Recent turbulence in the financial markets has raised fears that the end might be near for the long bull market and these high confidence economic conditions.
These fears are warranted, and a reversion to a more recessionary reality becomes more probable by the day.
First, the stock market has tripled in the past ten years and is up more than 50% in the past two, so it is unrealistic to expect outsized performance like this to go on forever.
Then there is monetary policy.
It has been 10 years since the Fed’s quantitative easing response to the 2008 financial crisis.
This unprecedented expansion of the monetary supply and maintaining of “near zero” interest rates also has to be balanced back out at some point.
And with the Fed having raised interest rates three times already this year, this looks like that point.
And these now higher borrowing costs are very likely to “pump the brakes” on consumers’ and businesses’ willingness and ability to invest and spend.
Oh yes, throw in the potential of even more Washington dysfunction with the coming midterm elections and…
…we very well could be facing a perfect storm of “snapback” conditions, the risk of which we ignore at our own peril.
So here are three great strategic business responses when tough times might be coming:
#3. Get After It. NOW. Especially as to plans to raise outside growth capital, or to test the business sale market, because investor risk tolerances and valuations may never again reach today’s historically high levels.
#2. Reduce Fixed Costs. Business history is littered with companies taking on large fixed expenses in good times, and then when sales slowed and financing options dried up, they found themselves in tight and suffocating cash squeezes.
Don’t let this happen to your business.
Especially given this freelance and sharing economy of ours – where it is possible to “rent” virtually any product, service, or location a business may need – there is no excuse to get caught in entangling and strangling financial commitments.
#1. Market and Sell. MORE than we ever have in our lives!
This is of course excellent advice in any market, but as storm clouds gather and the economic emotional spectrum swings from greed to fear, our natural human reaction is to be more cautious and conservative.
To heck with that!
When in the air there is nervousness and fear, let us call on that old Latin adage Audaces fortuna iuvat – Fortune favors the bold – and have us be the ones that stand up and shout that our products and services are the best there are.
And that all should count themselves lucky to have the opportunity to buy and benefit from them.
Because when times look like they might be turning tough, the tough…
…market and sell with full enthusiasm, wisely manage their overhead, and yes…
…very much get going.
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