It's time for us entrepreneurs to stop our "recessionary" thinking and get to work so we're ready to benefit from the coming boom.
Too many businesses, large and small, claim the recession snuck up on them. I remember in January 2008 having a debate with my then bosses who insisted the economy was fine, while I argued otherwise.
So I want to go on record now and predict that, sooner than most of us think -- like they sang in the musical Bye Bye Birdie -- that "gray skies are gonna clear up." I'm not alone in my optimistic outlook either. According to a recent CNN Money article on the economic recovery, amidst the economic doom and gloom of soaring unemployment, plunging home values, and thousands of businesses teetering on the brink of bankruptcy, "a growing number of economists see a recovery on the horizon -- perhaps even a strong rebound." (Last month's Blue Chip Economic Indicators newsletter had a similar, though more tempered outlook.)
Although many economists still believe the economy will start rebounding at the end of this year or sometime in 2010, both the managing director of the Economic Cycle Research Institute (ECRI) and the chief economist for Moody's Economy.com think recovery might come sooner rather than later, especially if the labor market starts picking up.
One of the reasons cited for the optimistic outlook was the stronger than predicted uptick in retail sales in February and March. The key: confidence, both among consumers and business owners. In fact, a New York Times/CBS News poll released this week reported that the number of Americans who believe the country is "headed in the right direction" is the highest in more than four years. And, as the chief economist at AllianceBernstein told CNN, these positive signs appeared before the recently passed stimulus plan has had a chance to have any impact.
For us entrepreneurs, this is very good news. Even if these reports are slightly Pollyannaish, we need to start planning for better times now. If consumers are ready to start spending, you want to make sure some of that money goes to you. I'm not advocating we all throw caution to the wind, but it's time to stop recessionary thinking.
In the past year, many small retailers have trimmed inventories and staff. While that's not necessarily a bad thing, you also don't want to be caught short with outdated products or empty shelves in your stores (online or store front). I've been in too many stores lately where I was disappointed with the lack of stock on the shelves and vowed to find other places to shop. Or I've been greeted with long lines in stores with not enough personnel to handle the currently lightened customer load. Business owner friends of mine have been complaining about banks getting rid of personal bankers they've worked with for years, and suppliers not being able to fulfill orders in a timely manner.
You don't want customer loyalty to be yet another casualty of the recession. What small steps can you start taking now so you're prepared if and when more people start beating a path to your door? I realize most of you can't afford to hire now. But think about bringing on some interns you can train now and possibly hire later. Or you can tap into the millions of unemployed, some of whom are looking to be retrained in new industries. Check with your local and state governments to see if they are offering hiring incentives and/or tax breaks (many are).
If you haven't done so already, this is a great time to renegotiate. Whether it's with your landlord, your banker, or suppliers and vendors, everything's negotiable these days. The better the terms you get now, the sooner you'll be able to rebound.
Don't ask yourself what you need now; rather, try to determine what you'll need later when business picks up. Is your technology outdated? Is your company car about to fall apart? Again, research what incentives are being offered and determine if spending some money now will save you more down the road.
As you continue to do business in tough times, consider how you're treating your current staff. Too many Americans -- and I mean the employed ones -- are demoralized and already have one foot out the door. The minute the economy picks up and other businesses start hiring, they'll be gone and you'll have to spend even more money finding and training new workers. It's not rocket science. If you've asked your employees to take a pay cut or forgo their annual raises, don't show up to work in a new, expensive car or with a tan from your Caribbean vacation.
I've mentioned before that I'm a bit of a Pollyanna, but though the economy is still a mess, there do seem to be signs of real recovery. Consider this an early warning signal and use the time to get ready for the boom that's sure to come.
Be a featured guest on our weekly podcast show! We want to hear from you on the AllBusiness.com "Ask the AllBusiness Expert" podcast. If you'd like Rieva Lesonsky to answer your questions about entrepreneurship or running a small business, please send an e-mail. Or you can just e-mail Rieva directly at [email protected]. We're looking forward to hearing from you.
Follow Rieva on Twitter @Rieva