As business owners, we tend to isolate ourselves solely within our business environment, but it’s important also to take a look at the economic situation of our customers. What are your customers likely to do in the next 12, 24 or 60 months? How can you shape your company to provide what they “need and want”?
The “need” is easy; stuff breaks. The “want” is a bit more difficult.
The good news from Beaulieu is there is nothing on the horizon to match what happened in 2008-2009. If you are more than 40 years old, you won’t see this kind of economic downturn repeated.
Here are 11 key points from Beaulieu’s speech and some of my thoughts on how they will impact you.
1. Liquidity is not an issue. People do have money to spend.
2. When it comes to spending, it’s not a lack of money. It’s a lack of conviction. Here is where finding the “want” will be your source of additional revenue. If you find what your customers want and you have a compelling proposal, their lack of conviction will disappear.
3. Employment rates are rising. And it’s a fact that when they do, Americans spend money.
4. Banks are lending. Retail sales are rising, therefore the economy will prosper.
5. Construction is improving. The contractors who jumped into your business sector will be leaving to go back to what they love — their business sector. This is good news for you!
6. Private sector employment is up. Unemployment focuses on the rearview mirror, while employment focuses on the future. Staff to meet customer demand and focus positively on the future. Many Nexstar member contractors made a profit in the recession because they refused to lead with fear.
7. Job opportunities are not lacking. But there is a lack of interest in the work force. So ask yourself, “Do I want this job?” I coach members all the time and ask them to answer this question, “Would you work for you?” If the answer is no, then there is your problem. Fix it.
8. There will be some inflation, and it’s a way to get out of this mess. I agree with Beaulieu’s recommendation to protect your profit margins moving forward by making sure you implement a modest price increase on a regular basis.
9. Inflation will be noticeable in the food and energy sectors.I’m going long on diet companies, but seriously, the inflation in energy will raise prices not only on gas and electricity, but on everything you purchase. It takes energy to make everything. Get ready for all your costs to rise. The big items to watch are your expenses, vehicles, material and equipment.
10. Inflation will not impact interest rates.The Federal Reserve can’t control the food and energy sectors. This looks like a great time to buy some income-producing real estate. Take advantage of the low rates this year.
11. The housing market will level off in 2014, and then begin to increase throughout 2015-17. If you are in new construction, hit it hard in 2013 because this is when you will see plenty of opportunity. Just understand that you will get a pause in 2014, so don’t go all in for the long term. Be ready to tighten the belt down the road. Said differently: Lease a backhoe next year and buy a backhoe in 2015. You won’t want the carrying cost in 2014.
Do you have a plan?
Beaulieu noted that we live in a microeconomic world, so base your economic decisions on these criteria:
• Do you still have the passion to be in this business?
• Do you still have the imagination to dream the dream?
• Do you still have the physical energy to make it happen?
• If you still have the entrepreneurial dream and energy, you can make it happen. This decision is not up to the government, but it’s up to you and me.
What’s your 2013 going to look like? Do you have a plan? How will you go from here to there in the next 12 months? Are you going to let life happen to you or are you going to sculpt your business world into what you dream of creating? Make no mistake, you will get what you deserve and I believe you deserve great things, but only if you plan for them to happen for you.
If you haven’t started your positive move forward, begin today with these simple, yet very helpful questions:
• Do you need to increase your call counts? If so, what are you going to do to make this happen?
• Do you know how many calls end in a sale? Could your sales calls be improved and, if so, how?
• Is your average sale on target? What is your target? What are you going to do to enhance your target?
• Are your overhead costs (mainly salaries, advertising and vehicle main-tenance) in line with your goals? What about direct costs related to labor and materials?
• Is your staff trained? If not, are they trainable? What is your recruiting and hiring process?
Who’s helping you as the owner? I know from being behind the wheel that sometimes business owners need someone to help them steer and stay on track, while questioning their decisions. So if you don’t have a business coach or other support system in place, I recommend you make that happen, for yourself and your company.
Several Nexstar member companies have formed their own “personal board of directors,” comprised of other successful business owners who share insight and best practices. Most importantly, they hold each other accountable and by doing so, all make great strides in reaching their goals.
So who’s in control of your business in 2013? A leading economist and I are here to tell you that you are! So make the decision to take the leadership seat at the helm of your business and model and inspire your employees to embrace a bright business future.