The Economic Winds of Change
April 22, 2019
If the financial news pundits are accurate, there could be some economic growth headwinds facing our country within the next year or two. Doesn’t sound like we’ll have another recession similar to the last one but a slowdown into “sluggish” territory is entirely possible.
In fact, in his annual letter to investors in April 2019, JPMorgan Chase CEO Jamie Dimon said, “there are economic risks on the horizon that will demand our attention.” That’s a fairly broad statement but one that should not be taken lightly.Connecticut still has not fully recovered from the Great Recession of 2008 in terms of jobs and prosperity, making it even more imperative to take steps to prevent any further erosion to our economic progress. Click To Tweet
Protecting and sustaining the value of your business during a period of decline is possible if the right measures are put in place. It’s a good time to ensure everything is in alignment and that you’ll be able to weather whatever business challenges come your way.
In the event of an economic slowdown, small to medium-sized manufacturers may want to consider some of these steps:
1) Become more cognizant of anything that has been recession prone in the past and possibly scale back from them. Explore specialized markets and supply chains with needs that align better with your capabilities.
2) Assess your relationship with critical suppliers and key customers. Having an ongoing dialogue and effective collaboration with them will yield mutual benefits in addressing less than desirable business conditions.
3) Build up your reserves to be better prepared for any cash flow issues. Keep the communication lines open with your bank who can advise on economic forecasts and market trends. And evaluate your capital investments to ensure you are properly positioned and protected.
4) Develop your workforce plan, being as transparent as possible with your employees, about the health of your business, preparations to handle any anticipated downturns, and actions to initiate in response.
5) Review your three-to-five year business plan by making updates where needed and ensuring it still reflects your perception of the future state of your business. This includes financials, sales and marketing, operations, assumptions and projections.
Taking an objective assessment of your business and its inherent value may also be a smart idea right about now.
Economic slowdowns can present opportunities such as stepping back and conducting an honest reexamination of your business, your facility and equipment, your competitors, your customers, and your workforce.
Preparation is the key to weather any stormy headwinds and keep your business going in the right direction.
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