market has best day of the year; Dow up 188, US jobless rate falls to 5-year low of 6.6 percent. Are we actually seeing the beginnings of the much promised recovery, or are we experiencing a minor bump in an economic plateau.
Many of the businesses I’m in touch with are seeing signs of hope — in the form of new business activity. But with scary times still in our very recent memory, how much can we count on this growth? Is it time to stomp on the gas, or fill the coffers and hunker down?
1. Check in with your peers and customers
The returning strength of the economy is real, but it isn’t being evenly distributed. Don’t just trust the data you see in your business — reach out and get some feedback from other businesses like yours (and from your customers). There are pockets of real growth out there. The question is, is that growth happening in your industry, in your sector? And if it is, how can you position your business to take advantage of one of those?
2. Are employees getting scarce?
One of the signs of strength in any economy is the labor supply. As you are checking in with peers, ask folks what it has been like for them as they try to fill open positions. If you wanted to add to your team, do you have a short list of folks you might call to bring on board, or hire as a temp on a special project? Check in with them. You might find that a lot of them are getting snapped up. If so, that’s another indicator of overall strength in your marketplace.If employment is getting tight, you also need to look at salaries. If salaries are rising for the people you need to hire you may need to address that with your team first. Keep in mind: when things heat up, it’s your best people who will find a way to leave (and get big raises doing it).
3. How much gas do you have in the tank?
If you really suffered in the downturn maybe you need to pause and refill your tank before you can invest in growth. If you have debt, you’ll need to pay that down. If you have saved money by not investing in technology, or if your team’s compensation is falling behind the market, you may need to address those issues first, before you can step on the gas.On the flip side, if you are seeing growth in your marketplace this might be a time to forgo some of the personal earnings you’ve enjoyed and invest more in the growtth of the business.
Most of the gains in small businesses are made in the early part of a recovering economy. Those businesses with the ability to expand at the beginning of a growth period often make gains that strengthen their market position and are sustained throughout the growth portion of the economic cycle. Those businesses that can seize marketshare early in an economic recovery get a larger share throughout the whole cycle and, generally speaking, end up with greater capacity to withstand any downturn.
I’m not saying that it’s time to “bet the farm”, but capital is still cheap and if you are seeing growth in your market, you will fall behind if you are sitting on your hands.
Need help determining where the growth is so that you can get growing again? Give us a call!
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