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Sunday, May 28, 2023

As Economy Slows, Celebrate Victories, Work Together

In with the new, out with the old is a popular phrase at the beginning of a new year.

In business, we can modify it to sound something like this: “The most successful businessman is the man who holds onto the old just as long as it is good and grabs the new just as soon as it is better.” We all need to follow that axiom now that we’ve entered 2009.

The reduction of FEAR (False Evidence Appearing Real) we all are laboring under starts with each of us sitting down and laying out a plan to move forward this year. In order to do that, we need information that relates to the other side of the story.

I read an Op-Ed piece in a daily newspaper written by Brian Hamilton, CEO of Sageworks, a financial analysis and software firm. The mission statement of the firm is to put complicated financial data into easy to understand terms.

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No Need To Panic

The following are a couple of his examples:

– & #8201;How about employment? According to the Bureau of Labor Statistics, the November unemployment was at 6.7 percent (latest data available). This time last year, it was 4.7 percent. The 50-year historical rate is 5.97 percent. Most economists agree that the natural rate is around 4 percent. Then today, we sit at 2.7 percent above that rate. You judge for yourself if that is as devastating as the media like to boast. No percent of unemployment is acceptable if you are part of the number, but the devastation is not apparent. It all boils down to 93 percent to 94 percent of us are still working.

– & #8201;Personal income is another barometer of good versus bad economies. It is a measure of a person’s income from all sources. Personal income rose last quarter compared with a year ago, according to the Bureau of Economic Analysis. Compared with five years ago, personal income has risen 32.1 percent. Considering that inflation was 18.13 percent during that period, most of us are making more money than we used to.

– & #8201;His closing comment is significant: “There is no doubt that the economy has slowed, but slowness does not equal death. It is true that the financial markets are a mess (and the depreciation of the value of equities is both scary and bad), but analysts typically go too far in ascribing the fall of the financial markets with the fall of the whole economy. The markets are an important component of the economy, but the markets are not the totality of the economy.”

The idea here is to select a course of action and set up a plan to accomplish or reach your goals. In order to keep an upbeat attitude and have a chance of accomplishing your plan, we all need to celebrate our victories no matter how large or small.

Celebration is a way of collaborating your idea. If something fails, then just let it go and move on to the next item in the plan.

I read dozens of other chamber of commerce newsletters and publications to try to find ways to help businesses grow. Publications where the “R” word stands for resilient, not just recession.

Communication The Key

The consensus is fairly simple:

– & #8201;Work with your customers. In a down economy, communicate more often with them. They are hurting, too, so understanding that both of you are in the same boat helps the two of you work together.

– & #8201;Communicate with your employees. Being flexible with customers is obvious, but that same flexibility applies to your employees. Keep a dialogue with your team members and keep them up to date on the conditions within your firm. Let them know how they can help and help them see the total picture.

– & #8201;Manage your finances. Cash is king. When times get tough, make sure you explore all of the ways to keep cash on hand. For instance, instead of paying down all your debt, look at making interest payments only when necessary. Communicate with your creditors; let them know your condition and work out agreeable terms.

The economy is not going to be sour forever. When all these stimulus packages finally get started, we will see drastic changes in our business cycles. Reduction in FEAR allows us to step up our plan and take it to another notch.

According to a recent report from the national Conference of Mayors, the green movement will be a huge player in job creation in 2009. The report states that the green economy could create 4.2 million jobs in the next three decades. Two-thirds of them will come from switching to renewable power and alternative fuels.

Sustainability will be the buzzword of the new administration, and perhaps, the new economy created after the crisis dies down.

Ted Owen is president and CEO of the Carlsbad Chamber of Commerce.


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