Tag Archive for 'recession'

Surviving the not-so-great recovery

Published
by
Jim Blasingame
on May 31, 2011
in Economy: National and Global and Management Fundamentals
. 0 Comments

After the technical end of the Great Recession in the summer of 2009, I predicted the letter that would most accurately describe this recovery is not a “U,” an “L” or even a “W,” but rather, an “M” – for marathon. After working in six previous recessions, to me everything pointed to a very long and grinding economic period.

Alas, my prediction has come to pass. Seven quarters into the not-so-great recovery, GDP for Q1 2011 came in at only 1.8%, which caused economists, who had earlier projected 2011 growth of at least 3% for the year, to lower their expectations.

We wanted to know what our small business audience thought about the economy, so for the third time in a year we used our online survey to ask, “What does the economy look like for your small business for 2011?” Here are the three options, with each response followed by how similar questions were answered previously.

Those who said, “We’re experiencing solid growth and expect the same through 2011,” represented 14% of respondents. In the previous survey, 29% were this optimistic.

The next choice, “Our growth is similar to the national trend – up, but barely,” was chosen by 40% of our sample, which is very close to the 43% choosing a similar option in the previous survey. Unfortunately, 46% of our respondents said, “It still feels like a recession,” which is up from 28% making this choice in the previous poll.

Our survey, while unscientific, is supported by others that are: The NFIB small business survey indicated optimism declined again in April, and the Tatum, LLC survey has been reporting more red arrows than green ones all year. Clearly, overall small business economic sentiment has eroded.

But sentiment shmentiment! As the CEO of your small business, it’s your job to balance the force of entrepreneurial optimism with the gravity of economic reality. That means:

• Giving every customer the maximum opportunity to do business with you while serving that customer with maximum efficiency.

• Combining your service “special sauce” with every technological innovation you can find.

• Keeping your team motivated and inspired while running the most deliberate, disciplined and methodical business marathon of your life.

• Believing that it’s okay to fall in love with what you do, but not with how you do it.

Remember the ten most powerful two-letter words:  If it is to be, it is up to me.

Recently on my radio program, The Small Business Advocate Show, I talked more about how small businesses feel about this marathon recovery. Take a few minutes to listen and leave your comments on the recovery.

How are small businesses handling this M recovery? with Jim Blasingame

What is your big concern for 2011?

Published
by
Jim Blasingame
on February 9, 2011
in Economy: National and Global and Future thinking
. 0 Comments

Since the last third of 2008, as our world began spinning into what we now call the Great Recession, when talking with small business owners I’ve asked them what is their single greatest concern. Almost every time the answer has been, “More sales.”

Here we are, almost two years into the not-so-great recovery, and we wanted to know what small business owners’ big concern is today. So we asked my radio and online audience this question: Which one of these four areas will be the single most important thing you will work to improve in your business for 2011: grow sales, improve profits, get a bank loan, or find qualified people.  Here’s what we were told:

Once again, sales came in on top at more than 40%. No surprise here because, as one of my mentors once told me, “In business, sales cures all ills.” Clearly, with unemployment at almost double-digit levels, a big chunk of small businesses are experiencing weak demand that is slowing delivery of the marketplace medicine of sales.

In second place, one-in-four of our respondents selected profit improvement. This group probably represents small businesses that have achieved sales recovery at a level they can service with the resources they have, and now want to find a way to keep more black numbers on the bottom line.

Perhaps the big story in our survey is the response that came in third – 17% said their big concern was finding qualified employees. The good news is they anticipate hiring. The bad news is concern about the applicant pool not producing qualified prospects for increasingly precious positions.

As ugly as the current 9.6% unemployment statistic sounds, the human fact is uglier: We may have 17 million people either unemployed or underemployed. Structural unemployment – unqualified for 2nd decade of the 21st century jobs – is our most challenging economic headwinds, and the longer this problem persists, the longer it will take for a small business’ first concern – sales – to be solved.

At fourth place was credit availability, with about 14% selecting this option. This response helps dispel two media myths that have been around since 2008: 1) As our survey – and every other one I’ve reported on for the past two years – will attest, most small businesses are not interested in a bank loan; and 2) If a small business wants – and qualifies for – a bank loan, they can get it. Independent community banks have never stopped making small business loans.

Have you decided what your big assignment is for 2011?

This morning on The Small Business Advocate Show, I talked more about this survey and the results. Click on the link below and take a few minutes to listen, then leave your comments on what’s most important to you in 2011.

What are your biggest small business concerns for 2011?

Small business owners answer questions about growth

Published
by
Jim Blasingame
on September 1, 2010
in Economy: National and Global, Government, Regulations, Uncategorized and Universal health care
. 0 Comments

One of the big issues these days is why the economy isn’t growing. Many people believe one reason is because businesses, especially small ones, are so uncertain about the future that they aren’t taking the risks associated with growth activity, like hiring more people, borrowing money or other expansion steps.

We wanted to know what small business owners think about this, so we asked our NEWSLETTER subscribers and website visitors to tell us about their perspectives on growth opportunity. Here is the question we asked: Please, tell us where you fall in this issue. “I am not taking growth steps because…”

Here’s how our respondents answered:

23% said:  I’m worried about the economy in general.

15% said:  I can’t get financing to fund growth opportunities.

58% said:  Government actions make me uncertain about the future.

4% said:  We are not experiencing growth opportunities

Perhaps the good news is that only four percent of our respondents indicated they were not experiencing growth opportunities.  The bad news is, as you can see above, 96% of responders were so troubled by three issues that they either can’t or aren’t growing their businesses.

These responses track pretty closely with others I have seen lately.  There is no way to sugar-coat this: When small business owners are troubled, the economy is troubled.  I don’t know what’s going to happen next, but I do know that my prediction earlier this year in an article titled, “The shape of this recovery is M” is coming to pass. This recovery is more of a marathon not a sprint.

But we’ve come too far to quit now.  This is no hill for a climber, and you’re a climber.  I’m proud of you. You should be proud of yourself.

To participate in next week’s poll question, visit www.smallbusinessadvocate.com and vote.

How leading small business CEOs prepare for the recovery

Published
by
Jim Blasingame
on July 18, 2010
in Economy: National and Global and Management Fundamentals
. 0 Comments

Reading newspapers, magazines and online, watching the talking heads on TV or listening to the geniuses on the radio, when the topic is about economic recovery most of the coverage focuses on the national or global situation.  And if you’re a stock trader or run a national or global company, this information is likely to be valuable.

But if you’re a small business CEO, the talking head noise must not distract you from the dealing with the reality that your economic recovery is influenced most by what’s going on in two much smaller pieces of geography:

1.  Within a few miles of your business: Your ability to serve real customers whose names you know, not the ones represented in statistical references.

2.  Within the space between your ears: Get out of your own way and execute as if there was no bad news.

Recently, on my small business radio program, The Small Business Advocate Show, I talked with Vistage leader, Stephen Baum, about how leading small business CEOs he knows are preparing for the recovery. Stephen has been a member of my Brain Trust for a number of years and is an adviser and coach to CEOs for more than twenty years. He is also the author of, What Made Jack Welch Jack Welch.”

Be sure to take a few minutes to listen to my visit with this world-class management expert and be sure to leave your own thoughts. Listen Live! Download, Too!

We’re in an “M” shaped economic recovery

Published
by
Jim Blasingame
on April 6, 2010
in Economy: National and Global and Inspirational and Motivational
. 1 Comment

When discussing the current condition of the U.S. economy, we hear experts talking about recovery shapes. For example, there is the “V” shaped recovery, which is where the economy bounces back quickly after a recession. The 1990-91 recession is a good example of a V-shaped recovery, as was the one in 2000-01.

You may have heard economists prophesy that we will experience a “U” shaped recovery. This is where economic recovery consists of anemic growth for an extended period before expansion. If we have had a U-shaped recovery in the U.S. it was probably the one that followed the 1974-75 recession, a period associated with the Arab oil embargo, the Jimmy Carter malaise, and a scourge called “stagflation,” a toxic confluence of slow growth and high inflation.

Then there is the dreaded “W” recovery, also referred to as the “double-dip.” Unless you’re in the ice cream business, a double-dip is not good. This economic scenario isn’t really a recovery at all, because not long after the initial recession is technically over, economic growth proves unsustainable and takes another dive producing back-to-back recessions. We experienced one of these in 1981 and 1983. It wasn’t pretty.

Traveling around the country talking with small business owners, the abiding topic of conversation is the economy and prospects for recovery on the way to economic expansion. Here is the question small business owners have asked me most often this year:

 ”If the recession is over, why doesn’t it feel more like things are getting better?”

The answer is this economy still has many financial toxins and structural challenges yet to be absorbed and cleansed by the marketplace ecosystem. During this healing process - which will take place over years, not quarters - we have to operate our businesses like we’re running a marathon, instead of a sprint. So, the Blasingame classification of the period following the Great Recession is an “M” recovery. ”M” stands for “marathon.”

Physical conditioning is required to complete a marathon race, but knowing when and how to expend energy comes from mental preparation. As you unlock the front door of your small business each morning, pace yourself and your organization for this marathon which, like the footrace, you cannot finish successfully if you run out of gas. Pacing means prudent application of capital, physical assets and human resources, plus minding your own psychological and physical well-being.

Remember, “M” stands for marathon - the shape of this recovery.

Recently, on my radio program, The Small Business Advocate Show, I talked about this “pacing” attitude as we run this economic recovery race successfully.  I hope you’ll take a few minutes to listen, and be sure to leave your own thoughts. Listen Live! Download, Too!

For small business, Cash is no longer King – it’s the Emperor

Published
by
Jim Blasingame
on April 7, 2009
in Banking - Investors - Capital, Cashflow - Credit - Collections, Delegating, Government, Management Fundamentals, Online technologies and Technology
. 1 Comment

For generations, business owners have learned that while Profit may be the Queen of business, Cash is King. And there is never a moment in the life of any business, large or small, when this generally accepted truth doesn’t apply. But in 2009, or anytime the economy slows, small businesses must elevate Cash to an even more supreme level. Consequently, these days, and for the foreseeable future,

Cash is Emperor.

Any Questions?

Blasingame’s 3rd Law of Small Business states: “It’s redundant to say, ‘undercapitalized small business.’” There are at least two reasons this statement is a law and not a maxim:

1. In every small business, there is always a place to put whatever capital may be available.

2. Small businesses typically have only three sources of capital: a) Retained earnings – profits left in the business; b) Bank loans; c) Investment capital, most of which comes from the owner.

Because of the impact of Blasingame’s 3rd law, any cash in a small business is precious and, therefore, availability must be maximized.

There are many fundamental best practices that can be executed to maximize cash. Here are a few:
- Sell at a gross profit margin that will more than fund operations.
- Manage expenses like a she-bear guards her cubs.
- Manage accounts receivable like your life depends upon it – it might.
- Establish and maintain a close relationship with a bank.
- Re-invest as much of the profits back into the company as possible.

Recently on my small business radio program, The Small Business Advocate show, I interviewed three top experts on cash management and capital acquisition. First, Gene Siciliano, author of Finance for the Non-Financial Manager, second, Joe Knight, author of Financial Intelligence for Entrepreneurs, and finally, Tom Markel, founder of iBank.com. Be sure to take a few minutes to listen to what these three world-class cash management experts have to say about this critical small business management fundamental. And, of course, be sure to leave your own thoughts.
For Gene Siciliano: For Joe Knight:
For Tom Markel: