A Rising Tide Lifts All Boats- Stay Afloat In A Changing Economy

Today’s political climate has produced some interesting discussion topics and even more interesting candidates.  Regardless of the result, this month’s election will definitely be historic.  Many economists are predicting that either presidential candidate will likely bring more strain on one or more segments of the population.  Business owners around the country are speculating not on whether this election will affect their business, but HOW.  Wise business owners don’t spend much of their time anticipating whether the economy will rise or fall with each new election, though.

The truth is that the economy can be counted on to always rise and fall.  That is the nature of our system in the United States, and the global economy isn’t significantly different.  Political unrest, environmental challenges, and natural disasters are examples of events that may tip the scales in any economy, and then cause ripple effects in the United States.  If you are a business owner who plans on being in business for more than a few years, how can you protect yourself from these fluctuations? Better yet, how can you ensure that your business rises as much as possible with the high tides, but does not sink or run aground with the low tides?

  1. Educate Yourself.  If you plan to be successful in business, educate yourself.  This doesn’t mean that you should sign up for MBA courses that you have been putting off.  It does mean that you should learn more about your customers — who they are and what they need.  If you provide your customers better service than your competitors do, you will have a constant stream of business, regardless of the type of economy our country is experiencing.  In addition, learn about the direction and future of your industry, so that you can anticipate potential challenges that may arise, and stay two steps in front of them.  Remember that it is often difficult for a business to make major changes rapidly.  Therefore, it is vital to anticipate changes so that you will be able to plan and prepare for them over a longer period of time.
  2. Take Advantage of the High Tides and Prepare for the Low.  A successful farmer once told me that he was able to survive as a farmer for as long as he did (50+ years) because he used his profits from the good years to prepare for the bad. People tend to assume that if you have one bad year, then a good year will follow, but this is often not the case.  Be prepared to go through years of financial hardship by pooling resources, being conservative with debt, and keeping overhead costs low.  Possessing reserves for both your personal and business requirements will allow you to weather any storm that comes your way.
  3. Know your Mission. Beyond making a sizeable profit, what is the goal of your company?  Do you want to grow it and sell it?  Do you plan to pass it down to your children?  Do you want to use your business to make a difference in the community through philanthropic efforts?  It is important to know WHY you are doing what you are doing because when times get tough, you will question your own motives.  It could be tempting to give up and take a nine-to- five job that has minimal risk, but very little reward other than a routine.  Having a goal and a mission will help you stay focused when times get tough.
  4. Consult the Right Professionals. You have heard the saying, “Plan your work and work your plan,” but it only makes sense to do so if your plan makes sense.  Having the right professionals on your team giving you objective, expert advice can make all the difference, especially in a turbulent economic environment.  There are very few storms that your business can’t weather if your professionals will work together and collaborate as a team for you.

If you own a business, or are considering starting one, be sure to plan for times of economic feast and famine.   The adage says, “A rising tide lifts all boats,” and, to a certain extent, this is true.  A decade ago, many businesses were booming, and anyone who wanted to start a small business could succeed.  In today’s economy, though, it takes much more than luck and good timing to succeed at business.  Follow these steps to ensure that you will rise with the next tide, and the next, and the next.

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Written by blountlaw