A recession is the great business equalizer. Those businesses which aren't competitive will be thinned from the herd. The good news: yes, dirt will still accumulate and there will still be people who refuse to live with dirty carpet.
These people we call customers are just like you and I. They are wondering about their job, pensions and 401K's. Their dollar doesn't go as far as it used to either. Their household incomes are generally down. They are looking for value now more than ever.
The companies that give them this value at a price that they perceive as "in the budget" will survive and ultimately thrive because the herd will be thinned when things turn around.
In business, esp. in times like this, there can be no sacred cows. Nothing we purchase or sell, none of our systems or processes, and none of our people are above a healthy and serious review. Our pricing strategies must be challenged and tested as well.
Our value has to grow while our costs, esp. fixed, must be scrutinized. Our insurance polices and rents need to be reviewed and possibly renegotiated. Our loans should be looked at closely and possibly consolidated and locked in now while money is cheap. Short term expansion should be double-checked to ensure growth will still be possible in 6-12 months if the economic troubles deepen.
This must be done or the company is likely going to pay a hefty price.
You might ask how I know this.
I don't mean to come off as a scare monger, just a guy with an optimistic outlook whose local economy has been in a recession for 6 years. Michigan has been in the top 5 states of highest unemployment nationwide for years now. Our state population has dwindled as manufacturing jobs have dried up. With a governor who doesn't know business if it hit her in the head, the MI budget has swollen while the state coffers have diminished. Of course instead of cutting taxes to encourage business, they punish us by increasing them.
Our state went from some of the highest land values in the Midwest during the 90s to some of the lowest in the US in under a decade.
To put things into perspective Realcomp, a Michigan property valuation company, recently released December 2008's avg home costs around the state.
Detroit's average home cost as of Dec 2008 was....are you ready....
Seven Thousand Five Hundred Dollars
I had to type it out in words because looking at the number $7,500 is just unfathomable to me.
My own property lost $33,000 in value last year alone, following a $22,000 decrease in value in 2007. $55,000 in lost value in 2 years is a lot for a property that was valued at $350k in 2006. If I lived in the city my property value would have decreased even more.
That's how I know - and how we in MI know. The problem is very real and it's spreading.
But that doesn't mean there isn't hope. It just means that we can and should only focus on the things we can change.
President Obama talks about "change", but talk is cheap. You and I - we business owners - we'll be the ones who will enact this "change", not just talk about it. We must in order to survive and thrive.
In January, John Braun interviewed me regarding "surviving and ultimately thriving in a down economy". I've published it in my blog and created a huge mind map of action to take. It is free, although if I were to place a value on it it should go for at least $50-$75. There is some excellent and timely info in it, if I do say so myself.
It's extremely important that you read this, think about this, and ultimately take action. This is not the time to sit by the phone and wait for things to happen. Now is the time to do, not pontificate.
In order to avoid shameless self-promotion, please check my profile if you'd like to get the mindmap and audio teleseminar. It is not for sale although you may have it for free. The only thing I ask in return is a valid and respectful comment on my blog, please - even if you disagree.
Thanks
These people we call customers are just like you and I. They are wondering about their job, pensions and 401K's. Their dollar doesn't go as far as it used to either. Their household incomes are generally down. They are looking for value now more than ever.
The companies that give them this value at a price that they perceive as "in the budget" will survive and ultimately thrive because the herd will be thinned when things turn around.
In business, esp. in times like this, there can be no sacred cows. Nothing we purchase or sell, none of our systems or processes, and none of our people are above a healthy and serious review. Our pricing strategies must be challenged and tested as well.
Our value has to grow while our costs, esp. fixed, must be scrutinized. Our insurance polices and rents need to be reviewed and possibly renegotiated. Our loans should be looked at closely and possibly consolidated and locked in now while money is cheap. Short term expansion should be double-checked to ensure growth will still be possible in 6-12 months if the economic troubles deepen.
This must be done or the company is likely going to pay a hefty price.
You might ask how I know this.
I don't mean to come off as a scare monger, just a guy with an optimistic outlook whose local economy has been in a recession for 6 years. Michigan has been in the top 5 states of highest unemployment nationwide for years now. Our state population has dwindled as manufacturing jobs have dried up. With a governor who doesn't know business if it hit her in the head, the MI budget has swollen while the state coffers have diminished. Of course instead of cutting taxes to encourage business, they punish us by increasing them.
Our state went from some of the highest land values in the Midwest during the 90s to some of the lowest in the US in under a decade.
To put things into perspective Realcomp, a Michigan property valuation company, recently released December 2008's avg home costs around the state.
Detroit's average home cost as of Dec 2008 was....are you ready....
Seven Thousand Five Hundred Dollars
I had to type it out in words because looking at the number $7,500 is just unfathomable to me.
My own property lost $33,000 in value last year alone, following a $22,000 decrease in value in 2007. $55,000 in lost value in 2 years is a lot for a property that was valued at $350k in 2006. If I lived in the city my property value would have decreased even more.
That's how I know - and how we in MI know. The problem is very real and it's spreading.
But that doesn't mean there isn't hope. It just means that we can and should only focus on the things we can change.
President Obama talks about "change", but talk is cheap. You and I - we business owners - we'll be the ones who will enact this "change", not just talk about it. We must in order to survive and thrive.
In January, John Braun interviewed me regarding "surviving and ultimately thriving in a down economy". I've published it in my blog and created a huge mind map of action to take. It is free, although if I were to place a value on it it should go for at least $50-$75. There is some excellent and timely info in it, if I do say so myself.
It's extremely important that you read this, think about this, and ultimately take action. This is not the time to sit by the phone and wait for things to happen. Now is the time to do, not pontificate.
In order to avoid shameless self-promotion, please check my profile if you'd like to get the mindmap and audio teleseminar. It is not for sale although you may have it for free. The only thing I ask in return is a valid and respectful comment on my blog, please - even if you disagree.
Thanks
