There is so much power in “knowing.” I heard the recent news about the 42-year high in price increases, but I’ve already felt that pain from the gas pump and the grocery store. I also know that the current unemployment rate is 3.6% for the fourth month in a row. As a small business owner, I pay attention to the statistics put out by the federal government, but they only help me if I can put them into some relevant context. There is still high speculation that the U.S. will have some degree of recession. I can’t control that but I sure don’t want to be surprised by one. Do not stick your head in the sand on this. Learn about this segment of a business cycle. Let your “knowing” help you power through it if a recession comes.
In The Last 65 Years, The Average Length Of A Recession Has Been 11 Months
In the years before 1945, the average length of a recession was just less than 2 years. This is similar to knowing how long to wear a cast before a broken bone has healed. There will be some pain, but there are also instructions on how to help heal. If my particular type of business won’t survive several months of recession, then I have some time to prepare for my next endeavor. I’m not trying to be Pollyanna here, but I’d rather keep moving in any situation than to stop moving at all. This is my motivation for reading about economic conditions. I want as many tools as I can gather when it comes to business obstacles.
You Can Keep An Eye On These Indicators
The Stock Market is not the economy but . . . if there are sudden or continuous declines in the markets, there could be trouble ahead. Stock traders can choose to sell off assets if they become leery about economic conditions.
Steep job losses for a few months can be an indicator of a coming recession. Rising unemployment is a bad sign for the economy.
A drop in consumer confidence reflects a reluctance to spend money. Consumer spending is what drives our economy. Lower spending will always slow it down.
A decline in the Leading Economic Index (LEI) can be predictive. This report comes out monthly (published by the Conference Board) and is based on new manufacturing orders, applications for unemployment insurance, and the performance of the stock market.
A yield curve inversion in U.S. government bonds is also something to watch for. If long-term bond yields become lower than short-term bond yields, it can show a lack of investor confidence in the economy. This occurrence has predicted recessions in the past.
There Is So Much Power In Knowing
I have learned that you cannot enjoy being a business owner if you don’t also like constantly putting out fires. We continue to have quite the smorgasbord of potential catastrophes to anticipate. But when you know—you know. If you fear something, learn about it. Let’s accept the possibility of a recession, even as we hope it will be averted. Talk to your peers. Listen to stories of previous economic slowdowns. Heck, just remember the surprising twists and turns of the last two years. Remember you are a player, a participant, and not just someone watching from the grandstands. Check your company defenses and start a Plan B. We still have most of the 3rd quarter and all of the 4th quarter to make this year a good one.
The Quality Of Your Technology Is A Cornerstone Of Your Success
What are the cornerstones of your continued success? I see them as your workforce, your business strategy, your supply chain oversight, and your technology. At Aptica, we approach our assessment of your technology needs as they relate to your biggest picture. It won’t cost you a penny to give us a call and ask questions, or to request that we come and assess what technology you know have. Let this exercise be a part of your preparation for what may come down the pike economically. Spend your time being proactive. It starts with a conversation. 260.243.5100.Jason Newburg, 260.243.5100, ext 2101, is the founder and owner of Aptica LLC. This IT management and support company has been serving small to medium-sized businesses for 20+ years in the region that includes Angola, South Bend, and Fort Wayne, IN, Battle Creek, MI, and Toledo OH.