Tuesday, August 19, 2008

Positive Action in a Down Economy

Survey: Small business optimism at recession level
East Bay Business Times Tuesday, August 12, 2008
National Federation of Independent Business’ monthly Index of Small Business Optimism dropped 1 point to a recession level of 88.2 in July. Half of the decline was due to weaker capital spending plans -- the lowest reading since 1975, the National Federation of Independent Business (NFIB) noted. Lower earnings, fewer job openings and lower inventory satisfaction also posted substantial declines.

These are the opinions of small business owners not the government economists, who by the way are still trying to find the right definition of recession and apply it. Those are the facts or at least some of them. Small business owners say we are in a recession and we are.

It is important to realize that this recession is different than previous ones. It is personal. What do I mean by that? Previous recession times were characterized by the dot com bust. That was for the “crazy” people who invested only in dreams not reality. Or it was characterized by the Enron, Arthur Anderson, S&L, WorldCom troubles where the issue was crooked people at large corporations. But this one is personal. It is my house that is worth less. It is my gas that costs so much. It is all of my bills that are so much higher. It is these issues that constrain my personal and business spending.

“So what?” is a favorite question of a friend of mine who speaks to hundreds of people every day and helps them to see the need for action. The rest of the question really is “What are you going to do about it?” This is a personal problem and you will need to have a plan to survive.

Many companies and most small businesses are cutting back. They are “hunkering down” and not investing. How smart is that? For some that may be the only way, but only for some.

“Sometimes the best way to deliver a punch is to step back. But step back too far and you ain’t fighting at all.” Eddie Dupris (Morgan Freeman) in Million Dollar Baby

There are many companies that are investing in their future. They see this as an outstanding time to develop the plans, set in place the processes, get the right people and do it at bargain prices that will drive growth and business revenue for years to come. NFIB said outlined gains in expected real sales, business conditions and the percent of owners saying this is a good time to expand.

So what are you doing in your company? Are you adopting the “deficit thinking, cut back” approach? Or are you adopting the “lets build a competitive advantage as we come out of the recession” approach? Warren Buffet and other very smart investors are in that second camp. They are stockpiling the resources they need a now at bargain prices?

This is personal. You can’t just sit and wait for either the government of “somebody else” to walk in with a plan. The Government stimulus checks have come and gone. So what is your positive action in a down economy?

If you need some help defining what to do call us.


John Maver
Maver Management Group
(925) 648-7561
Maver Management

View John Maver's profile on LinkedIn

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