Since the beginning of the last recession I’ve become more obsessed with reading economic data and business trend information—not only as it pertains to our local market, but also nationally & globally. I realized all the signs were there prior to the last recession, but like many business owners, I didn’t pay close enough attention to the trends and data that indicated the beginning of a major economic downturn.
Last week, on the same day, I saw two stories depicting much different economic futures for our economy. How do you determine what to believe?
First, I saw this article on USAToday.com: “3 doomsaying experts who foresee economic devastation ahead” (by Adam Shell). Then, later I received an email newsletter from the Kauffman Foundation’s Entrepreneurship.org that had a link to an article entitled “Entrepreneurs Optimistic About 2012” (by Mark Marich).
The USA Today article highlighted three economists (Harry Dent, Gerald Celente, and Robert Prechter) who believe—based on the aging baby boomers, global debt bubble, potential deflation, and lack of true financial reform—that we’re going to see another deep recession worse than 2008 as early as 2013 or 2014. This would follow a similar pattern to the Great Depression in the 1930’s.
The Kauffman Foundation’s article reflected a study where entrepreneurs were asked to consider the economy at large, and over 68% said they expected the economy to improve or stay the same. In addition, 75% of those surveyed believed that consumer demand either will stay the same or increase—a viewpoint that likely indicates they have positive feelings about the state of the economy currently.
I’ve been hearing a lot of positive buzz from upbeat business owners saying their phones are beginning to ring again and sales are increasing. I have numerous clients sensing upward motion in their industries as a whole and in their marketplaces. Consumer confidence even rose to its highest level in years last week, and the Dow Jones Industrial Average grew over 13,000. As I looked further at various news sources and studies, it appears the economy could go either way.
With so much contradicting information, who and what do you believe?
First, trust your judgment and trust your gut. If you tend to be overly optimistic or pessimistic, maybe you need to shift to the middle. Entrepreneurs I know are typically the ‘hopeful’ bunch, who believe things are going to get better. As I’ve mentioned before in my columns, entrepreneurs need to be optimistically-pessimistic. I encourage you to continue focusing on your growth plans, but at the same time make sure you’re paying attention to trends in your business more closely, as well as local and national marketplaces. Make strategic decisions and take risks, but make sure you’re taking planned and methodical risks.
We’ve never experienced an economy like this before, and therefore, all the forecasts and predications are just that. I do know we’re not out of the woods yet, and consumer, business, and government debt are still concerns in creating long term sustainable, economic growth. I’m not suggesting that you stop your growth plans or hiring strategies, but make sure that you’re not wishing yourself into a better economy or business position than actually exists. Pay attention and be aware. This proactive approach can be the difference between experiencing a challenging economy in a thrive mode or a survive mode.
I encourage you to make sure you’re not the small business owner with your head buried in the sand or up too high in the clouds. Keep a keen outlook on your key business indicators and the local, national, and global marketplace. We all learned from the last recession that we should not ignore any of the tell-tale signs or external forces that will and can impact our businesses.
This is another article in a series on Michael’s entrepreneurial story and how being raised in a large family has influenced his career. To read the previous articles in this series, visit his blog at www.Collaboration-llc.com.
Michael Gunther is Founder and President of Collaboration LLC, a team of highly skilled business professionals who are dedicated to assisting proactive business owners to build profitable, sustainable businesses through results-oriented education and consulting services. Learn more at www.Collaboration-llc.com.