Why?  Because of all the things I have been able to learn over the years is that the U.S. economy or any economy, is cyclical.  Anything for that matter is cyclical; rather what comes up must come down.

In the case of this recession or economic slowdown, I have been listening and helping business owners grasp a better way of managing their businesses where their success is important to our economic recovery.

In the last four days, I have received unsolicited emails from my clients where they are touting better than expected sales as well as better than expected profits from their business.  One has even highlighted the fact that his sales are down from this time last year, but his profitability is up.

How is that possible?  It actually is possible, that’s what we do.

So now we have this pretty impressive speech from the President last night as well as comments from Federal Reserve Chairman Ben Bernanke, stating that this recession will end by the end of 2009 and full economic recovery will take another two to three years.

President Barack Obama made significant promises in last night’s address to Congress where we should now feel more confident about this recession ending by the end of the year.

I feel just a confident about the tide changing.  The big question is, are you and your business ready to take the place of those businesses who didn’t heed the warning to get organized, manage costs and develop better processes?

As I have written many blogs and articles regarding this economy and our responsibility in garnering help for our businesses, I feel it time that those businesses that have prepared and can move into the next level prepare to do so by the end of this year.

There are many vacant businesses out there that did not plan and therefore have unfortunately become a victim of this economy, but for those businesses who have prepared, now is the time to plan to make a move.

Can a business actually have negative annual sales but still generate profit as some of my clients have?  Yes, a business can do that.  That is where our skill at Operational Accounting Consulting comes into play.

Good luck everyone,

It is just that the media is fixated on reporting doom and gloom.  Short of going off into another great blog topic on the Iraq war, the current issue of a recession as portrayed by all media seems to be what generates viewership and of course ratings.

If I won the lottery, I would buy a television channel to report relevant, real and un-spun business news. 

Bob Willis of Bloomberg reported today, “The index of leading U.S. economic indicators rose in April for a second month, the first back-to- back gain since October 2006, signaling that the current slowdown will be short-lived” (Bob Willis, Bloomberg Press).

Yes, things are a little slow, but not for long.“The message on the economy is that activity is soft but not moving down sharply,” said Michael Moran, chief economist at Daiwa Securities America Inc. in New York, who accurately forecast the index’s gain.

“The economy is muddling along.”, (Bob Willis, Bloomberg Press).This tells me, as is plain to read that we are in fact not so doom and gloom as the media would portray the U.S. economy.

Sure, as small business owners I agree that we should pay attention to news as it relates to the economy, but let us make sure what we are reading and what we are listening to is the right information. 

I try not to spend my time surfing the Internet for news but sometimes I come across an article that helps me bolster my point that as small business owners we should be paying more attention to strategic goals we create for our businesses rather than economic rhetoric from people who have never owned a small business.

Yes, times are tough, but they are not that tough that we give up now. 

What we need to do as small business owners is create a plan, a strategic plan to manage our business through the next ten or fifteen months.  Stay close to the legitimate news sources, whoever they are, and plan to execute your business strategies accordingly. 

There will be tough times ahead, but not that tough.

Gas Prices

Ah yes, but then there is the gasoline issue.  Unfortunately, I cannot contest that one.  It is what it is.  It is also a great lesson in supply and demand.  We demand it, and they supply it…at a premium price. 

This is a great lesson for those businesses with a product or service that is so unique and in so much demand that you can strategize around its own supply demand.

Be aware though, that if you are a business that relies on fuel, such as a contractor or a distributor, the cost of doing business will rise and if you are not prepared to recover those costs, you could be in for tough times. 

Being prepared to absorb costs does not mean cutting back on copy paper or reducing the number of Nextel phones.  Being prepared means having to operate your business as usual; minus a few tweaks here and there, while recovering your operating costs.

Write a business plan; develop a strategic plan built around your costs versus sales price.It sounds tricky but it is worth you taking the time to plan your business for the next ten to fifteen months out.Similar Posts:

• Top 5 Things to Help Your Business During These Tough Times
• Is it really bad in 2009?
• What do we do now?
• 5 “must do” for your business in 2009
• U.S. Economy: Retail Sales Rebound From Year’s Biggest Drop

Do you think you need a business plan for your small business?

Yes.  You need a business plan for your small business.  You just do.

As the U.S. economy continues to put pressure on everything we do, your business might not have the strength to manage these tough times. 

Hopefully you have a plan to ride out these tough times and a plan to be a successful business owner.

I’m not trying to sell you our services on business plan writing rather trying to drive the point home that business plans are very important to our small businesses.  They just are.

Sure you can hire a business plan writer who will charge you anywhere from $3,000 to $15,000 for something so basic and important, or you can get a business plan template from Google for about $100 bucks.

Is it the same thing?  It sure is.

So why is a business plan so important?

It’s important because it takes all the things you know about your business and all the things that are happening in the macro economy and puts it all together in one place for you to use as a guide.

Sure you know everything about your business, but you don’t know allot about what is going to affect your business.  That is why business plans are so important.

They allow us to see how our business reacts with the outside forces that will make or break your business.  No matter what your business is, it will be pressured by external forces.

It is a fact that all business, small, medium and large are affected by the macro economy.

For example, if I am a restaurant owner, my business will be affected by consumers not going out to eat because buying a gallon of gas is probably more important these days.

Sound odd?  Look at Starbucks.

Two weeks ago, Starbucks announced less than expected earnings due to declining sales.  In the same announcement, Starbucks mentioned they will be closing underperforming stores. 

And on a related topic, Starbucks also announced that it will begin selling a small cup of coffee for less than $1.00.  Yup, less than a buck for a cup of Starbucks coffee.

Why do you suppose Starbucks is taking such a stance?

Because it is being pressured by less consumer spending via less disposable income by consumers.

In other words, we would rather buy a gallon of gas than a Frappacino.

Disposable income is the money consumers have left over after paying for the essentials of life such as mortgage, taxes, and a gallon of gas.

Starbucks is also being pressured by McDonald’s who recently announced they will take a shot at having gourmet coffee bars in some of their stores.

So, do you think Starbucks has a business plan? 

Now they do and so should you.  You just should.Similar Posts:

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