As I travel across the U.S. helping businesses better themselves, catching a flight from one place to another, renting this car, that car, staying in this hotel, that hotel, it never fails that people ask me what I think of the current U.S. economic condition and what’s to come.
I have written a few blogs and random articles on this very question as I continue to research data and historical indices to garner some semblance of rationale as to what will be.
When I began studying the impact of the failed U.S. banking system I created a sense of nervousness in my mind that maybe my business would take the first punch and I would have to get a real job.
Historically, consulting services takes the first hit in a down economy where through this downturn; it seems as if our business is doing just fine. I’d like to think it’s because we do a great job but in reality I believe our busy calendar this year is due to strategically planning our business and recognizing that other businesses need to buckle down and get organized.
In other words, we have to respect the fact the downturn in the economy might in fact be a good thing.
I say this because it seems as if business understands that operating from lines of credit is not going to help anyone other than the banking industry itself.
I have turned many businesses around from this thinking where all of my client currently enjoy zero loans and excess working capital.
My point with all this is to answer that question, “what’s going to happen”?
I tell people that what is going to happen is that business and the economy are going through a sort of cleansing where we all have to get used to living as we did in the ‘70s…no credit.
For those of us who are old enough to remember the ‘70s, we remember that the average American didn’t have 10 credit cards, equity in our houses and a variable rate second home mortgage.
We created this credit monster in the last 15 years, where it was just a matter of time before the bubble burst. What we are going through right now is relatively normal.
What will happen very soon, for those businesses who survive is a great opportunity to replace those businesses who didn’t survive. In other words, we are going through the down cycle of the up cycle we all enjoyed over the last 15 years. Now it’s time to pay it all back.
So get ready to take the place of those who cannot make it. It’s the classic, survival of the fittest. After all, that’s what business is.
Sure, if you listen to the media, we’re all going to hell. As much as we should be aware of this downturn and react to manage our businesses and our lives with more due-diligence, I firmly believe that we are not going to hell and those of us who are sharp enough to manage accordingly will do just fine.
So, what do I tell my clients, or people I meet on a plane, or people I meet in a hotel lobby? Get ready to manage your way through this because if you do, you will do just fine.
I am personally not worried.