“I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.” - Jimmy Dean.
No one knows how the economy will change in the next 12 months.
Most are predicting a good 2020, but some are cautioning about recession. We know from past experience that the experts don’t know any more than we do. Recall the dire predictions of a recession at the end of 2018 that drove the stock market down in December 2018. And it turned out that 2019 was a boom year.
Because economic conditions always change, it’s essential for small business owners to be prepared for whatever comes their way.
In the following months, I’ll do a blog each month on how to prepare for changing economic conditions by focusing on particular areas…your employees, your equipment, your debt, your customers, etc. This first blog in this series is an overview on preparing for change.
Sources of change
Change that you may need to adapt to can come from many sources. There’s no single factor dictating economic change. Be aware that things can go along fine and then…boom…something happens to drastically impact business. You need to keep up on these factors in order to react appropriately.
Events. World events or local happenings can affect the economy, and as a result, your business. Some events are political, such as a change in leadership in a foreign country and the presidential campaign here that will wage throughout most of 2020. Some changes are the result of economic conditions abroad, because the U.S. economy is interdependent.
Legislation. New laws and regulations on the federal, state, and local levels have an impact on your business. Some may be dramatic. For example, if you are mandated to offer a certain benefit, it could cost your business a lot and require you to adapt.
Technology. Certain developments revolutionize how we do business, or whether we’ll stay in business. Can you even recall how we operated before the iPhone? Remember one-hour photo labs? What will AI mean in the near future? Here are some technology trends to watch.
Social mores. Remember when smoking cigarettes was common? Then health issues changed the public’s perception of smoking, which led to smoking bans in restaurants and places of employment. What changes in social mores are currently afoot that may impact your business soon?
Resources for staying alert
The only way to adapt to change is to know what’s happening. Consider these methods for staying up on things.
Look for technical indicators for signs of a changing economy. Consider these:
Listen for practical indicators. Consider these:
- Trade associations and chambers of commerce. Membership in these organizations should give you information relevant to your industry and your community.
- What’s being said by:
- Your customers
- Your vendors
- Your competitors
Read about changes. Consider these:
- Government newsletters, which you can subscribe to for free
- Idea of the Day® and Big Ideas for Small Business® are free resources. Sign up here.
Next month’s blog on preparing for economic changes will focus on creating a strategic plan for your business.