Business owners fear not as the economy continues to fluctuate around this correction of the housing markets, soaring fuel prices and a Presidential election year.
Most business owners I speak to are indeed a little nervous about the U.S. economy based on what they hear as opposed to what they know about the current economic climate.Is your business going to suffer through these unsure economic times?Â Of course, it will just as other businesses will have to muddle through a reduction in consumer spending, where you are the consumer to those businesses.
Look at Starbuckâ€™s, where they have started to close underperforming stores.Â Consumers would much rather buy a gallon of gas than pay the same price for a Grande Latte.Â The trick to managing these tough times is that we have to manage our costs, our operating costs and our cost of doing business.What is the cost of doing business?Â The cost of doing business is the fuel you spend to do what it is your business does.Â
For example, I have a few client contractors that have to keep tabs of recuperating fuel costs in their bids.Â Of course winning a construction bid depends on many odd factors, where we need to control our cost of fuel when bidding jobs ensuring we recover that expense in the course of working the project.According to analysts, many believe the economy has slipped into a recession. However, overall economic growth, as measured by the gross domestic product, has not yet turned negative (Martin Crutsinger, AP Economics Writer).Federal Reserve Chairman Ben Bernanke said in a speech Tuesday that the turbulent financial market had eased somewhat but that the situation remained “far from normal.” He said the Fed’s actions, which included an unprecedented move to allow investment banks to borrow directly from the Fed, “seems to have bolstered confidence.” (Martin Crutsinger, AP Economics Writer).
I can tell you from my experience that we are not in a recession and what most of us fear is created by most media outlets.Â I really do not want to name any particular media outlets here but trust me that we are not in a recession.Â What we are in is a correction of crazy economic things we should have never done.Â The subprime housing market is one of them.Â Based on this correction, the media has joined the cause, along with soaring fuel prices and the war in Iraq to make us all nervous.Â What is really happening is that most business owners are now in a panic, which is affecting the entire cycle of business that ultimately affects the macroeconomic environment.In other words, do not panic.Â Do your best to control business expenses such as fuel, employee benefits, profit and lastly, keep your customers coming back.Fret not as the Bush administration is hoping that a $168 billion economic stimulus package, which includes about $100 billion in direct payments to households, will give the economy a jump-start. The government started making those payments at the end of April (Martin Crutsinger, AP Economics Writer).
Is this stimulus package going to help?Â Nope, but let us humor the guy and make him believe it will.Social tagging: General Business