A new survey of small business owners from FedEx shows that they remain positive about the prospects of future growth, despite the current economic climate. While owners acknowledge a current drop in profits due to reduced consumer and business spending, they expect things to turn around, and 47% plan to actually increase their marketing efforts in 2009.
This is good news for the 47% that invest in their future, which is the topic of my most recent article.
Have you ever driven your car on an icy road?
What happens when you jam-on the brakes?
That’s right, you slide off the road and maybe end-up in a ditch or worse.
That is exactly what is happening to many people today. They are spending entirely too much time watching, reading, listening and talking about how BAD things are in this economy. They are focusing on blaming Bush or Obama or the Fortune 100 CEOS or whoever. As a result, they can’t help but react with fear by jamming-on the brakes.
To read more about why maintaining your marketing efforts is important even in a down economy, please read my latest article.
As the media touts the failing economy more and more vociferously, business owners seem to be pulling in their horns more and more. This means lay-offs, staff cuts and belt-tightening. That translates into owners and managers getting more involved in the day-to-day operations. Often times the result of this is that leaders take their eye off the big picture in favor of micro-managing the details. My conclusion is that the results of this action can be much more devastating than any so-called economic slow-down. We spend end up spending so much time working IN our business that we fail to work ON the business and cause our own personal economic crisis. Peter Drucker said that on the average one hour spent planning is worth 5 hours of execution. Are you spending enough time planning? Do you need to take a step back and look at the big picture and identify some contingencies? Read my recent article on No Time to Plan.
Have you seen the news? It must be KILLING the media-moguls to be reporting something positive. I’ll bet they’re getting physically ill just hearing about it themselves. Instead of seeing our first quarter of negative growth which would be sign of an impending recession, what do we see? POSITIVE GROWTH!! That’s right, the Commerce Department today (Wednesday April 30, 2008) reported that gross domestic product or GDP expanded at a 0.6 percent annual rate in the first quarter, matching the fourth quarter’s advance and handily topping a forecast for 0.2 percent growth in an advance poll of economists by Reuters. Not only that but personal consumption expenditures rose at a 2.2 percent rate after increasing 2.5 percent in the fourth quarter. This indicates that people are still buying stuff and are confident about the economy. Awe too bad predictors of doom, the economy isn’t collapsing. My plea to entrepreneurs, who literally DRIVE this economy – STOP watching the news, STOP reading the paper, STOP exposing yourself to all the negative propaganda. START educating yourself, START believing in a promising outcome, and CONTINUE taking constructive action. This will have a positive impact on your personal economy and the entire economic structure.
This is an interesting time. The recent layoff of 80,000 American workers has resulted in all of the financial gurus spouting their drivel about the global economic crisis we are facing. I have even heard some say we are entering another depression. Just a few days ago I appeared on FOX TV and discussed this with business expert Neil Cavuto. He asked me how I thought this was affecting small business owners and what they could do about it. My comments were that maybe we should put some of these gurus on the firing line of small businesses and see how they do. Their demise would be quick and final. Because as I told Mr. Cavuto, the most important asset that entrepreneurs have today is their attitude. Without a positive attitude we are doomed regardless of how well or how poorly the economy is doing. Many of us perhaps have heard the Serenity Prayer – “We must accept the things we cannot change, have the courage to change the things we can, and wisdom to know the difference.” Surely we cannot individually change the economy but collectively it is certainly possible. We can do this by focusing on the critical business issues at hand like, delivering a higher level of customer satisfaction, creative product development and line extensions, smart financial management, getting longer terms on payables, building customer loyalty programs and penetrating new markets. We do have the ability to turn this economy around but we must first look in the mirror and begin the change within. Do you have the courage to take that challenge? I sure hope so. All of our jobs might depend on it.
While writers are on strike and studios are shutting down production, who will most be affected? Small business. Like most industries, entertainment relies heavily on small businesses for many of the elements required to produce films and television shows.
According to the Los Angeles County Economic Development Corp. (LACEDC), on a “mid-budget” film ($17 million), 304 direct and indirect jobs are created and $1.2 million state sales and income taxes are generated. For a “large budget” film ($70 million), 928 direct and indirect jobs are created, while $10.6 million in state taxes are generated.
The bulk of these jobs are independent contractors and employees of small businesses. There are a myriad of companies that cater “on-set,” rent out lighting and camera equipment, provide locations for shoots, and perform virtually every function a production needs. Some will survive the strike but others will not.
Whether you are in entertainment or any other industry here’s how you can practice attraction in order to thrive in a difficult market:
Connect with Super-users – Think non-traditional sales and marketing. Most broad advertising doesn’t work and traditional selling pushes more people away than it attracts. Identify a highly targeted audience and use the Internet, content malleability, affiliate and alliance relationships to dominate it.
Destroy and Rebuild -Use this targeted audience to help define the re-engineering of your products and services. Introduce innovation in everything you do. This is a good time to experiment with new approaches. Focus on getting the best people and creating the best product.
Create Standards and Systems – Developing systems allows you to maintain tight control of every area of your business while you are re-engineering. For example, establish a system for tracking and forecasting cash. This metric is more important than your profit and loss statement. Many companies can operate at a loss for years if they’re able to manage their cash position. Know your projected flow at least 3 months from now. If you have a solid grasp on your income and expenses, you have a much higher chance of survival!
Federal Reserve chairman Ben Bernanke warned this week that the slump in the US housing market will prove to be a “significant drag” on economic growth. If that news isn’t bad enough for you he followed-up with his brilliant observation that that economic confidence is still fragile. Of course it is Ben and we’re all counting on YOU to give us some confidence. Cutting interest rates is a symptomatic cure. It’s hard enough for small business operators to succeed in a highly competitive arena. Confidence is our most valuable asset. Isn’t it about time that our economic leaders gave us some tools for growth rather than predictions of gloom and doom. Quit being such a DRAG Ben.